HONG KONG – While trying to resolve regulatory issues with Hong Kong and Chinese authorities, American International Group has withdrawn an application to sell group insurance in mainland China, Reuters reported Wednesday.
AIG has operated in China with little interference since 1992, but told Reuters they decided to pull the application particularly because of an issue surrounding unauthorized sales by its Hong Kong-based agents.
The pull-out ironically comes at a time when China has lifted restrictions on foreign entities selling group insurance as a part of its WTO obligations.
“Among the regulatory issues to be addressed is the response to AIG’s acknowledgement that certain of its Hong-Kong based agents sold life insurance to customers on the Chinese mainland in contravention of applicable regulations,” the company said in a filing with the U.S. Securities and Exchange Commission and Reuters reported.
U.S. regulators are in the middle of a lawsuit against AIG for accounting fraud. New York authorities are claiming AIG officials overstated their earnings and the strength of their underwriting business.
At the SEC filing, Reuters reported that AIG admitted to overstating its net income for the past five years by $3.9 billion.