As a part of AIG’s overall strategic review of its business portfolio announced on January 26, 2016, we are more strongly focusing our resources on offerings where we hold market-leading positions to consistently generate strong returns over the long term. In line with this direction, we have made the strategic decision to reshape our portfolio of businesses in Group Benefits.
What is Changing
• In reshaping our portfolio, we plan to exit the U.S. Core Employer business segment and the Voluntary Benefits business segment within Group Benefits, for all products underwritten by American General Life Insurance Company (AGL) and The United States Life Insurance Company in the City of New York (USL). Please see a detailed list of affected products below.
What is Not Changing
• Today’s announcement does not impact products marketed to employers and groups underwritten by National Union Fire Company of Pittsburgh, Pa. (NUFIC), including AD&D, Business Travel Accident, and participant accident products. These products are part of our U.S. Personal Accident business, which aligns closely with AIG’s expertise and strong relationships in the Personal Insurance market.
• We also plan to continue investing in the Stop Loss/Organ Transplant business segment, where we provide market-leading products underwritten by NUFIC and unique value to our customers and distribution partners.
While our decision to exit the Employer and Voluntary Group Benefits businesses is challenging, it allows us to align more closely with AIG’s organizational goals and vision. During this process, we will uphold our commitments to customers and policy holders, and ensure a smooth transition of the business.
Affected Products
AIG will revise its marketing and sales activities for the following insurance products underwritten by American General Life Insurance Company (AGL) and The United States Life Insurance Company in the City of New York (USL):
• Life/AD&D (Group Term)
• Disability (STD, LTD, Statutory, ASO, and FMLA)
• Group Worksite (Critical Illness, Hospital Accident, Hospital Indemnity)
• Individual Worksite (Universal Life, Term Life, Accident, Critical Illness)
Impact on New Business Quoting
• For the affected AGL/USL products noted above, effective October 6, 2016, we will cease quoting on new business.
• For Group Life and Disability only, we will honor open and active proposals that were issued prior to October 6, 2016
Impact on In-Force Business
• Life/AD&D (Group Term) and Disability (STD, LTD, Statutory, ASO, and FMLA): We have taken steps to minimize disruptions to in-force policyholders for these products who may be affected by AIG’s transition from this market. To this end, for Group Life and Disability, we have finalized renewal rights agreements with two non-AIG carriers to provide a solution to help transition our in-force business.
In order to align our in-force policyholders’ needs with the unique resources and capabilities of these carriers, our agreements will generally correspond to group size.
o Life and Disability groups with fewer than 500 employees will be offered a transition to an AXA insurance carrier based on their specialization in this market.
o Life and Disability groups with 500 or more employees will be offered a transition to a Symetra insurance carrier based on their focus and unique value proposition in this market. Please note that all policyholders with FMLA services, regardless of size, will be offered a transition to Symetra
• Group Worksite (Critical Illness, Hospital Accident, Hospital Indemnity): Policies for these products will not be transitioned, and the policies will terminate in 2017. More details regarding specific case terminations will be provided soon.
• Individual Worksite (Platinum Universal Life, MVP Term Life, Accident, Critical Illness): We will allow new enrollments for applications that are submitted by December 31, 2016. After this date, no new enrollments will be allowed. In-force policies for these products will be honored and remain in force.