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Provision that allows an insured or insurer to cancel a Property and Casualty or Health insurance policy at any time before its expiration date. Some policies require advance notification (such as 30 days). If the insured cancels the policy, a written notice must be sent to the insurance company, which will then return any unearned premium to the insured. If the insurer cancels the policy, it will send written notice and return any unearned premium to the insured.
Insurance Industry News from ProgramBusiness.comPossible AIG Settlement
According to a report by Reuters, New York authorities will likely push to settle with American International Group Inc. out of court after charging the insurer with dressing up its books to dupe regulators and investors, experts said. In dozens of investigations to clean up Wall Street, mutual funds and the insurance industry, New York Attorney General Eliot Spitzer has taken only a handful of cases to court with the rest ending in settlements worth several billion dollars.
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Legal experts said they assumed a settlement would amount to several hundred million dollars -- and a quick deal would be in the benefit of AIG, the world's largest insurer by market value. "Having this litigation hanging over the head of AIG doesn't do anything good for them," said securities lawyer Andrew Stoltmann of Chicago. Representatives of AIG and Spitzer's office declined to comment on any negotiations between the two.
New York authorities on Thursday filed a civil lawsuit against AIG, former chief executive Maurice "Hank" Greenberg, and its former chief financial officer, saying they committed fraud and cooked the books to deceive investors. Greenberg and former CFO Howard Smith were both ousted after an investigation into AIG's accounting errors picked up steam in February, with the insurer acknowledging error.
Spitzer, in the first legal action by regulators since the probe began, accused the two AIG executives of taking part in numerous fraudulent business deals that exaggerated the strength of the AIG's core underwriting business and propped up its stock price. Investigations are continuing and criminal charges could still be laid against individuals within the company.
SHARE PRICE SLID
Analysts said the quicker AIG can put its legal woes behind it, the sooner investors can feel comfortable with the company and potentially drive its share price back to levels seen before the string of accounting problems at the company hit. AIG's share price has fallen about 23 percent since the investigation began, closing at $56.40 on Friday from a $73.12 on the last trading day before the company announced Spitzer's investigation.
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