Chartis Promises More Accurate Reporting

In response to a state regulator’s discovery of "deficiencies" in its reporting, Chartis Inc., the property-and-casualty business unit of American International Group Inc., (AIG) said it has taken steps to improve disclosures about guarantees its subsidiaries provided to

The Pennsylvania Department of Insurance said in a report that its recent examination of a number of Chartis units found that two of them under-reported guarantees to AIG insurance company affiliates. According to the Wall Street Journal,  the report says Chartis reported a total of $18.7 billion, or 12% less than the correct amount, for the year 2008.

In their 2008 statutory filings to the state insurance regulator, National Union Fire Insurance Co. and American Home Assurance Co. reported a total of $138 billion worth of guarantees. The regulator reportedly later found the obligations should have totaled $157 billion.

According to the WSJ article, an AIG spokesman said on Wednesday that the company adopted a remediation plan “to ensure that our disclosures are more accurate going forward." Chartis was informed of the issue before its units submitted their 2009 statutory filings, and was able to fix disclosures about the guarantees in its most recent financials, submitted in March this year, notes the report.