Unpublished diplomatic cables that were acquired by WikiLeaks reported that during the collapse of the American International Group Inc back in 2008, propriety information about the company were released by the Chinese Insurance Regulatory Commission (CIRC) to its rival companies, as believed by some U.S. officials.
The reports say that CIRC intervened during the company’s collapse in September 2008 by forcing the local operations of AIG to open their books daily. CIRC then released the information that they obtained through this move to the competitors so that they will buy the assets of the crumbled company. This information was gathered through conversations between AIG executives and diplomats.
The efforts of CIRC though were not as successful as planned since several of the Asian operations were sold to Metlife and the IPO of AIA Group. These diplomatic cables now answer the questions regarding the way Chinese companies deal with foreign ones that are in distraught. According to the U.S. consulate during an October 22, 2008 cable, CIRC is not just acting as a regulator but it is also acting to provide support for local Chinese insurance providers.
CIRC claims that what it did was appropriate and that it had maintained a continuous communication with fellow regulators worldwide such as those in the U.S. All of these were done following the regulations that are set for them. Further, it claims that the problems stated in the reports did not happen between AIG and the regulator.
According to AIG executives who are based on Shanghai, they were called to Beijing after the rescue of AIG. Licenses were threatened to be revoked to regulators in Shanghai if they did not disclose the information needed by the regulator. Accordingly, CIRC held a meeting for local insurers to check if any of them wanted to buy AIG assets. China Life was a favored buyer but CIRC head said that he is not aware of such.
