Article in The Star on AIA Quite Damaging

I find this article in The Star by Danny Yap on AIA quite damaging.

With due respect, the author may not understand well how insurance funds work. While a layman may have fear that the recent AIG's events may affect the security of their insurance policies, it is the responsibility of those (including reporters covering financial stories) who understand how insurance funds work to highlight the concept of separation of life funds and shareholders' fund.

For those who are not in insurance industry reading this post, briefly, insurance funds are created to hold policyholders' moneys and to meet liabilities to policyholders. Shareholders are not allowed to transfer money out of insurance funds unless there is a surplus in the fund and unless such transfer is recommended by the appointed actuary and approved by the Board. So even if shareholders run out of money, as long as insurance funds are solvent, policyholders should not be overly concerned that their policy liabilities will not be met. The rush to cash out their policies is therefore unneccessary.

A reporter would do a better job if he consults some experts in the industry before publishing an article purely highlighting one side of the story (in this case, highlighting the fear of those panic policyholders).