HUNDREDS OF anxious policyholders thronged insurer AIA Singapore's Customer Service Centre in Finlayson Green on Tuesday. Many wanted to surrender their life insurance policies, on fears and uncertainty over the company's future financial stability.

AIA is a subsidiary of insurance giant AIG which is scrambling to prevent its own collapse. To make matters worse, AIG's credit rating was downgraded by Standard & Poor's Ratings Services on Monday, further rattling investors.

Over in Singapore, about 40 AIA customers were already waiting outside the centre when it opened its doors at 8.45am. By the late morning, there were hundreds of AIA customers who wanted to make enquiries and surrender their plans.

They were not daunted by the long wait of two to three hours, the time it took to be attended to by AIA staff after getting the queue number.

Among those in the long queue was AIA customer John Tan, 53, who wanted to surrender five AIA policies that he has owned for about 12 years.

'There is alot of uncertainty in the US market and financial institutions are collapsing one by one. If AIG files for bankruptcy and AIA goes go bust, our funds may be frozen or suspended and I may lose everthing,' he said. His annual premiums amounted to $50,000.

Another policyholder Irene Chua, 59, said that she was there to surrender her 14-year old investment linked insurance policy.

'AIA is owned by AIG and there is no assurance from anybody that we can get our money back,' she said.

Another policyholder who declined to be named said that instead of surrendering she has opted to request for the maximum loan amount from her four policies.

'By getting a loan based on the cash value of my policies, I will have some cash at hand and I do not lose my insurance cover,' she explained. She has worked out that the difference between her loan amount and the surrender value was about $6,000.

The situation at AIA prompted the Monetary Authority of Singapore to caution policyholders from acting rashly to terminate their AIA policies.

Doing so might result in the customers suffering losses from premature surrenders and losing the coverage they might need, it stated.

Just before noon, AIA opened up the ninth floor of AIA Tower at Robinson Road to cater to the growing number of customers.

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