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COBRA Premium Subsidy:

The American Recovery And Reinvestment Act of 2009

As you are probably aware, the federal economic stimulus bill which was signed into law on February 17, 2009, includes provisions for a temporary subsidy of COBRA premiums for involuntarily terminated employees. We are providing a high level summary of the new provisions below.

Massachusetts has taken the lead in requiring businesses to develop and implement a comprehensive security program intended to protect from unauthorized disclosure the person information of the state’s residents.

AIG Private Client Group has received inquiries from concerned clients and brokers regarding insurance coverage for financial loss related to the alleged Ponzi scheme perpetrated by Bernard L. Madoff and Madoff Securities Investments. As each situation is unique, inquiries are being handled on a case-by-case basis by a dedicated claims representative.

Since the first reports surfaced concerning the alleged Madoff Ponzi scheme, we have
received a number of inquiries regarding the extent of coverage under the Masterpiece policy for Madoff related investment losses, as well as claims from our insureds.

First, I want to take this opportunity to wish you and your families a happy and safe holiday season. All of us at AIG Commercial Insurance are very grateful for your support and for your willingness to move past the headlines to get a better understanding of the state of our business.

AIG’s insurance companies are financially sound, with substantially more in assets
than they need to pay all valid present and projected claims, Insurance
Superintendent Eric Dinallo today reassured New York policyholders. Dinallo also
announced he would issue notices to insurance companies, agents and brokers,
reminding them of their responsibilities under New York Insurance Law to fully
inform consumers of the possible costs of switching life insurance, annuity and
other policies.

The Connector Board ratified policies to ensure
that health plans in Massachusetts meet specifics standards of health
benefits. The purpose of this memorandum is to summarize the
highlights of their decisions and to help you better understand these
decisions. These provisions take effect on January 1, 2009 except
where noted.

Thank you for your continued business and your ongoing support of AIG Private Client Group. To aid you in discussions with your customers, we have compiled the following important facts: