MANILA, Philippines -- The sale of Philippine American Life and General Insurance Co. (Philamlife), which has received offers from 10 foreign and local investors, will not affect its ability to pay claims, Philamlife president Jose Cuisia has assured clients.

?We would like to assure our policy holders there is no reason for them to worry, to feel their investments are at risk,? Cuisia said. ?We have managed our investment portfolio prudently and conservatively.?

He said the "financial issues pertaining to our parent company AIG do not affect our ability to pay claims and underwrite new policies.?

AIG was among the big financial firms on Wall Street badly hit by the property downturn and the credit crunch in the United States and recently received an $85-billion rescue loan from the US government.

Before a press briefing, Cuisia met with employees and other stakeholders to assure that any change of ownership would neither disrupt the groups' operations nor compromise clients' investments.

Philamlife has about P143 billion worth of insurance contracts with more than one million policy holders in the Philippines.

Cuisia also sent letters to clients, agents, brokers, advisors and other partners to assure that AIG would scrutinize the groups offering to buy out Philamlife.

While it was previously ?unimaginable? that Philamlife could be owned by a local group, Cuisia said this auction could only be ?positive? for the Philippine market.

?This is an opportunity for local groups within the Philippines to win a trophy company like Philamlife which has been the industry leader in the past 60 years,? Cuisia said.

?AIG is seeking top-rated, financially strong brand names with the capability to continue Philamlife's legacy of leadership, strength, stability and dedication to its policyholders, employees, agents, partners, shareholders and other stakeholders,? Cuisia said in his letter, copies of which were distributed to media on Monday.

?Please be assured that we will continue to work with the regulatory authorities to ensure that the divested assets will remain financially sound,? Cuisia.

Finance Secretary Margarito Teves, who oversees the Insurance Commission, agreed that the sale of Philamlife would have a ?net positive impact? on the domestic insurance industry.

?We anticipate the sale to result in a stronger institution that would provide improved services and greater protection to the Filipino public,? Teves said.

Teves said Philamlife, as market leader, could very well pay claims and underwrite new policies given its capital strength -- in line with the reforms that the government had instituted in the local insurance industry.

?We will continue with these reforms, particularly the increase in capitalization, to help ensure that insurance companies are better prepared to tackle unexpected challenges like the ongoing US financial turmoil,? Teves said.

As required by Philippine regulators, Cuisia reaffirmed that bulk of Philamlife's investments were in marketable Philippine government securities, prime local corporate bonds and a small percentage in blue chips stocks listed on the Philippine Stock Exchange.

As such, he said insurance policies were ?safe and fully backed up by the financial strength of Philamlife.? He added that there had been no significant termination of insurance contracts even when news about AIG's woes a few weeks ago.

In a separate letter to investors, Philamlife's mutual funds subsidiary Philam Asset Management Inc. (PAMI), which managers P22 billion worth of funds, also assured the public of the company's strength and adequate capitalization.

?Each of the PAMI- managed mutual funds is an investment company registered with the Philippine Securities and Exchange Commission with separate and distinct Board of Directors.

All funds are public corporations with a broad base of shareholders. The funds are very stable and its investments are highly liquid, strictly complying with the objectives and restrictions stipulated in the respective fund prospectuses and acting in accordance with the Philippine Investment Company Act,? PAMI president Karen Liza Roa said.

Cuisia said he expected Philamlife to fetch a premium, or a price higher than book value. ?Normally, when you look at transactions around the region, there's always a premium especially for a company as valuable as Philamlife,? he said.

?I might say the interest expressed is not only from local groups but also international. However, I can't disclose the names because these groups have expressed interest in private and have required me to keep them in confidence,? Cuisia said, adding there were also some private equity groups which were keen on Philamlife.

Among the local groups expected by analysts to bid for Philamlife were Ayala Corp. together with its banking arm Bank of the Philippine Islands, San Miguel Corp., any of the country's taipans like Henry Sy, John Gokongwei or George Ty as well as global insurance rivals with local operations Sun Life of Canada, Manufacturers Life Insurance Co. (Manulife) and British financial giant Prudential plc.

The Yuchengco group is so far the only one that publicly declared interest in Philamlife even before AIG made the decision to sell.

Cuisia admitted that he himself was surprised by the decision of Philamlife's beleaguered parent company AIG, as announced Friday night, to include Philippine assets in its global streamlining.

?Since we're part of foreign life operations, we thought being a core asset we will be retained. But I guess in the Mathematics of it, if they have to pay $60 billion (out of the $85-billion lifeline that AIG has drawn), they have to sell some of the assets to generate that kind of money that will be used to pay the obligations to the Federal Reserve Bank (of New York),? Cuisia said.

The two investment banks tapped by AIG to handle the sale ? JP Morgan and Blackstone Group ? were set to determine the process and decide whether Philamlife would be sold as one group or as different units, he said.

Cuisia personally preferred that the buyer would gobble up Philamlife lock, stock and barrel, but said it would depend on interest from the market. ?I think there's a value selling it as a group,? he said, noting however that if there's a strong interest in Philamlife, and not in others, investment bankers would decide how to unlock better values.

?We will give our own inputs,? Cuisia said.

Based on data from the Insurance Commission, the flagship life insurance business alone has P108 billion in assets and a net worth of P21.4 billion as of end-2007. It has a staff of 1,500 people. The company chalked up a net profit of P2.56 billion in 2007.

Aside from life insurance, mutual funds and banking (Philam Savings Bank), the Philam group has interests in pre-need plans, healthcare, credit cards, property and casualty insurance, property management and development as well as business process outsourcing in the Philippines for a total of P170 billion in assets.