Angela Chan had been lying awake at night after hearing that New York–based insurance giant American International Group was on the brink of collapse. The 59-year-old retired Hong Kong accountant has two policies with AIG, a disability insurance plan and a medical plan. For almost a decade she has been forking over about $2,000 a year in premiums — confident in the stability of the global company that was founded nearly 90 years ago. "I bought AIG because I thought it was safe and represented the financial strength of America," Chan tells Institutional Investor .

Her fears eased on September ...