Regulators in New York and Pennsylvania were among nine regulators to approve the sale of American International Group’s direct and agency auto business to Farmers Group.

Prior to leaving office July 3, New York State Insurance Superintendent Eric Dinallo approved the sale of American International Insurance Co. and AIG National Insurance Co., members of AIG’s Personal Auto Group based in New York, which consists of a total of 18 insurance companies.

Steve Poizner

Four days earlier, California Insurance Commissioner Steve Poizner announced that AIG’s Personal Auto Group, which includes 21st Century Insurance Group, based in California, can also be sold to Farmers, a subsidiary of Zurich Financial Services.

In April, Farmers announced it would pay $1.9 billion for 21st Century Insurance Group, the wholly owned subsidiary comprising AIG’s U.S. personal auto business. AIG’s Personal Auto Group wrote more than $3.5 billion in premiums nationwide last year.

The transaction, which closed July 1, required the approval of both state regulators since it involved sales of state-based companies.

Dinallo, who announced his resignation in May and is rumored to be considering a run for New York’s attorney general post, called the sale of the two New York units “a win for everyone, including taxpayers, policyholders and the companies’ employees.”

“These two companies will remain domesticated in New York,” he said in a statement. “It furthers the restructuring of AIG while placing AIG’s personal lines policyholders with one of the nation’s largest insurers. The unprecedented speed with which numerous state regulators worked to approve this transaction shows the responsiveness of the same state regulation that preserved the value of these companies.”

Poizner said “after a thorough review” by his department, he gave the sale his approval.

“Before authorizing this purchase, I ordered [California Department of Insurance] legal and financial experts to conduct a comprehensive review of the terms of the purchase agreement, which has now been completed. As a result of this purchase, 21st Century policyholders should not expect to see any impact to their existing policies.”

Pennsylvania Insurance Commissioner Joel Ario called the goal of the transaction “to ensure that policyholders would not be adversely impacted.”

“This is evidenced by the subgroup’s commitment to a thorough and comprehensive review of the terms of the purchase agreement,” he said in a statement.

The sale of AIG’s personal auto lines to Farmers affects nine states: California, Colorado, Delaware, Hawaii, Minnesota, New Jersey, New York, Pennsylvania and Texas.