Singapore - Hundreds of anxious customers queued up following the near-collapse of US insurance giant American International Group (AIG) for a second day Wednesday, with many surrendering policies issued by its local subsidiary.

The queue was mostly composed of Singaporeans, but also included some policyholders from Indonesia.

Many American International Assurance (AIA) policyholders said the US Federal Reserve Bank's move to bail out parent firm AIG with an 85-billion-dollar bridge loan had not eased their concerns.

A bankruptcy filing by AIG, a huge world player in insuring risk for institutions, would have had an even greater impact on the US and global finance system than Monday's 600-billion-dollar bankruptcy by Lehman Brothers Holdings Inc, industry experts warned.

The initial line of 100 customers on Wednesday swelled to hundreds, undeterred by the long queues and waits stretching for hours.

"There is a lot of uncertainty in the US market," said a 45-year-old woman requesting anonymity. "I'm not taking any chances."

Customer John Tan, 53, said he was surrendering five policies that he has owned for 12 years. He expressed fears of losing "everything."

AIA and Singapore's central bank both urged customers against giving up policies after nearly 1,000 people descended on the AIA Customer Service Centre on Tuesday. The central bank warned such action might mean financial losses for customers and the loss of potentially essential protection.

The subsidiary of AIG sought to ease concerns by assuring policyholders that it has more than sufficient capital and reserves to meet its obligations.

The funds maintained in the city-state "are segregated from AIG and are held specifically for the purpose of meeting our obligations," an AIA statement said.

A hotline set up by AIA was inundated with concerned callers.

Economists said the effects of the turmoil on Wall Street are not as severe as during the Asian financial crisis of the late 1990s.

"Asia is not at the epicentre of this crisis," said Citigroup's Kit Wei Zheng. He noted the region has restructured and is more resilient.

With 4,000 agents and more than 2 million policies in force, AIA is one of the largest insurers operating in Singapore. dpa