GREENBERG TO RETIRE AS AIG CHARIMAN:

Maurice “Hank” Greenberg will step down as Chairman of American International Group’s Board of Directors, ending his more than 40-year relationship with AIG. Also, Warren Buffett, the well-known investor and chairman of Berkshire Hathaway, owner of General Reinsurance, one of whose transactions with AIG is part of the probes, will be questioned by regulators on April 11, one day before Greenberg is to be grilled. Greenberg resigned as AIG’s CEO earlier this month. Since then pressure has continued to mount from investors that he step aside entirely as the probes continue to erode the world’s largest insurer’s share price. His full resignation follows reports that AIG had uncovered evidence that some of the company’s filings with the Securities and Exchange Commission and the New York State Insurance Department might have contained inaccuracies worth as much as $1.5 billion. Greenberg was one of 12 directors who received supoenas on March 28, asking him to give evidence concerning AIG’s finances. Most of the accounting transactions being audited involve AIG’s relationships with various reinsurers, including General Re and Barbados-based Richmond Insurance Co. and Union Excess Reinsurance Co. AIG’s relationship with Starr International Co., which handles deferred compensation for AIG executives, is reportedly also under review. Greenberg announced his retirement in a letter from his lawyer, David Boies. Frank Zarb, the former NASD chairman and chief executive, who is the lead director on the AIG board currently, will assume Greenberg’s duties as non-executive chairman until a new chairman is selected. Meanwhile, Buffett has been called by regulators interested in whether he had any knowledge or involvement in a reinsurance transaction in 2000 between General Re and AIG. AIG’s stock has lost almost a quarter of its value since Feb. 11, when it first reported receiving subpoenas from the SEC and Spitzer.

Topics Reinsurance AIG