Judge Grants AIG Restraining Order Against Ex-CEO’s Starr Agency

February 9, 2006

A New York judge has granted American International Group a restraining order against its former chief executive officer, Maurice Greenberg, and his agency, Starr Technical Risk Agency, that bars Starr from placing its AIG business with other insurers.

The order bars Greenberg’s agency from pursuing contracts with National Indemnity, a Berkshire Hathaway unit, for business currently with AIG. Starr Technical is a managing general agency that specializes in oil and chemical industry insurance.

New York State Supreme Court Justice Herman Cahn said his restraining order will remain in effect until the parties settle their differences in arbitration.

AIG has claimed that Starr Technical has been using “unauthorized” reinsurance agreements with National Indemnity to take business now placed with AIG and give it to other insurers. AIG maintains that Starr Technical and AIG have had an exclusive contract since 1992, which includes allowing Starr Technical to sell policies in AIG’s name.

C.V. Starr has countersued charging that AIG is trying to keep its agency from competing. Starr claims that its agency is free to write accounts with other carriers when AIG is not competitive. Its lawyers have accused AIG of trying to close down Starr agencies and urging clients not to do business with Greenberg’s companies.

In a separate development, AIG has agreed to a $1.6 billion settlement over federal and state charges involving fraud and other misconduct.

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