N.Y. Insurance Chief Would Vet Greenberg Bid for AIG Units

October 1, 2008

New York Insurance Superintendent Eric Dinallo, charged with overseeing any sales of American International Group Inc.’s insurance units, said Wednesday he would consider bids from former AIG CEO Maurice Greenberg.

Greenberg, in a letter to AIG CEO Edward Liddy Monday, said he would like the chance to bid on assets that are to be sold as the company seeks to quickly repay an emergency loan for up to $85 billion from the federal government.

“He would be received and evaluated as any other suitor,” Dinallo told reporters after addressing an insurance conference in Philadelphia.

“He still has some open issues,” Dinallo added, alluding to outstanding civil charges against Greenberg.

Even so, Greenberg is not “explicitly disqualified from ownership,” he said.

Greenberg left AIG in 2005 following an accounting scandal and civil charges from then-New York State Attorney General Eliot Spitzer. He has denied any wrongdoing.

Greenberg was until recently AIG’s largest controlling shareholder, both through personal stakes and shares owned by investment firms C.V. Starr and Starr International Co. Inc., companies run by Greenberg.

In recent days, Greenberg has been selling shares, cutting his AIG stake to below 10 percent, which gives him more flexibility under New York insurance law.

Dinallo said C.V. Starr would also have to be evaluated by state regulators if it wanted to bid for AIG insurance units.

The government bailout of AIG gives it the right to take a 79.9 percent stake in the insurer.

(Reporting by Jessica Hall in Philadelphia; Writing by Lilla Zuill in New York; Editing by Brian Moss)

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