By Daniel Hays
Maurice Greenberg, the head of American International Group for nearly four decades, told the company in a letter from his lawyer last week that he would not seek reelection as non-executive chairman and would retire.
With the company under increasing scrutiny for transactions linked to Greenberg, the AIG board replaced him as CEO two weeks ago with Martin Sullivan. Following this latest news, the board announced that Frank G. Zarb, the boards lead director, will become chairmanat least on a temporary basis.
The board said it was informed of Greenbergs decision to retire in a letter from his attorney David Boies.
In his letter of resignation, Greenberg did not mention what action he would take concerning his posts as president and chairman of C.V. Starr, the Bermuda-based company identified in an analysis by the New York Insurance Department as the ultimate parent of AIG, according to a report by A.G. Edwards & Sons.
An AIG representative, Chris Winans, said he could not comment on “the status of those titles,” referring to Greenbergs roles at C.V. Starr, and that as far as he knew they remained unchanged.
AIG in February announced it was subpoenaed by the U.S. Securities and Exchange Commission and New York Attorney General Eliot Spitzers office in an investigation of non-traditional insurance products that investigators said might have been used improperly to improve the companys financial picture.
Two senior AIG executivesformer Chief Financial Officer Howard Smith and Christian Milton, a vice president for reinsurancewere let go when they refused to testify in the SEC and New York attorney generals inquiry, citing their right against self-incrimination. Greenberg is due to testify this month.
Spitzer, according to a spokesman, felt the replacement of Greenberg would help resolve his investigation, and said the AIG board has acted wisely thus far.
Reproduced from National Underwriter Edition, April 1, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.