AIG chief set to step down

MAURICE “Hank” Greenberg, who turned American International Group (AIG) into a global insurance powerhouse, is stepping down as chairman this week as investigations into the company’s business practices mount.

After the US Securities and Exchange Commission put 10 new possibly questionable transactions under scrutiny, AIG said former Nasdaq chairman and AIG board member Frank Zarb will assume the duties of chairman on March 30 or March 31 when Mr Greenberg returns from a trip to Asia and Europe.

Mr Greenberg, 79, took the reins of the company in 1967, transforming it from an obscure seller of life insurance into a market leader with nearly $100 billion in revenue and 93,000 employees worldwide.

Mr Greenberg had already stepped down as chief executive two weeks ago as AIG became the latest insurance company to face scrutiny by regulators looking into abusive practices.

The SEC has subpoenaed 12 executives of AIG in an expanding probe of the insurer, sources close to the case said. AIG declined to discuss the substance of the investigation.

Government investigators had focused initially on a deal done in 2000 involving AIG and General Re, a unit of Warren Buffett’s Berkshire Hathaway, that may have artificially boosted AIG’s reserves.

But the SEC probe has since expanded to cover 10 other potentially questionable transactions and possible accounting errors valued at about $1bn (e774m).

Mr Greenberg’s pre-eminence was sealed in 2001, as AIG bought life insurer American General for $23bn (€17.8bn).