AIG Subpoenaed By Spitzer, SEC

American International Group, the world’s largest insurer, said in a statement yesterday that it has received subpoenas from New York Attorney General Eliot Spitzer and the Securities and Exchange Commission requesting information regarding “non-traditional insurance products and certain assumed reinsurance transactions.”AIG and seven other companies are the subjects of investigations into whether certain so-called non-traditional policies allow clients to hide losses.Warren Buffet’s Berkshire Hathaway, Chubb Corporation, St. Paul Travelers, and Ace are among the others.AIG said it will cooperate in responding to the subpoenas, which it received last week.The announcement follows an earnings call on February 9 during which the company’s chairman, Maurice “Hank” Greenberg, said that some regulators “may have gone too far when you look at foot faults and turn them into a murder charge” regarding a separate probe by Mr. Spitzer into alleged bid rigging.Mr. Greenberg said during the call that the main focus of Mr. Spitzer’s probe of AIG in relation bid rigging appeared to be one broker relationship at the excess casualty division of its American Home Assurance unit.Mr. Greenberg also said that an internal review involving 40 lawyers, 850,000 e-mails, and 30,000 documents found little wrongdoing by the company.AIG was implicated in a lawsuit Mr. Spitzer filed in October accusing Marsh & McLennan, the world’s largest insurance broker, of bid rigging.Yesterday’s news sent AIG’s stock plummeting on investors’ fears that the company’s regulatory problems aren’t over. AIG’s stock dropped $1.63 to close at $71.49 on the New York Stock Exchange.An analyst with New York-based Argus Research, David Anthony, said he saw little for investors to worry about in these latest subpoenas.“Unless Spitzer comes out and says ‘well AIG, you wrote $1 billion of this stuff in 2004 and our best estimate is that you made a $300 million underwriting profit doing it, and by the way, we think it’s an illegal contract so you have to restate your earnings,'” the announcement has little ramifications for AIG’s earnings, Mr. Anthony said.

AIG Subpoenaed By Spitzer, SEC

AIG Subpoenaed By Spitzer, SEC

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