Carl Icahn, the activist investor calling for a breakup of AIG, said the alternative plan presented last week by the insurers CEO was inadequate and that hes assembling a slate of directors to shake up the company.

AIGs Sid Sankaran, who has been designated to be the insurers next CFO, said that activist investor Carl Icahns proposal to break up the company would punish investors by jeopardizing tax assets and pressuring capital measures.

AIG plans to return $25 billion to shareholders over the next two years.

AIG's plan to spin off a portion of its mortgage insurance unit is almost pointless given the challenges that CEO Peter Hancock faces to fix the much larger property-casualty business, an analyst at Keefe, Bruyette & Woods said.

Activist investor Carl Icahn, whos pushing AIG CEO Peter Hancock to shrink the insurer and boost returns, said the CEOs presentation next week on his vision must offer a drastic strategic shift.

Willis Group Holdings Plc advanced in New York trading after it was named to join the Standard & Poors 500 Index.

AIG, the insurer pressured by activist investor Carl Icahn to boost returns, announced a plan to repurchase another $3 billion of shares.

Greenlight Capital Re Ltd., the reinsurer whose chairman is hedge-fund manager David Einhorn, erased gains from its 2007 initial public offering price after losses from investments and underwriting.