NU Online News Service, Oct. 27, 3:13 p.m. EDT

C.V. Starr & Company, the insurance entity headed by Maurice Greenberg, the former boss of American International Group, strongly denied that Mr. Greenberg's new firm is busy looting staff from AIG.

The statement today from the company was released after Douglas A. Love, executive vice president of Bermuda Investors Guaranty Fund, was quoted in The New York Times as saying that Mr. Greenberg, the former chair and chief executive at AIG, was "raiding people out of A.I.G..."

Concerning "reports about an exodus of employees from AIG," Starr said it understood that over the last year, "a number of AIG's 100,000-plus employees have left AIG to join the company's direct competitors in the global property and casualty and life insurance businesses."

However, Starr pointed out, "only 13 of those employees have joined C.V. Starr & Company Inc., which was formed in 1950 and focuses on highly specialized insurance lines," adding that "far more, we believe, have joined other, larger companies."

Taking a position that Mr. Greenberg has previously voiced, the company statement criticized government action towards AIG.

"The reason that employees are leaving AIG has less to do with these other companies, and more to do with the current [government] approach to AIG, which is unlikely to result in the repayment of the American taxpayer."

Starr noted that shortly after AIG first received federal assistance in September 2008, the Treasury secretary at the time, Henry Paulson, had announced on "Meet the Press" the Bush administration's intention to "liquidate" AIG.

"A successful liquidation, however, has proven impossible in the present economic climate, since buyers for AIG assets at fair values simply do not exist at this time. Fire-sale prices are bringing taxpayers, who now own almost 80 percent of AIG, only pennies on the dollar for their investment in AIG," according to Starr's analysis.

The company said that the government's "failed approach ignored the key value driver of AIG: Its people. Since the day the Treasury Department announced its plan to liquidate AIG, value has been destroyed because AIG's people and their relationships --AIG's business--are heading for the exits. The evidence is overwhelming and indisputable that the American taxpayer is an investor in a steadily diminishing asset as a result of this failed approach."

Again echoing previous statements by Mr. Greenberg, Starr announced that "rather than pursuing the liquidation approach, which is destined to result (in the long-term) in shortfalls to the U.S. Treasury and (in the nearer-term) to the accelerated exodus of employees from AIG, AIG should be allowed earn the money necessary to repay the American taxpayer."

It noted that "Mr. Greenberg has proposed to the U.S. Congress a plan to retain employees and assure repayment of AIG's federal assistance," and cited his testimony before the House Committee on Oversight and Government Reform on April 2.

Mr. Greenberg, who left AIG in 2005 amid an accounting scandal, still controls a huge block of AIG stock through his own holdings and entities he controls.

The Times story--in addition to quoting insurance executives to the effect that Mr. Greenberg is building Starr into "AIG Two"--noted that Starr was working with a number of AIG alumni who have gone to work for Ironshore, with which Starr has a joint venture.

The Times story can be accessed at http://www.nytimes.com/2009/10/27/business/27aig.html?pagewanted=2&_r=2&hp.

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