NU Online News Service, Nov. 12, 2:38 p.m.EST

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NEW YORK--An executive of Chartis, the rebrandedAmerican International Group subsidiary, defended the company todayagainst competitors' accusations it was under-pricing because ofAIG's damaged financial reputation.

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The comments from Robert Schimek, chief financial officer ofChartis, came in an appearance at the National Underwriter/Ernst& Young 21st Annual Executive Conference for the Property andCasualty Industry.

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Mr. Schimek said Chartis, formerly AIU Holdings, encompassingthe domestic and foreign property & casualty business units ofAIG, puts a strong focus on underwriting and wondered why rivalshave chosen to grow in a market where they suggest pricing isirrational.

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His remarks came in response to a question by interviewer SamFriedman, group editor-in-chief of National Underwriter Property& Casualty. Mr. Friedman cited comments in the press by LibertyMutual CEO Edmund Kelly and others prior to Chartis Julyre-branding that AIG was under-pricing risks and prolonging thesoft market.

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Mr. Schimek said competitors' comments to the press representeda "degree of frustration" that they have been unable to unseatChartis as market leader.

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He said many who have complained have actually grown in premiumvolume according to recent results. If the market is so competitivethat pricing is irrational, Mr. Schimek asked, then why wouldcompetitors choose to grow in that marketplace?

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Chartis will remain as disciplined as possible where the pricingis still too aggressive, and will also walk away from business ifnecessary, Mr. Schimek said.

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He also addressed the issue of talent leaving the company sincethe troubles experienced at its parent AIG. Mr. Schimek said thatwhile talent has left, it has allowed others in the company to stepup into larger roles, and he said those people have done as well orbetter than the people they replaced.

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Using a sports team analogy concerning the company's availabletalent, Mr. Schimek said Chartis has a "really deep bench."

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He also spoke on the topic of AIG's loans from the government.He said while headlines in the press citing the $180 billion figureare technically correct with respect to the total amount oftaxpayer money involved, the headlines are misleading because thecompany does not owe that much.

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Some of the funds received involved AIG selling assets to theNew York Fed, he noted, and because assets were sold, the companydoes not have to repay anything.

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Additionally, the $180 billion also reflects unused lines ofcredit. The company does not have to repay unused funds, Mr.Schimek explained.

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AIG in third-quarter results reported Friday that its totalbalance outstanding from a Federal Reserve Bank of New Yorkfacility is $41 billion. This includes $35.8 billion of netborrowings and $5.2 billion of accrued compounding interest andfees, with availability of $24.2 billion.

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The company said as of Sept. 30, it had drawn down $3.2 billion,including $2.1 billion from $29.8 billion available under a SeriesF Preferred Stock Department of its Treasury Commitment.

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AIG's total balance outstanding from the Federal ReserveCommercial Paper Funding Facility was listed as $9.6 billion amongAIG Funding Inc., Curzon Finance LLC and Nightingale FinanceLLC.

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Mr. Schimek said with respect to AIG's efforts to sell businessunits to repay taxpayer money, there is no plan to sell any unitsassociated with Chartis. He said the foreign and domestic unitswere brought together, not taken apart to be sold, and that it isChartis' intention to keep the units together.

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