Greenberg: AIG Will Blacklist Problem States
By Caroline McDonald
Chicago
The chairman of American International Group said his company plans to launch an advertising campaign ranking states and their legal systems on how they treat businesses.
"Why would you want to invest in a state that takes you to the cleaners?" asked Maurice R. Greenberg, chairman and chief executive officer of AIG at the Risk and Insurance Management Society Inc. annual conference here.
"The issue that all of us confront, that the country confronts, is the tort system in the United States," he said. "Clearly it is out of control."
He noted that internationally, periodicals rate countries by their legal system, how they treat foreign investment, their deregulatory system and prejudice against foreign investment.
"Were going to do the same thing in the United States on the tort systems," he said. "Youll see these rankings in full-page newspaper ads."
Mr. Greenberg did not give specifics as to what statistics or data would be used for the listing, which presumably would deal with the size of awards and amounts of damages that state systems have allowed to be returned against firms in civil lawsuits.
Referring specifically to attempts currently being made to rectify problems with asbestos, Mr. Greenberg said that while federal legislation is in the works, this is only one part of what needs to be done. "We have to fight this battle on a state-by-state basis."
"Why should you buy municipal bonds" from a state that "takes you to the cleaners?" he asked.
"Every [state] government should be conscious of the fact that if they have a reputation that is viewed adversely by the business community, there will be something to help bring about change. This will be a wake-up call for many of them."
The ads will also include counties, "because within states there are some counties that are off the charts." He continued that "cozy relationships between the trial lawyers and the judge and juries leave very little room" for an out-of-state insurance company.
The battle also needs to be fought by consumers because the practice is anti-consumer in the long run, he told the risk managers, urging them to join in lobbying for legal system changes at state and national levels.
Mr. Greenberg said the tort system in the United States costs the economy $200 billion. "We have an economy thats struggling. We hardly need a monkey on our back."
Reproduced from National Underwriter Edition, April 14, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.
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