Greenberg: Finite Rules 'Opaque'
Maurice Greenberg, former chairman of American International Group, complained in print yesterday that the accounting rules regarding finite insurance are "opaque."
In a letter to the editor published in The Wall Street Journal, Mr. Greenberg gave what could be a preview of his defense in response to the civil suit filed against him and his company by New York Attorney General Eliot Spitzer accusing the insurer of using a finite insurance transaction as part of an accounting fraud.
"I do note the rules for finite reinsurance are opaque and only now have the NAIC (National Association of Insurance Commissioners) and the FASB (Financial Accounting Standards Board) undertaken to clarify these rules," Mr. Greenberg wrote, adding that he could not say anything further due to the pending litigation.
Both Mr. Spitzer's office and the Securities and Exchange Commission have focused on a finite reinsurance deal between Berkshire Hathaway Inc. subsidiary General Reinsurance Corp. and AIG.
In his lawsuit, Mr. Spitzer said the deal should have been accounted for as a loan and accused Mr. Greenberg and his finance chief, Howard Smith, of fraud in connection with that transaction.
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