NEW YORK, Aug. 3 (UPI) -- U.S. insurer American International Group and its former chairman are set to fight over which party can book a set of losses.
The disagreement stems from losses incurred by a Barbados-based offshore reinsurance company known Union Excess, set up by former AIG chairman Maurice Greenberg as a way to reward top-performing AIG employees.
For its part, AIG is struggling to regain credibility after accusations of accounting improprieties and claimed the Union Excess liabilities in an apparent bid to take an unusually conservative accounting posture.
But a company Greenberg controls has other ideas. Starr International, which Greenberg used to reward top performers when he was chairman of AGI, wants to become a conventional investment company. To that end it recently decided to use Generally Accepted Accounting Principles.
Starr hired as an independent auditor Lazard Levine & Felix to review its books. LLF recommended that Starr absorb the Union Excess losses, citing contractual obligations.
If Starr decides to follow the LLF advice, the Securities and Exchange Commission will have to settle the dispute.
