An agency under the C.V. Starr umbrella will now offer commercial insurance coverage underwritten by Berkshire Hathaway and Ace USA, it was disclosed today.
New York-based Starr Technical Risks Agency Inc., now under the effective control of former American International Group Chief Executive Officer Maurice Greenberg, announced the arrangement.
The agreement further widens the gap between the once closely intertwined Starr and AIG entities currently in a legal battle over the terms of their split.
Starr Tech had been enjoined by court order from going after current business that customers have with AIG. But that changed earlier this month when AIG unilaterally severed the relationship between the two entities, an act which Starr Tech called a breach of contract.
AIG forced the ouster of Mr. Greenberg as chairman last year in the aftermath of allegations of wrongdoing centering on broker compensation issues and accounting misdeeds.
Mr. Greenberg has been using the Starr agencies as a vehicle for his renewed activity in the insurance industry. AIG made an offer for Starr, but it was rejected, with Mr. Greenberg's attorneys charging AIG with attempting to buy the company at fire sale prices.
The two parties are now attempting to resolve their differences over disputed business through arbitration.
Starr Tech will offer $200 million of underwriting capacity through Berkshire Hathaway and ACE, both of which have close ties with Mr. Greenberg, with ACE being headed by his son, Evan.
In a related development, AIG said it has formed a new underwriting unit to concentrate on difficult-to-place classes of business.
AIG Specialty Excess will respond to all in-force business, as well as new and renewal business currently handled by C.V. Starr & Co. agency, one of four units in the Starr realm.
Chris Maleno, current president of AIG Excess Casualty, will add the new business to his portfolio.
AIG Specialty Excess will concentrate on business sectors such as construction, transportation, public entities and educational institutions.
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