NEW YORK -- Another American insurance giant lashed out yesterday at a survey by Public Citizen listing companies that would be imperiled by a severe recession.
"It's ludicrous and it's wrong," said American International Group Chairman Maurice Greenberg of the public interest lobby's Oct. 15 report. "We are going to pursue this until it is put right."
Last week, Washington-based Public Citizen removed ITT's Hartford Insurance and Aetna from the group of five companies originally listed as vulnerable.
Their inclusion, said Public Citizen spokesman Robert Dreyfuss, was the result of two tabulating errors concerning one of the six categories used to determine each company's health.
But Public Citizen remained adamant on the potential for difficulty at AIG, as well as at Baltimore-based USF&G and Liberty Mutual.
Mr. Greenberg said AIG was willing to go to court to get a retraction and might seek financial penalties.
Such reports usually would be shielded from penalties under the constitutional right to free speech, but AIG's counsel, noted First Amendment attorney Floyd Abrams, suggested that Public Citizen's conduct could be construed as malicious.
The criticism of AIG was particularly jarring because the company enjoys a preeminent credit rating and has earned strong profits from the underwriting part of its insurance business while many competitors remain in the black only through the investment proceeds from money-losing insurance policies.
"Not only do we have the best balance sheet" in the industry, Mr. Greenberg said, "but we have the best income statement."
The study by Public Citizen has generated tremendous controversy within the industry. Coming in the wake of massive losses at thrifts and banks and a growing number of insolvencies among insurance companies, it raised concern that financial rot was pervasive.
Public Citizen's report faulted state regulation of insurance companies, the methodology of independent rating agencies and five major companies, all of which harshly criticized the report.
Representatives of the three primary rating agencies, Moody's, Standard & Poor's and A.M. Best Co., denigrated Public Citizen's conclusions at a news conference yesterday at AIG's headquarters off Wall Street.
Because of the report, Mr. Greenberg said, AIG has received calls from regulators, employees and clients around the world. He said some business had been lost and that "great harm" had been done to the industry.
In response to AIG's objections, Mr. Dreyfuss of Public Citizen said, "We hope they wouldn't see this as a cause for legal action, but . . . we can't retract a report that is factually correct."
Public Citizen President Joan Claybrook addressed a four-page response to AIG concluding that the company's objections "simply are not persuasive. Public Citizen stands by its conclusions."
Ms Claybrook agreed to debate Mr. Greenberg on CNN tomorrow evening.