Bloomberg reports that American International Group Inc. (AIG), the world’s largest insurer, escalated its battle with ousted Chairman Maurice (Hank) Greenberg, accusing one of his private firms of using secret agreements to hijack AIG's business. Starr Technical Risks Agency, a unit of Greenberg’s C.V. Starr & Co. that has sold insurance in AIG’s name since 1992, entered into unauthorised reinsurance arrangements with Warren Buffett’s Berkshire Hathaway Inc., AIG said in a motion filed on Friday in New York State Supreme Court. The arrangements siphon premiums from AIG and hurt the company’s credibility with the reinsurers it has approved, the motion said.

Reinsurers share the premiums and claims of insurers, and the secret arrangement with Berkshire diverts premiums away from AIG’s reinsurers, the petition said. AIG said Starr Tech has also plotted to take direct business away from AIG by selling policies that Berkshire’s National Indemnity Co. unit "will share on the front end". The company asked a judge to stop Starr Tech’s business with Berkshire pending arbitration.

Update: AIG won court permission to temporarily block C.V Starr & Co. from luring insurance clients from AIG.Greenberg’s firm, C.V. Starr & Co., also claimed victory after New York State Supreme Court Justice Herman Cahn extended a Sunday order preventing AIG from denying access to client documents and office space. Both sides are also barred from removing documents. Cahn’s rulings apply through Thursday, 2 February, when another hearing is scheduled in his Manhattan courtroom.