Finite - The perverse message from Planet Spitzer.

(From Reinsurance)

Not content with his campaign against the global insurance brokers, Mr Spitzer has launched a broad frontal attack on American International Group (AIG) - long recognised as the smartest firm in an admittedly not very smart industry.

Not only was AIG (purportedly) a willing accomplice in schemes whereby some brokers engaged in anti-competitive practices designed to maximise their income to the detriment of their clients, AIG (as Mr Spitzer assures us) also abused finite reinsurance contracts to make its balance sheet look pretty in years when the company would otherwise have posted a less- than-stellar performance.

Then there were the offshore reinsurance transactions, which perhaps ought not to have been booked as transferring risk away from AIG. And finally, there were some small (but perfectly formed) corporate vehicles kicking around the AIG empire, whose main purpose (allegedly) was to enrich AIG executives at the expense of AIG shareholders ...

AIG shareholders of course must be heartily sick of all this. Since Mr Spitzer launched his three-pronged attack, the stock price has dropped by 20-25%. At a stroke, Mr Spitzer has defended the interests of AIG shareholders to the tune of $50bn of their own money.

There's an element of hypocrisy in all this. The general feeling seems to be that if New Yorkers would just elect the pesky man as governor, shareholders and stakeholders could sleep quietly in their beds at night, certain that no more electioneering raids would be made on their stockholdings.

And on the job front, Marsh and Aon employees could once again roll up for work without the fear that Mr Spitzer's crusade would render them redundant.