A year of struggles: 2005 wasn't a great year for Hank Greenberg, former CEO of American International Group, but he has plans for the new year.

Not only is Maurice R. "Hank" Greenberg unapologetic, he is outraged.

"How do you think I feel? How would anybody feel? I've built one of the greatest companies in the world, and to suddenly be threatened by the attorney general; obviously, it doesn't feel good," he said in response to a question about what it's been like going through the past year.

The man who built the world's largest insurance company, American International Group Inc., discussed with Best's Review his reaction to New York state Attorney General Eliot Spitzer's investigations and the circumstances under which he left the company he led for more than 30 years. He also defended industry practices such as contingent commissions and finite reinsurance.

'I took a company that did not exist, a company that made $7 million in the first year to one that had 93,000 employees and was, when I left, earning close to $11 billion," said Greenberg, who wore a white shirt and a light brown tie as he sat in an armchair in a spacious, well-lit Manhattan office of C.V. Starr & Co. "I'm proud of that."

Had he left on his own terms, Greenberg, 80, would have retired in glory. That was his plan, and rumor had it in 2004 that he had named a successor to run AIG.

"There was going to be an orderly transition," he said, declining to say who he had anointed. "I'd stay in the company as long as the transition was necessary--long enough to make certain that the person chosen had all the tools, all the characteristics necessary to run a company like AIG. You really don't know until you put the person in the job."

Obviously, that didn't happen, he added.

Greenberg left AIG in March 2005, forced out as chairman and chief executive officer amid allegations that the insurance giant had engaged in shoddy accounting and reporting practices designed to mislead the public and boost its stock price. Since then, the company has restated several years of earnings, making adjustments that wiped about $2.27 billion off its 2004 consolidated shareholders equity.

While Spitzer, who brought most of the allegations, reportedly is nearing a $1 billion settlement with AIG, the prosecutor also is closer than ever to a courtroom showdown with Greenberg, the other defendant, who so far has refused to play ball. Greenberg said AIG is only settling because it is terrified of Spitzer's bullying tactics. "If you pay a fine, you're admitting to having done something wrong. I don't believe anything has been done wrong," he said.

AIG confirmed that it is negotiating a settlement with Spitzer but declined to comment further.

During the last week of January, a judge ruled that Greenberg must be allowed to view a report that AIG provided to Spitzer's office weeks before the attorney general filed his lawsuit--a report containing results of AIG's internal investigation of the accounting fraud claims. Greenberg's attorneys allege that Spitzer and AIG colluded to produce the report.

AIG denies that its actions are being controlled by the attorney general, but in and out of court, the insurer has made a point of stressing that it is cooperating fully with Spitzer, distancing itself from its longtime leader.

Greenberg has little relationship with the current management, including many of his handpicked executives who worked under him for decades. "They've been told by their lawyers that they should not speak to me," he said.

But while some have shut him out, a few of his old friends have rallied to his support, Greenberg said.

These people, he said, aren't speaking out about the allegations, "because nobody knows the facts," he said. "What people are coming out defending is the system. We're a country of laws, a country that believes in due process. We're a country that believes you're innocent until proven guilty. People are concerned in this country that the rule of law is being subjected to a method that'd destroy what we have in this country."

According to Greenberg, more people--in the insurance industry and elsewhere--would be speaking out publicly if they weren't afraid of Spitzer's tactics. "I think many people are reticent to speak out because of that very fact," he said. "There was a good example of that very recently when John Whitehead wrote a letter and was called and threatened." Whitehead is a former chairman of Goldman Sachs.

With or without his friends, Greenberg appears ready to defend himself on his own. He dismisses Spitzer's allegations that he cheated the Starr Foundation, a charity named after AIG founder Cornelius Vander Starr, as outrageous. The foundation has set up an independent panel to look into the allegations.

He's also defending some industry practices that have come under intense scrutiny since Spitzer launched his investigation of the industry in 2004. He says finite reinsurance arrangements, for example, a practice that regulators said insurers used to illegally smooth earnings, have a place in the insurance industry, and that he's pleased the National Association of Insurance Commissioners is working to set up rules that would clarify the issue.

Among the issues that led to Greenberg's departure was his alleged personal involvement in a $500 million finite reinsurance arrangement between AIG and Berkshire Hathaway Inc.'s General Re.

The former AIG chief said he favors full disclosure of contingent commissions between brokers and insurance companies. Such commissions, another controversial industry practice, involve brokers taking additional payments from insurance companies based on the volume and quality of business placed with the insurers.

On the future of AIG, Greenberg offered no predictions. However, the company's demonstrated resilience in the financial markets, posting three quarters of solid earnings since its legal woes began, is further proof that "I've built a very strong company, and the momentum continues," he said.

"It's the same company that it was when I left," he added. "You can't destroy a company like that overnight."

But would MG continue to dominate domestically, in fast-growing and competitive economies in Asia, for example, where the company has deep roots and became a household name? "I hope it does," he said. "It would depend on the management style, the entrepreneurship that helped build that company."

On his own professional future, Greenberg said there is no retirement in sight. "I'm not retiring. I'm very busy."

He remains chairman of C.V. Starr & Co. and Starr International, the largest shareholders of AIG. C.V. Starr, which runs insurance agencies, currently is making investments domestically and overseas and is planning further acquisitions this year, he said. The company continues to do business with MG, he said.

Indeed, between the pending civil trial and a still active professional life, Greenberg has a lot to keep him very busy for a long time.

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Maurice R. "Hank" Greenberg

* DATE OF BIRTH: May 4, 1925.

* SERVED IN U.S. Army from 1942 to 1945.

* 1948 GRADUATE of University of Miami and 1950 graduate of New York Law School.

* FORMER CHAIRMAN and chief executive officer of American International Group Inc.

* CURRENTLY chairman of C.V. Starr & Co. and Starr International Co.

* NET WORTH: More than $3 billion.

* FATHER OF Jeffrey W. Greenberg, former chairman and CEO of Marsh & McLennan Cos., and Evan G. Greenberg, president and CEO of ACE Ltd.

Sources: Forbes.com and NNDB.com