NEW YORK (Bloomberg) ? American International Group Inc., 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 its 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.

?Without immediate relief from this court, Starr Tech will succeed in hijacking AIG?s business and in ruining AIG?s good name and reputation with its policyholders and reinsurers,? New York-based AIG said in court documents seeking a temporary restraining order against the agency. C.V. Starr spokesman Howard Opinsky said the legal actions are a ?frivolous? attempt to stifle competition from his firm.

The claims underscore the divisive nature of the split between AIG and the man who ran the company for 38 years. Greenberg, 80, was removed in March amid an accounting probe by New York Attorney General Eliot Spitzer. C.V. Starr and Starr International Co., two firms started by AIG founder Cornelius Vander Starr, shared offices and personnel when Greenberg ran AIG. Now, as chairman of both, he?s severing ties.

?If Hank Greenberg is on one side and AIG is on the other, it?s bigger than just commissions,? said James Cox, a law professor at Duke University in Durham, North Carolina. ?It?s retribution, punishment against AIG.?

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. Buffett and Berkshire chief financial officer Marc Hamburg didn?t return phone calls seeking comment.

?There is absolutely nothing in the contracts with AIG that precludes the Starr agencies from using whatever underwriters they wish,? said Opinsky. ?AIG is desperately trying to prevent C.V. Starr from competing with them.?

In an agreement that became effective yesterday, National Indemnity will underwrite policies for energy and aviation clients of C.V. Starr, Opinsky said. The company has also signed a deal with Bermuda-based ACE Ltd., an insurer run by Greenberg?s son, Evan, Opinsky said.

The accounting probe at AIG, which led Spitzer to sue Greenberg and the company, also touched Berkshire.

Buffett, the 75-year-old billionaire chairman of the investment and insurance firm, became a witness for investigators examining the role Berkshire?s General Re unit played in a reinsurance contract AIG later corrected.

?Just because there?s a tangled history, doesn?t mean the parties shouldn?t or couldn?t do business together,? said Jacob Frenkel, a former federal prosecutor who now practices law at Shulman, Rogers, Gandal, Pordy & Ecker in Rockville, Maryland. Still, ?they can rest assured that every regulator out there will look to make sure everything is on the up and up.?

In a separate action in the same court yesterday, AIG sued C.V. Starr?s American International Aviation Agency to compel it to stop ?passing itself off to the market? as AIG?s agent. The agency ?blatantly flouted? a January 23 notice of termination, the suit said.

Spitzer?s May lawsuit accused Greenberg and AIG of using sham reinsurance contracts and other transactions to hide losses and understate liabilities from claims, and AIG restated 2000 to 2004 profit by $3.9 billion. AIG has said it aims to settle the case, while Greenberg has promised to fight.

The C.V. Starr matter isn?t the first legal battle between AIG and Greenberg. The insurer in September sued for control over 288 million AIG shares owned by Starr International, which had historically used its stock holdings as deferred compensation for AIG employees. The stake is worth more than $19 billion.