The AFL-CIO, which represented pension plans holding 26 million AIG shares as of December, proposed director Frank Zarb as a replacement.

Greenberg, 79, retained the chairmanship after stepping down as CEO last week amid probes by New York Attorney General Eliot Spitzer and US regulators into reinsurance that may be used to manipulate earnings.

?AIG needs a strong and independent board to steer the company through this transition period,? William Patterson, director of the AFL-CIO?s office of investment, wrote in a March 17 letter. ?We believe this will require an independent chairman who can not only ask tough questions and hold management accountable, but also earn the respect of regulatory and legal authorities.?

Zarb, a managing director for Hellman & Friedman LLC, is chairman of the board?s executive committee. His assistant said he wasn?t available. AIG spokesman Chris Winans said the letter was addressed to the board, not the company, and declined to comment further. Greenberg?s assistant said he is overseas and not available for comment.