PHILADELPHIA (Bloomberg) ? American International Group Inc., Allstate Corp. and two other insurers asked Pennsylvania regulators to block a plan by Bermuda-based ACE Ltd. to limit its costs from asbestos claims.

AIG, Allstate, St. Paul Travelers Cos. and Chubb Corp. want to stop ACE from selling three units facing claims from the cancer-causing fibre, according to a letter they sent this week to the state?s insurance commissioner.

The planned sale, announced last month, is the first step in ACE?s plan to remove its asbestos liabilities. The four competitors are concerned a new parent would permit the subsidiaries to become insolvent if asbestos claims surge. The insurers are clients of one of the units and are counting on it to pay some of their own claims.

?ACE is wrongfully attempting to shed its legal obligations to its policyholders,? according to the letter, which was sent by Mark A. Aronchick, an attorney representing the companies.

ACE spokesman Robert Grieves declined to comment. The four insurers expect ACE American Reinsurance Co., one of the units, to pay more than $60 million of their claims, the letter said. The four insurers are also sending a letter to the UK Financial Services Authority, it said.

?It really is a matter of principal,? AIG?s general counsel, Ernest Patrikis, said in an interview. ?We believe that we are best served by this subsidiary remaining with ACE.?

ACE inherited its liability from asbestos in 1999 when it bought Cigna Corp.?s Philadelphia-based property and casualty insurance business. In preparation for the sale, Cigna separated all policies covering asbestos and got Pennsylvania regulators to agree to limit its responsibility to pay asbestos claims.

ACE assumed that arrangement and has now reached that cap after adding more than $3 billion to claims reserves. Selling the asbestos units is one way to ensure ACE won?t spend more as competitors challenge the agreement with regulators.

Breathing fibres of asbestos, used as insulation and a fire retardant, can lead to cancer and other diseases decades later. Lawsuits from victims have led to dozens of company bankruptcies, and forced insurers to increase their reserves by tens of billions of dollars.

ACE said on January 6 that it would sell the three subsidiaries to Randall & Quilter Investment Holdings Ltd., which manages discontinued insurance businesses.

The units hold about 17 percent of ACE?s asbestos liabilities, and ACE chief executive officer Evan Greenberg said last month the company may sell its remaining asbestos units as well.

AIG, the world?s largest insurer and run by Greenberg?s father, Maurice (Hank) Greenberg, has also opposed ACE?s arrangement because all insurers contribute to a state guarantee fund that would bail out ACE?s units in the event of an insolvency.

Melissa Fox, a spokeswoman for the Pennsylvania Insurance Department, said a public comment period on ACE?s planned sale started on Saturday and runs for 45 days. She declined to comment on whether the department would respect the agreement capping ACE?s liabilities.