American International Group Inc. shuffled its management team, removing longtime CEO Maurice ``Hank'' Greenberg, in a first step toward trying to resolve widening federal and state probes into its property and casualty insurance business.

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NEW YORK (AP) — American International Group Inc. shuffled its management team, removing longtime CEO Maurice “Hank” Greenberg, in a first step toward trying to resolve widening federal and state probes into its property and casualty insurance business.


But ratings agencies today talked of “the potential for continued uncertainty” as the new executives named late Monday begin working to extricate the insurance behemoth from its regulatory problems and to put their own imprint on the company.


Unnerved shareholders pushed AIG stock down $1.96, or more than 3 percent, to $61.89 in afternoon trading on the New York Stock Exchange. The stock has been trading at a 52-week range of $54.28 to $77.36.


“Anytime an executive leaves there is uncertainty, particularly with one that’s been there as long as he (Greenberg) has,” said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. “Shareholders are worried about how all this is going to work.”


AIG’s board said Greenberg, 79, would retire from the chief executive post he held for nearly four decades but will remain nonexecutive chairman of the New York-based company.


British-born Martin J. Sullivan, 50, who had served as vice chairman and co-chief operating officer, was named CEO — only the third man to hold the post since AIG’s founding in 1919.


The board said that Steven J. Bensinger would be given the title of chief financial officer. It said Bensinger was replacing Howard I. Smith, “who has taken leave.” Company officials declined further comment on the matter. The board also announced that it would delay for at least two weeks the filing of its annual report, which had been expected on Wednesday.


Donald Light, a senior analyst with the research and consulting firm Celent Communications Inc. in Boston, said that investors were spooked by that.


“When a company is in crisis and replaces its CFO, it’s like putting a sign outside the building saying ‘our financial statements are about to change in a bad way,”’ Light said.


He added that the continuing regulatory probes “will be a distraction for whoever is managing the company.”


New York Attorney General Eliot Spitzer, federal prosecutors and the Securities and Exchange Commission are looking into the use of so-called finite insurance, or financial reinsurance, which they contend can be used to manipulate earnings.


One of the transactions being probed took place between AIG and Berkshire Hathaway Inc.’s General Reinsurance unit four years ago and apparently was intended to shore up AIG’s reserves. Reports have said Greenberg was personally involved.


Ratings agencies moved quickly to downgrade AIG’s debt ratings or put them on watch for downgrading.


A.M. Best Co. put its financial strength ratings for AIG subsidiaries “under review with negative implications.” The insurance rating agency cited “an increasing number of regulatory inquiries” as well as AIG’s delay of its annual filing.


Standard & Poor’s Ratings Services and Moody’s Investors Service revised their outlooks to negative.


Fitch Ratings service lowered AIG’s long-term issuer rating and unsecured senior debt obligations to AA-Plus from AAA, citing the “uncertainties and disruptions” of the investigations and management changes.


But Fitch also tried to make clear that the downgrade was not a vote of “no confidence” against Sullivan.


“The rating action in no way reflects any adverse opinion held by Fitch as to the qualifications of the newly appointed CEO,” Fitch said.


Julie Burke, an insurance analyst at Fitch, said that one concern was that management could get sidetracked by regulatory issues.


“We’ll be looking at financial results to be sure that all these distractions haven’t meant the company has taken its eye off the ball, which is operating a global insurance company,” Burke said.


Greenberg had led the company with an iron hand after replacing founder C.V. Starr, who died in 1968. A graduate of New York Law School, Greenberg has been with the company since 1960.


While Greenberg was the grand master of the property and casualty insurance industry, his autocratic management style rubbed many the wrong way, including two of his sons. Jeffrey Greenberg, 53, and Evan G. Greenberg, 50, both spent part of their careers at AIG, only to leave for other insurance opportunities when their father’s unwillingness to share — or consider ceding — power became apparent.


An earlier Spitzer probe into bid rigging and price fixing resulted in the resignation of Jeffrey Greenberg last October as chairman and chief executive of the insurance brokerage Marsh & McLennan Companies Inc. Marsh & McLennan reached a settlement in the case Jan. 31, agreeing to pay $850 million in restitution.


Evan Greenberg remains president and chief executive officer of Bermuda-based ACE Ltd.