Steinberg Steps Down as Reliance Group Chief

Saul P. Steinberg quit as chief executive of his flagship Reliance Group Holdings Inc. as the insurer moved to shore up its finances, selling its only profitable business unit and eliminating the quarterly dividend. Steinberg, the former corporate raider who once tried to buy Walt Disney Co., was replaced by George R. Baker, a board member of almost 30 years. Reliance also named Baker to replace Robert S. Miller Jr., who resigned as president after three months on the job. Steinberg, 60, will remain as chairman. He stepped aside as the New York-based company announced the sale of its surety business to Citigroup Inc., for $580 million, which will help repay debt. Reliance said it also may spin off or sell to the public its Internet insurance operations and its technology consulting business. The moves were intended to help stave off downgrades from ratings companies that have been reviewing the insurer’s financial strength as losses mounted. Reliance shares declined $1.25 to close at $4.13 on the New York Stock Exchange, amid concern that the steps weren’t enough to stem losses.

Meanwhile, Aetna Inc. tapped Miller, a corporate turnaround specialist, as a special advisor to William Donaldson, who the health insurer named chairman, president and chief executive Friday after previous CEO Richard Huber resigned under pressure from Aetna’s board. Miller had worked at Aetna sporadically in the early to mid-1990s, when he helped the management team shift Aetna’s focus from property casualty insurance to health insurance. Aetna’s shares closed up $1.63 at $41.13 on the NYSE.