New York Republican Mayor Michael Bloomberg has written six insurers urging them not to use the new arrangement for rebuilding the World Trade Center site as an excuse to hold up payments to its developer.
Of the carriers involved, only GE Insurance Solutions (now owned by Swiss Re) indicated they would not hold up payments to developer Larry Silverstein.
Mayor Bloomberg, on his June 16 radio show, said he believed an arrangement could be worked out with insurers–but if not, warned they could be the target of legal action. The other insurers addressed in letters from the mayor were St. Paul Travelers Companies, Employers Insurance of Wausau, Zurich American Insurance Company, Royal & Sun Alliance USA, and Allianz Insurance Company.
Zurich said it had no comment, while Royal & Sun said they had not yet received the letter, and the issue was one which was the subject of ongoing litigation. Others did not respond when asked to comment.
In April, Mr. Silverstein reached a deal with the bi-state agency that owns the land–the Port Authority of New York and New Jersey–in which he agreed that insurance proceeds and $1.67 billion in Liberty Bonds would be used to finance rebuilding, and the PA would own the Freedom Tower as well as another of the five high-rise buildings to go up on the site.
Later, Mr. Silverstein warned that insurers–with whom he has fought in court over how much his claim was worth–had threatened to withhold payments because of this new agreement.
The mayor's letter said it made no sense for insurers to say that both the Port Authority and Larry Silverstein cannot rebuild the site and use insurance proceeds to help do so. He urged insurers to "reject unnecessary legalistic delays and hair-splitting," and not use the agreement as "pretext" not to pay rebuilding costs.
During his radio show, he said, "you can always sue," but first there was public pressure that could be brought to bear, and he did not believe carriers would want to take responsibility "for slowing down a memorial to 2,800 people–a memorial to an attack on freedom and democracy."
Alayna Tagariello, speaking for Swiss Re and GE Insurance Solutions, said that "we have been, and will continue to honor obligations under the terms of our coverage." She said attorneys for GE had said that conceptually, Mr. Silverstein's agreement with Port Authority "looks fine. We do reserve the right to review the final agreement. It appears to look fine from where it stands right now."
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