State Acheives $2 Billion Settlement of Outstanding World Trade Center Insurance Claims

Governor Eliot Spitzer and State Insurance Superintendent Eric R. Dinallo announced today that Silverstein Properties and seven insurance companies have reached a $2 billion settlement of all outstanding insurance claims arising from the destruction of the World Trade Center. The agreement, the largest in regulatory history, ends almost six years of legal battling and removes the last major obstacle to development at Ground Zero.   
  
With these insurance claims resolved, Silverstein Properties and the Port Authority can now obtain the necessary financing and meet the aggressive construction schedule that all agreed was essential for the rebuilding of Ground Zero. This agreement, negotiated by the Insurance Superintendent and the Governor, reflects the Spitzer Administration’s commitment to World Trade Center redevelopment as a top priority, and will ensure that all parties have the necessary resources available to make the World Trade Center a symbol of New York’s global commercial leadership.   
  
Silverstein Properties, Inc. leased the World Trade Center from the Port Authority in July 2001. When the planes destroyed the twin towers on September 11, insurance policies for the Trade Center had not been finalized. Suits were filed in October 2001 to resolve disputes over how much the insurance companies owed. The courts eventually determined that the most Silverstein Properties could collect was $4.68 billion. Until now, the insurance companies have paid about half of that total, leaving the remaining sum in dispute.   
  
Beginning in late March, Superintendent Dinallo held dozens of meetings with Silverstein Properties and the insurance companies. This month, when several outstanding issues remained unresolved, Governor Spitzer became personally engaged in the negotiations.   
  
The insurance companies involved in today’s settlement are:   
  
Travelers Companies, Inc.   
Zurich American Insurance Company   
Swiss Reinsurance Company   
Employers Insurance Company of Wausau   
Allianz Global Risks US Insurance Company   
Industrial Risk Insurers (now owned by Swiss Reinsurance Company)   
Royal Indemnity Company   
  
As part of the agreement, Silverstein Properties and the insurance companies have signed confidentiality agreements requiring that specific amounts paid by each company will not be disclosed. The total for all seven companies is $2 billion. These agreements settle all outstanding court cases and related proceedings.   
  
In September 2006, Silverstein Properties and the Port Authority achieved a global agreement for comprehensively rebuilding the World Trade Center site. The agreement called for the Port Authority to construct Towers 1 and 5, for Silverstein Properties to construct Towers 2, 3 and 4 along the eastern portion of the site, and for the Port Authority to prepare the "East Bathtub" foundation for construction of those towers. In order to help finance this rebuilding, Silverstein Properties and the Port Authority agreed to a split of the remaining insurance proceeds of approximately 56% to Silverstein and 44% to the Port Authority.   
  
The two sides have spent hundreds of millions of dollars on legal fees and other court-related costs. The agreements will save additional tens of millions in legal costs and allow the Port Authority and Silverstein Properties to focus on rebuilding at Ground Zero.   
  
The following individuals have been integral in helping to reach this agreement: Assembly Speaker Sheldon Silver fostered a discussion of the insurance issue at his hearings and sent letters to insurers; Senator Chuck Schumer sent letters to insurance companies and pressed for Senate hearings on this matter; Congressman Anthony Weiner was one of the initiative’s first political advoca