Swiss Re Presses 'OneAttack' Theory
A legal action filed by Swiss Re last week is an attempt to speed insurance claims payments related to the Sept. 11 terrorist destruction of the World Trade Center and to hasten rebuilding in New York, according to a company executive.
Jacques DuBois, a member of the Swiss Re Group's executive board, also said that Swiss Re “firmly believes” that under the wording of the insurance binder it signed, “the attack by al Qaeda on the World Trade Center resulted in one insurable loss.”
The propertys landlord is seeking $7 billion to cover two losses from two attacks its says occurred when terrorists piloted a pair of jets into the towers.
But under the view expounded by Mr. DuBois, Swiss Re would be liable to pay for only one attack, which would lower the price to $3.5 billion for property damage and rent interruption.
“At the same time, we are also requesting that the court tell us to whom payment should be made to make sure that all underlying insureds receive their pro rata share,” he added.
Mr. DuBois said that Swiss Re's concern is that if “too much rent insurance were to be paid,” the amount of funds left over to pay for rebuilding the WTC would be eroded.
Swiss Re filed the declaratory judgment action in the U.S. District Court for the Southern District of New York on Oct. 22.
Real estate executive Larry A. Silverstein, whose companies hold a 99-year lease on the World Trade Center property, has maintained that each of the two crashes by airplanes into the towers counts as a separate attack.
Mr. DuBois indicated the litigation would center around the interpretation of the wording of the insurance binders. Final insurance/reinsurance policies were not yet in place on Sept. 11, but the World Trade Center insurers and reinsurers have agreed to be bound by binders that had been signed.
In the meantime, Swiss Re and other insurance and reinsurance companies have decided to advance a total of $75 million to the insureds, which include Mr. Silverstein's companies and the owner of the Trade Center, the Port Authority of New York and New Jersey. Management of the Center properties was transferred to Mr. Silverstein's companies shortly before Sept. 11.
Mr. DuBois said that the $75 million figure was arrived at on the basis of preliminary claims presented Oct. 8 by the Silverstein and Westfield groups–the two main lessees–for the period Sept. 12, 2001 through March 21, 2002. Those claims for business interruption actually sought $137 million.
As the largest Trade Center insurer, Swiss Re is responsible for 22 percent of the $75 million advance, Mr. DuBois revealed.
Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, October 29, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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