New York City – Today, U.S. Rep. Anthony Weiner (D-Brooklyn & Queens) called for stiff fines against insurance companies that have delayed work at Ground Zero by refusing to pay out on policies that covered the World Trade Center.  Weiner urged the State Insurance Department to direct the penalties toward the completion of the World Trade Center Memorial in honor of the victims of 9/11.

The push comes as new data is released that shows that the insurances companies have actually been profiting from the delays to the tune of more than $188 million.

Before 9/11, Larry Silverstein, the leaseholder for the World Trade Center Complex, took out property insurance on the buildings, which was provided by over a dozen companies since no one insurer could afford to provide the entire coverage. Following the terrorist attacks on 9/11, some insurers paid immediately while others have continued to use the slow pace of the courts as an excuse for delaying their obligations. 

The outstanding claims are owed to Larry Silverstein and the residents of NY and NJ for the redevelopment of the World Trade Center complex and the surrounding area.  If the claims, which should have been settled years ago, are not paid immediately, the insurance companies will delay the reconstruction of the World Trade Center.

What’s more, while the insurers delay in fulfilling their responsibilities, they are reaping millions of dollars in interest off the unpaid claims, a practice known as “interest on the float.”  Over the last four years, the insurance companies have earned between $188 million and $390 million “on the float” based on estimates provided to Rep. Weiner’s office.  And insurance companies may get to keep that money, motivating big insurers to continue delaying payment on their 9/11 obligations. 

Over half a dozen insurers owe between $1.1 billion to $2.2 billion for the World Trade Center with the top three delinquent insurers – Swiss Re, Royal Specialty and Allianz – earning a combined $167 million to $320 million in profits from the 9/11 attacks.  Most of the insurers are European companies with substantial New York operations.

In a letter to Insurance Superintendent Mills, Rep. Weiner asked the state’s chief insurance regulator to levy fines on the delinquent insurers equal to the interest earned on the unpaid claims so that no company profits from the tragedy of 9/11.  Weiner proposed that the fines – which would amount to $188 million to $390 million – fund the completion of the World Trade Center Memorial.

 “If these insurers can’t uphold their obligations then they deserve to be penalized,” Weiner wrote in his letter to Mills.  “Funds that are lining the pockets of the insurers should be used to honor the memory of the victims of 9/11.”

“I urge you to use the powers of your office to make it clear that this behavior will not be tolerated by the State of New York,” added Weiner.

A copy of Rep. Weiner’s letter to Insurance Superintendent Mills is attached to this release.

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The Honorable Howard Mills

Superintendent

New York State Insurance Department

25 Beaver Street

New York, NY 10004

Dear Superintendent Mills:

It has been almost five years since 9/11, and yet some of the companies that insured the World Trade Center still refuse to release the hundreds of millions they owe the lease holder and the Port Authority of New York and New Jersey to rebuild Ground Zero.  I write to urge you to seize the profits these companies have accrued, and direct the funds toward completion of the World Trade Center memorial.

            As you know, the leaseholder of the World Trade Center site took out more than $3 billion in insurance before 9/11.  Yet, less than a month before the five-year anniversary, many of those who insured the site have failed to pay even the minimum amount they owe on the policies.  The motivation for the delay is plain – greed.  Data complied by my office reveals that these insurers have generated over $188 million in additional profits by investing money that should have long ago been invested in rebuilding Ground Zero.

I urge you to use the powers of your office to make it clear that this behavior will not be tolerated by the State of New York.  I propose that you seize the profits these delinquent insurers have made from their refusal to pay, and direct those funds to fill the gap needed to construct the World Trade Center memorial.

If these insurers cannot uphold their obligations then they deserve to be penalized.  Funds that are lining the pockets of the insurers should be used to honor the memory of the victims of 9/11.

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