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World Trade Center Captive Insurance Company facts for kids

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The World Trade Center Captive Insurance Company was a special insurance company created in New York City in July 2004. It was set up with money from the U.S. Federal Emergency Management Agency (FEMA). Its main job was to help cover risks for the city and companies that worked on cleaning up and rebuilding after the September 11 attacks. This company was created because a special law, Public Law 108-7, said it should be. The law allowed up to $1 billion to be used for this insurance company. It was meant to help cover claims from people who were injured or became sick because of the cleanup work.

What Was the World Trade Center Captive Insurance Company?

The World Trade Center Captive Insurance Company was a unique type of insurance company. It was created by the city of New York itself. This was done to manage the specific risks that came from the huge cleanup and recovery efforts after the 9/11 attacks.

Why Was This Insurance Company Needed?

After the terrible events of September 11, 2001, many people and companies worked hard to clean up and rebuild. This work involved many dangers, and some workers got sick or injured. Regular insurance companies might not have covered all these new and unusual risks. So, the U.S. government passed a law to create this special company. It was designed to make sure that the city and its contractors had a way to handle claims from people affected by the cleanup.

How Was the Company Funded?

The money for the World Trade Center Captive Insurance Company came from the U.S. government. Specifically, it received funding from the Federal Emergency Management Agency (FEMA). FEMA is a government agency that helps people and communities when disasters happen. They provided up to $1 billion to help the insurance company pay for claims.

Concerns and Criticisms

Over time, some people raised concerns about how the World Trade Center Captive Insurance Company was spending its money.

Why Were There Concerns About Spending?

One person who spoke out was Congressman Jerrold Nadler. He pointed out that the company spent a lot of money on legal fees. Legal fees are the costs of hiring lawyers and going to court. Congressman Nadler noted that the company spent over $103 million on legal fees. However, it had paid out much less, only about $320,000, for medical claims to people who were sick or injured. This difference made some people wonder if the money was being used in the best way to help the affected workers.

Reaching a Settlement

To resolve the many claims and concerns, a large agreement was made.

What Was the Final Agreement?

On June 10, 2010, a new agreement was announced. This agreement was a "settlement." A settlement is when people involved in a disagreement or lawsuit agree on a solution outside of court. In this case, the settlement gave the people who had made claims a total of $712.5 million. This agreement also aimed to reduce the amount of money that lawyers would receive. This meant more money would go directly to the people who needed it.

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