WTC insurers: we won't settle Swiss Re ready for round two in court.

Despite a plea from Governor George Pataki, the insurers of the World Trade Center are digging in their heels over Larry Silverstein's claim and say they won't hand over a penny more than $3.5 billion, half of what experts say it will take to rebuild the site.

"If Silverstein wants to settle this, he will take the $3.5 billion," said a determined Jacques E. Dubois, chief executive of Swiss Re.

The comment came after Pataki stepped into the ongoing battle over the World Trade Center insurance. Silverstein wants the insurers to cough up more than $7 billion and classify the Sept. 11 attack as two separate incidents. However, the insurers, led by Swiss Re, say it was only one incident and will only offer him half.

In an attempt to get both sides to reach a compromise, Pataki has asked them to resolve their differences for the sake of the redevelopment of ground zero.

Last month, Silverstein lost the last round in court when a U.S. Court of Appeals ruled that the two airliners that hit the twin towers on Sept. 11, 2001 were one event.

He has welcomed the governor's intervention and his spokesman said, "Mr Silverstein is always willing to discuss a settlement, so long as it leads to the full rebuilding of ground zero that realizes Daniel Libeskind's master plan."

However, the insurers are bracing themselves for the next court round. "We are going to trial to resolve this," said Dubois. "And by the way, we expect to prevail in court."

After the request from Pataki, Kevin Rampe, president of the Lower Manhattan Development Corporation, met with Silverstein and Swiss Re, the largest insurers, to stimulate the sparring parties to come to an agreement, according to published reports.

With the insurers refusing to settle, the battle will continue in a jury trial this fall.

Swiss Re is responsible for 25 percent of the $3.5 billion insurance settlement that would be paid in installments during the rebuild process, according to the Wilprop form, the form it claims was in force and defines the attacks as one incident, said Dubois.

Insurers, St. Paul, also stands by the last court decision. "We're pleased with the decision and believe it's fair to the parties involved," said a St. Paul spokesperson last week. "The decision affirms the lower court's declaration that The St.Paul is obligated to pay its policy limit (and not the double limits recovery sought by the Silverstein parties) for the property owned by Silverstein at the World Trade Center,"

The spokesperson at The Hartford insurance company said it already paid their amount of the settlement.

"The Hartford had a very small piece of the coverage written on the World Trade Center," said the spokesperson. "Under a policy underwritten by Hartford Fire, we have paid $32 million. A few weeks ago, the Second Circuit Court handed down a decision that affirmed a previous ruling and resolved a per-occurrence limit of $32 million already paid by The Hartford for one occurrence."

"Still unresolved is a per-occurrence limit of $2.5 million already paid by The Hartford for one occurrence. That $2.5 million payment stemmed from a policy underwritten by our subsidiary Twin City."

Royal & Sun Alliance, the remaining insurer declined to comment and the Governor's office would not comment on the settlement request.

Editors note. Due to an editing error, a headline in last week's REW stated that the planned new Freedom Tower would not be the tallest building in the world. At 1,776 ft., the tower will be the tallest building in the world.