U.S. to probe WTC insurer for fraud

Dec. 3, 2006 at 4:00 PM

NEW YORK, Dec. 3 (UPI) -- The U.S. government is investigating New York's $1 billion World Trade Center insurance company, which has spent more than $50 million fighting claims.

The Department of Homeland Security will look into charges by Rep. Jerrold Nadler, D-N.Y., that the WTC Captive Insurance Co. violated congressional intent and misspent federal money to dispute more than 6,400 claims, including claims by ailing Sept. 11 responders, the New York Post reports.

Homeland Security inspectors with subpoena power will scrutinize the insurer, the agency says.

The carrier manages the $1 billion Congress approved to pay claims against the city and its contractors from the World Trade Center cleanup.

A report is expected in six to eight months, the Post says.

The insurer would not comment on the investigation, but has argued it has a "duty to defend" against the claims.

Records obtained by the Post show the company has spent more than $50 million on overhead, consultants and fees, including $32.9 million on law firms.

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