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Name and title: Markus U. Diethelm, chief legal officer and head of group regulatory and government affairs Age: 46 The company: Swiss Reinsurance Co. is the world’s second-largest reinsurer and the premier life and health reinsurer. It offers the full range of traditional insurance options, as well as property and casualty reinsurance and capital and risk-management products and services. In spreading risks across a diversified, global capital base, Swiss Re performs as a banker, corporate financial expert and asset manager. “Anything on the surface of the earth” can potentially be insured, said Diethelm, and he stated that 70% of the United States’ major natural catastrophe risks are covered by Swiss Re and its competitors. The company was established in Zurich, Switzerland, in 1863 and its North American subsidiary, Swiss Re America, has been stateside since 1910. Swiss Re operates more than 70 offices in 30 countries, with 8,500 employees. The publicly held company handles $16.9 billion in gross premiums and has had a negative balance sheet in only two years since its formation. Key case: Diethelm was the chief legal architect and strategist for Swiss Re in a milestone commercial property insurance dispute arising from the Sept. 11, 2001, attack on the World Trade Center (WTC) in New York. In July 2001, 23 insurers agreed to provide coverage for developer Larry Silverstein’s World Trade Center Properties LLC, holder of a 99-year lease with the Port Authority of New York and New Jersey. Swiss Re was the largest insurer, having provided $877.5 million in coverage, roughly one-quarter of the total WTC program of $3.54 billion. In the disaster’s aftermath, Silverstein took the position that since two buildings were attacked by two planes in two distinct events, he was entitled to a double payout of the $3.54 billion policy limit. He sought immediate payment of $75 million, per quarter, citing “business interruptions.” Diethelm, characterizing his own stance as “essentially arguing that a deal is a deal,” then made the decision to sue Silverstein, asserting that the maximum payout cannot exceed the total sum insured. On Oct. 22, 2001, Diethelm, who also brought aboard Simpson Thacher & Bartlett’s Barry R. Ostrager and Mary Kay Vyskocil, filed a declaratory judgment in U.S. district court in Manhattan, seeking to limit Swiss Re’s obligation to a single-loss limit. Diethelm thus became embroiled in a case, spawned by the largest-ever insured loss and worst man-made loss, that would revolve around three crucial points: Which policy form was in effect? Was the attack therefore one or two events? And what would be the appropriate payout? On May 3, in SR International Business Insurance Co. Ltd. v. World Trade Center Properties LLC, No. 01 Civ. 9291 (S.D.N.Y.), a jury sided with Swiss Re, concluding that “the total destruction of the World Trade Center resulted from one series of similar causes.” The jury found that Swiss Re and eight other insurers had bound their coverage to the so-called Wilprop form that, according to a prior ruling, defined the attack as a single occurrence, thus limiting Swiss Re’s liability to a single-loss payout. Diethelm anticipates a Silverstein appeal. Diverse duties: On a day-to-day basis, Diethelm is immersed in general litigation and regulatory, licensing and compliance matters, and he advises on acquisitions and employment issues. He said he is in “the risk-mastering field,” and his areas of concern are as far-flung as Swiss Re’s. These include global warming, hospital insurability, obesity, motor liability and natural catastrophes. Swiss Re even sells weather derivatives. Terrorism insurance?: The WTC attack also brought the concept of terrorism insurance to our shores. Previously, Diethelm said, terrorism was more the concern of Israel, the United Kingdom and Spain. Terrorism insurance and whether the private sector can manage it are now an issue for Swiss Re. Diethelm and his peers are seeking more federal involvement (a process made more difficult, in part, because the industry is regulated by the individual states). Two bills, the Senate’s Terrorism Risk Insurance Act and the House’s Terrorism Risk Protection Act are now on the table, but are considered to be baby steps in getting the federal government to underwrite insurance for acts of terror. Legal team: As the man responsible for Swiss Re’s legal risk management, Diethelm supervises an internal staff of 120 legal counsel. Areas of practice include claims, litigation, corporate, capital management and labor. The company’s three business groups-property and casualty, life and health, and financial services-have general counsel who report to him. Diethelm estimates that half of the legal load is handled in-house, and he turns to four New York-based firms to provide outside counsel: Paul, Weiss, Rifkind, Wharton & Garrison; Skadden, Arps, Slate, Meagher & Flom (for investment and corporate transaction work); Willkie Farr & Gallagher (for securities matters); and Simpson Thacher & Bartlett. Diethelm has also established relationships with lawyers who can provide external counsel in particular localities, as needed. Route to the top: Diethelm’s legal education and law firm career had their genesis in his native city of Zurich. He earned a degree from the University of Zurich Law School (1983) and then achieved advanced degrees from Stanford Law School (a master’s in 1988, followed by a doctorate in 1992). Zurich’s B�r & Karrer was his initial employer, and in 1988 he joined Paul Weiss as a foreign associate. From 1989 to 1992, he practiced with New York’s Shearman & Sterling, specializing in mergers and acquisitions. Los Angeles-based Gibson, Dunn & Crutcher was the next stop: From 1992 until his arrival at Swiss Re in April 1998, he focused on corporate matters and securities transactions while operating out of the firm’s Brussels and Paris offices. He gained valuable experience in financial-reporting issues and the use of financial statements, as well as litigation and special investigations, all areas he would later draw upon in the World Trade Center matter. Personal: Diethelm and his wife Kim are the parents of Kira, 7, and Amelina, 3. He is fluent in four languages: German, French, Italian and English. He seeks diversion in snow sports including skiing and skeleton riding, a form of sledding. Last book and movie: Guns, Germs, and Steel: The Fates of Human Societies, by Jared Diamond, and Runaway Jury.

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