NAII Sends Asbestos Bill Objections To Senators

By Steven Brostoff, Washington Editor

NU Online News Service, July 15, 3:34 p.m. EDT,Washington?The National Association of IndependentInsurers is urging the Senate leadership to rewrite pendingasbestos legislation in order to assure certainty and finality inasbestos litigation.

In a letter to Senate Majority Leader Bill Frist, R-Tenn., CarlParks, senior vice president of government relations for the DesPlaines, Ill.-based NAII, said that the legislation approvedrecently by the Senate Judiciary Committee, S. 1125, expands thescope and cost of a proposed trust fund to the point that it may bemore costly and inefficient than the current broken system.

"Amendments added by the Judiciary Committee greatly increasethe scope and cost of the fund, to the point where there is nolonger either an upper limit to the fund nor any real estimate oftotal cost," Mr. Parks said.

He said that medical criteria for compensation were loosened tothe point where many plaintiffs with dubious connections toasbestos may now file claims and recover awards.

Moreover, Mr. Parks said, a financial backstop added to the billeliminates any certainty or finality associated with the trustfund.

Finally, he said, the legislation now has an automatic back doorreturn to the tort system should the fund run short of money.

Mr. Parks reiterated that these changes make the proposed systempotentially more costly than what exists today.

"The initial objective of developing a more equitable way ofdistributing scarce resources to asbestos victims who are trulysick, instead of those who are not, appears to have been lost," hewrote.

Mr. Parks urged Sen. Frist to work with the House leadership todevelop effective litigation management provisions, a system thatachieves true finality for businesses and insurers, and fairlycompensates victims in a timely manner.

Originally, S. 1125 envisioned a $108 billion trust fund toresolve asbestos-related claims based on specified medicalcriteria. However, amendments approved by the Judiciary Committeeincreased the size of the fund to $153 billion.

Moreover, insurance companies could be hit with an additional $1billion annual assessment if the fund is not large enough tocompensate all claimants.