Travelers Settles Asbestos Coverup Claims

By Daniel Hays

NU Online News Service, May 25, 12:10 p.m.EDT?The St. Paul Travelers Companies, Inc. announcedyesterday it had reached a $90 million settlement to end legalactions stemming from its alleged failure to disclose what it knewabout asbestos dangers.[@@]

It was the second such settlement related to accusations thatthe insurer did not take steps to alert the public properly afterasbestos claims began piling in against its insured Johns-Manville,a Denver-based manufacturer that produced products containing thesubstance.

A spokesperson for the company said the previous actions, whichsettled for $412 million, were brought by claimants in states whichhave specific laws on the books related to improper claimshandling. The latest claims to be settled involved actions broughtunder states where only general common law principles apply.

Travelers said the settlement, if it receives court approval,would resolve future claims of this sort against Travelers. Thecompany said the previous statute law claims settlement is stillpending court approval.

The insurer said it "does not believe that there is any merit tothese direct action cases, whether based on statute or common law(as several courts in Texas and Ohio have recentlydetermined)."

But, Travelers said that by entering into the settlements "ithas availed itself of an opportunity to resolve not only thepending cases, but also similar future cases if the abovesettlements are approved by the bankruptcy court in connection withthe bankruptcy of former Travelers policy holderJohns-Manville."

The settlement will make a fund of up to $70 million availableto claimants plus up to $20 million in legal fees.

The company said it will fund the settlement from itsunallocated asbestos reserves and does not anticipate taking anearnings charge as a result.

According to The St. Paul Travelers, the agreement requires allclaimants who receive compensation from the fund to provide ageneral release for all asbestos-related direct action claims theymay have against Travelers.

Jay S. Fishman, chief executive officer of the St. Paul,Minn.-based company said he was pleased "with this settlement andthe substantial reduction we have achieved in our exposure toasbestos-related claims over the past year."