GOP Win Seen Aiding Class Action Reform

By Arthur D. Postal, Washington Bureau Chief

NU Online News Service, Nov. 3, 2:50 p.m. EDT,Washington?The Republican presidential election victory,coupled with a three-seat gain in the Senate, is being viewed bythe property-casualty insurance industry as paving the way fastclass-action reform in the next Congress.[@@]

One of the keys to this vision is that Sen. Arlen Specter,R-Pa., will ascend to the chairmanship of the Senate JudiciaryCommittee. He is a strong supporter of class action and asbestoslitigation reform, and seen as a more adept insider than thecurrent chairman, Sen. Orrin Hatch, R-Utah. Sen. Hatch is steppingaside because of term limits.

Industry officials said the election also saw the victory of anumber of people to state supreme courts who are viewed assympathetic to the industry position on product liabilitylitigation, and passage of several initiatives supported by theindustry also seen as cutting the cost of product liabilitylitigation.

"Yesterday's election represented a great victory for proponentsof legal reform," said Julie Rochman, senior vice president, publicaffairs at the American Insurance Association.

"Clearly, our members have been strong advocates for legalreform at both the federal and state levels," she said. Besides thefact that Republicans picked up seats in the Senate, Ms. Rochmansaid, "several fair-minded supreme court judges were elected at thestate level, and on a series of ballot initiatives, the businesscommunity and pro-legal reform allies carried the day."

In the view of insurance organization advocates, the defeat ofSen. Tom Daschle, D-S.D., opened the potential for his replacementas minority leader by Sen. Chris Dodd, D-Conn., who has beenunabashed in his support of the insurance industry.

Not only is Sen. Dodd a proponent of class action reform, he hasbeen supportive throughout his congressional career of theinsurance industry and is regarded as a skilled political operativein the very clubby Senate, where personal relationships andseniority are critical.

His only substantive contender for the minority leader's post isSen. Harry Reid, Nev., currently Sen. Daschle's top assistant asminority whip.

The industry did lose one major supporter with the defeat ofRep. Phil Crane, R-Ill. According to several industry lobbyists,Rep. Crane has been an advocate for the industry during the 35years he served in the House. Rep. Crane is a ranking member of thepowerful Ways and Means Committee and chairman of its Subcommitteeon Trade. He was defeated by Democrat Melissa Bean.

David Winston, senior vice president for governmental affairs atthe National Association of Mutual Insurance Companies, viewed theelection as helping the industry in its effort to have theTerrorism Risk Insurance Act renewed.

"The election was pretty clear," Mr. Winston said. "Terrorismplayed a major role in the minds of voters," he said. "PresidentBush has continued to call this a war on terrorism. NAMIC believesterrorism is an uninsurable risk, and it is the government'sresponsibility to provide a financial backstop and not expose theindustry to financial ruin."

In a rundown of how specific issues should play out in the nextCongress, Peter Lefkin, senior vice president for government andexternal affairs for Allianz of America and the seniorproperty-casualty lobbyist in Washington, said that the opportunityfor securing class legislation has significantly improved.

"The Senate was very close to an agreement last year, and abipartisan consensus emerged in the Senate this year," heremarked.

Mr. Lefkin said that the "general perception is that the Senatewas one or two votes short of overcoming a filibuster andsupporters now have those extra two votes" [through election offive Republicans in the South Tuesday].

In addition, Mr. Lefkin said, "should Sen. Dodd ascend tominority leader, that would portend positive news for proponents ofclass action reform. Sen. Dodd was frustrated by the inability toget a bipartisan consensus, and he would commit himself to makingsure that class action reform happens this year."

Mr. Lefkin added that it is "difficult to measure whether hewill win. Both Sens. Dodd and Reid have both been making phonecalls in anticipation of a loss by Sen. Daschle."

Regarding asbestos abatement legislation, Mr. Lefkin said thatis going to be harder, a harder push than class action reform."

He explained that "Sen. Specter has always been supportive, butthe problem is that it will be a politically charged issue. With alikely number of Supreme Court retirees, the Senate JudiciaryCommittee will have a full plate."

Mr. Lefkin added that regarding extension of TRIA, which expiresat the end of 2005, "the hard part is that the Congress is lessrelevant to what happens in TRIA than the activity of the BushAdministration, where no clear position has emerged. The BushAdministration was the driving impetus behind TRIA in 2002, and forit to be re-enacted, that will have to occur again."