Fund Seen As Remedy To Asbestos Claim Pileup

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By Steven Brostoff, Washington Editor

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NU Online News Service, May 21, 2:05 p.m. EDT,Washington?A new proposal to create an asbestos claimsresolution fund may be the first step toward resolving thelitigation morass surrounding asbestos, industry representativessay.

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The proposal, which was introduced in draft form by SenateJudiciary Committee Chairman Orrin Hatch, R-Utah, would create a$90 billion fund to settle asbestos related claims, with one halfof the total coming from insurance companies.

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Claimants who demonstrate asbestos-related illnesses wouldreceive between $40,000 and $750,000 in compensation, with thehighest amount awarded to those with mesothelioma, a fatalasbestos-related form of cancer.

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Insurance industry contributions to the fund would be determinedby an Asbestos Insurers Commission, which would assess insurersbased on criteria specified in the legislation.

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Participation in the fund would be mandatory for all insurancecompanies that have paid at least $1 million in asbestos-relateddefense and indemnity costs.

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Sen. Hatch released a draft of his proposal, a formal bill wasexpected after NU Online News' publication deadline.

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It is possible that the formal bill will differ somewhat fromthe draft, but the basic structure of Sen. Hatch's proposal wasseen as likely to remain intact.

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Industry groups that have been pursuing asbestos litigationreform are praising Sen. Hatch for advancing the process.

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The proposal has the potential to do what the American InsuranceAssociation believes needs to be done, said Gary Karr, arepresentative of the Washington-based AIA.

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That is, he said, to bring fairness and certainty to a systemthat is out of control.

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Carl Parks, senior vice president of government relations withthe Des Plaines, Ill.-based National Association of IndependentInsurers, said that NAII supports reform legislation, adding thatany final bill should include provisions such as medical criteriathat would bring some control to asbestos litigation.

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Mr. Parks added that any bill should also contain provisionsprotecting defendants who have been dragged into asbestoslitigation simply because they once sold or installed productscontaining asbestos.

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"Asbestos litigation reform is about conserving scarce resourcesto care for people who have become ill from asbestos exposure andit's also about protecting businesses and preserving jobs," hesaid.

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Michael Baroody, chairman of the Asbestos Alliance, a coalitionof business groups that includes the Downers Grove, Ill.-basedAlliance of American Insurers, also praised the draft and calledfor legislation to be enacted this year.

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The current asbestos litigation "scandal," he said, is not onlydragging down the economy, it is hurting the people it should behelping, asbestos victims.

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"Now more than ever, Congress must step in and legislate asolution," Mr. Baroody said.

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For Mr. Brostoff''s full report on Sen. Hatch's proposalread the May 26 print edition of National Underwriter.

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