Fund Seen As Remedy To Asbestos Claim Pileup
By Steven Brostoff, Washington Editor
NU Online News Service, May 21, 2:05 p.m. EDT, Washington?A new proposal to create an asbestos claims resolution fund may be the first step toward resolving the litigation morass surrounding asbestos, industry representatives say.
The proposal, which was introduced in draft form by Senate Judiciary Committee Chairman Orrin Hatch, R-Utah, would create a $90 billion fund to settle asbestos related claims, with one half of the total coming from insurance companies.
Claimants who demonstrate asbestos-related illnesses would receive between $40,000 and $750,000 in compensation, with the highest amount awarded to those with mesothelioma, a fatal asbestos-related form of cancer.
Insurance industry contributions to the fund would be determined by an Asbestos Insurers Commission, which would assess insurers based on criteria specified in the legislation.
Participation in the fund would be mandatory for all insurance companies that have paid at least $1 million in asbestos-related defense and indemnity costs.
Sen. Hatch released a draft of his proposal, a formal bill was expected after NU Online News’ publication deadline.
It is possible that the formal bill will differ somewhat from the draft, but the basic structure of Sen. Hatch’s proposal was seen as likely to remain intact.
Industry groups that have been pursuing asbestos litigation reform are praising Sen. Hatch for advancing the process.
The proposal has the potential to do what the American Insurance Association believes needs to be done, said Gary Karr, a representative of the Washington-based AIA.
That is, he said, to bring fairness and certainty to a system that is out of control.
Carl Parks, senior vice president of government relations with the Des Plaines, Ill.-based National Association of Independent Insurers, said that NAII supports reform legislation, adding that any final bill should include provisions such as medical criteria that would bring some control to asbestos litigation.
Mr. Parks added that any bill should also contain provisions protecting defendants who have been dragged into asbestos litigation simply because they once sold or installed products containing asbestos.
“Asbestos litigation reform is about conserving scarce resources to care for people who have become ill from asbestos exposure and it’s also about protecting businesses and preserving jobs,” he said.
Michael Baroody, chairman of the Asbestos Alliance, a coalition of business groups that includes the Downers Grove, Ill.-based Alliance of American Insurers, also praised the draft and called for legislation to be enacted this year.
The current asbestos litigation “scandal,” he said, is not only dragging down the economy, it is hurting the people it should be helping, asbestos victims.
“Now more than ever, Congress must step in and legislate a solution,” Mr. Baroody said.
For Mr. Brostoff”s full report on Sen. Hatch’s proposal read the May 26 print edition of National Underwriter.