Asbestos Bill Chances Look Dim: Execs

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By Susanne Sclafane

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NU Online News Service, June 3, 11:20 a.m. EDT, NewYork?The chances of an asbestos reform bill passing, likethe type proposed last week by Sen. Orrin Hatch, R-Utah, are nomore than one in four, according to a property-casualty insurancecompany executive.

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Ramani Ayer, chairman and chief executive officer for TheHartford Financial Services Group, assigned that probabilityyesterday at the Standard & Poor's annual insurance conferencehere.

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Maurice Greenberg, chairman and CEO of New York's AmericanInternational Group, said there are an "awful lot of moving parts"to the situation. "There are some things that should happen," hesaid, pointing to a single venue--a federal court--to deal withasbestos issues for those that have been "truly been exposed andmanifested illness."

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He said there should also be a cap on legal fees.

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But "whether or not a trust fund" that insurers andmanufacturers would contribute to will be set up "is hard to say,"Mr. Greenberg said.

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"We can hope. We can work at it," he said, referring to theissue of asbestos reform generally. "The process in Washington isvery, very murky. You take two steps forward and one stepbackward," he said, noting that he is more optimistic about classaction reform than asbestos reform.

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Mr. Ayer said that if asbestos reform is to happen, it willhappen this year. The odds of it happening next year are a lotlower than the 25 percent chance he assigns for this year, he said.While there are disagreements among the various "parties at thetable," he said that Democratic and Republican leaders in Congress,as well as the administration, "are saying all the right thingsabout wanting it to happen this year."

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Under the current model, insurers would contribute $45 millioninto a fund, Mr. Ayer said, noting that insurance industry reservesheld for asbestos currently amount to $28 billion. "The insuranceindustry is going to be stretching to meet the obligations of thefund," he said, noting that there would be a 60 percentappreciation needed to get to the $45 billion level.

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Still, he said, there is unanimity among all parties about theneed for reform.

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In the aggregate, he said, 50 cents of every claim dollar goesto litigation costs, with 30 cents going to plaintiffs' lawyers and20 cents to defense attorneys.

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"There's enormous waste in the system [and] it's a tax on theeconomy. This would really free up a lot of resources."

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