Asbestos Bill Chances Look Dim: Execs

By Susanne Sclafane

NU Online News Service, June 3, 11:20 a.m. EDT, New York?The chances of an asbestos reform bill passing, like the type proposed last week by Sen. Orrin Hatch, R-Utah, are no more than one in four, according to a property-casualty insurance company executive.

Ramani Ayer, chairman and chief executive officer for The Hartford Financial Services Group, assigned that probability yesterday at the Standard & Poor's annual insurance conference here.

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

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

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

"We can hope. We can work at it," he said, referring to the issue of asbestos reform generally. "The process in Washington is very, very murky. You take two steps forward and one step backward," he said, noting that he is more optimistic about class action reform than asbestos reform.

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

Under the current model, insurers would contribute $45 million into a fund, Mr. Ayer said, noting that insurance industry reserves held for asbestos currently amount to $28 billion. "The insurance industry is going to be stretching to meet the obligations of the fund," he said, noting that there would be a 60 percent appreciation needed to get to the $45 billion level.

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

In the aggregate, he said, 50 cents of every claim dollar goes to litigation costs, with 30 cents going to plaintiffs' lawyers and 20 cents to defense attorneys.

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

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Asbestos Bill Chances Look Dim: Execs

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