?Long Shot' Asbestos Bill Goes To Senate

By Steven Brostoff, Washington Editor

NU Online News Service, April 8, 10:59 a.m. EDT?Senate Republican leaders are taking their final shot at legislation to reform asbestos litigation by introducing a revised bill aimed at addressing some organized labor concerns.[@@]

However, insurance groups said the legislation still needs work and that they will push for further improvements as the Senate debate, which is scheduled for April 19, approaches.

Senate Majority Leader Bill Frist, R-Tenn., said in a statement on the floor of the Senate that the revised legislation, S. 2290, provides more compensation to victims than the earlier bill, S. 1125; assures that a trust fund that will be created to compensate victims remains solvent; and streamlines administration.

He noted that several leading Democrats asked him to delay introduction of the bill because many issues remain unsettled.

However, Sen. Frist said he fears that additional delays will be of little or no help. But he encouraged all interested parties to continue their discussions.

"There will no doubt be constructive proposals from senators on both sides of the aisle to further refine and improve this bill," Sen. Frist said. "I encourage this process. It is my hope that the process will be useful and not result in further delays to resolving this crisis."

Julie Gackenbach, assistant vice president of government relations with the Des Plaines, Ill.-based Property Casualty Insurers Association of America, said that PCI is pleased that Sen. Frist held to the agreement with the insurance industry that the industry's contribution to the fund will be capped at $46 billion.

That, she said, was a "line in the sand" for the insurance industry.

However, she said, PCI is concerned over the allocation methodology in the legislation. The insurance industry, Ms. Gackenbach said, had hoped to reach an agreement on the methodology by which the industry's $46 billion contribution would be allocated among companies.

Obviously, she noted, that has not yet been achieved. The legislation, Ms. Gackenbach noted, creates a commission to allocate the industry's share, but there are concerns over the methodology the commission might employ.

She added that PCI is also examining the transaction costs in the system. The legislation, Ms. Gackenbach noted, is 237 pages long and PCI is still studying all the provisions.

Robert E. Vagley, president of the Washington-based American Insurance Association, praised the leadership for introducing the bill, but said AIA will continue to push for improvements.

"Several moving pieces have yet to settle into place and some vital improvements are needed," Mr. Vagley said.

Among the issues that need work, according to AIA, are the allocation formula and the amount of money that foreign reinsurers will contribute to the fund.

Under the legislation, a $114 billion trust fund would be established to settle asbestos-related claims out of court. Claimants would receive specified amounts of compensation for specified impairments, ranging from medical monitoring for asymptomatic exposure to more than $1 million for myesothelioma.

Sen. Frist said the new bill increases compensation for some disease categories over what was in S. 1125.

In addition, he said, the new bill has additional safeguards to assure the fund's solvency. For example, Sen. Frist said, the legislation now establishes a priority for obligations to the trust fund in state insurance receivership proceedings.

Despite the increase in some claims values, which was demanded by the AFL-CIO, labor unions are still criticizing the $114 billion funding as insufficient, according to published reports.

But one insurance industry representative, who asked not to be identified, said this does not necessarily mean the legislation is dead. Labor is trying to get as much money as possible, he said, but is still at the table and has not said anything to indicate that it is ready to walk away from the process.

While legislation is a long shot, he said, there is still a possibility.

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?Long Shot' Asbestos Bill Goes To Senate

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