Insurers Press Senate For Litigation Reform

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By Matt Brady

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NU Online News Service, Jan. 19, 4:12 p.m. EST,Washington?Insurance and other financial services industryleaders have called on Senate Majority Leader Bill Frist, R-Tenn.,to pass class action reform legislation early next month.[@@]

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"Class action reforms will end abuses of the class actionsystem, increase the rights of class members and lower the cost ofdoing business in America and will lead to new job creation," theysaid last week.

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Their message was conveyed in a short letter addressed to Sen.Frist by the Financial Services Roundtable, a consortium ofcompanies and trade associations representing the spectrum offinancial industries.

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Among those signing the letter were AEGON USA president and CEOPatrick Baird, Chubb Corp. Chairman and CEO John Finnegan,Frederick Geissinger, chairman and CEO of AIG's American GeneralFinancial Services, MassMutual Chairman and CEO Robert O'Connelland Edward Rust, chairman and CEO of State Farm InsuranceCompanies.

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The class action reform bill was crafted to ensure whatsupporters claim will be a greater degree of fairness in the civillitigation system.

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Under the legislation, the majority of class actions would bemoved to the federal court system to prevent attorneys from pickingjurisdictions to file their claims in that have a reputation asplaintiff friendly. Additionally, the letter noted, class memberswould also be given new rights, such as the right to receive caseinformation in plain English rather than legal language.

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"We urge you to act in February to bring up and pass classaction reforms and end abuse of large, multi-state class actionlawsuits, increase the rights of class members, and help strengthenthe job market," the letter said.

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The Republican controlled House has already approved the bill,but the measure has failed several times to win passage in the moreevenly divided Senate.

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On one occasion, Republican supporters were forced to shelve thebill after coming up one vote short of the 60 needed to obtainSenate cloture, which would have limited debate on the bill andeffectively removed the threat of a filibuster.

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Afterwards, several Democrats, including Sens. Mary Landrieu,D-La., and Charles Schumer, D-N.Y., came forward with offers tobecome the 60th vote if some of their concerns could beaddressed.

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Discussions continued after that, with several changes beingmade to the bill. Those revisions and the reelection of PresidentBush, a strong advocate of litigation reform, have increasedexpectations that the bill will receive Senate approval.

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