New Coalition Moves To Block Asbestos Bill

Washington Bureau Chief

Action on a Senate bill to create a trust fund for people with asbestos injuries was delayed last week after a new coalition of insurers and large defendants voiced strong opposition to the bill.

One senior industry lobbyist went so far as to declare asbestos legislation effectively dead in this Congress after Sen. Arlen Specter, R-Pa., chair of the Senate Judiciary Committee, confirmed early last week that Senate Majority Leader William Frist, R-Tenn., asked him to delay introduction of his bill. Instead, Sen. Specter placed a 291-page discussion draft of the bill in the Congressional Record.

The bill calls for funding of a $140 billion trust fund to pay off asbestos claims. Under the bill, insurers would pay $46 billion over 27.5 years.

The new group calls itself the Coalition for Asbestos Reform. On Jan. 28, coalition insurance industry members, including American International Group, The Chubb Corporation, American Re-Insurance, Swiss Reinsurance America Corporation, General Re Corporation, SAFECO and Zurich Financial Services, sent a letter to Sens. Frist, Specter, Leahy and Harry Reid, D-Nev., minority leader, voicing their opposition to the bill and attaching an earlier letter (dated Jan. 3) signed by the other coalition members, including asbestos defendants DuPont, Exxon Mobil and Federal Mogul Corp.

“The latest discussion draft of thelegislationraises serious concerns, such that we cannot support this legislation as proposed,” the coalition said in the Jan. 28 letter. “Accordingly, we believe that the time has come for the consideration of other creative solutions to the asbestos crisis, such as federal legislation adopting meaningful medical criteria,” the letter continued.

Commenting on last weeks Senate action, an insurance industry lobbyist who has been involved in asbestos legislation talks for several years said “Asbestos legislation in this Congress is dead,” requesting that his identity not be disclosed due to company policy.

Explaining his prediction, the lobbyist said that creating a trust fund has been at the heart of proposed legislation for two years. “Medical criteria bills will be introduced in both the House and Senate, and the House may be able to pass such legislation. But, if you look at the Democrats in the Senate who are essential to passage of asbestos legislation such as Sens. Chris Dodd, Conn.; Ben Nelson, Neb.; Tom Carper, Del.; Dianne Feinstein, Calif. all have embraced the trust fund concept. There is little latitude for them to back off now.”

“Had the trust fund concept not been circulated and gained traction, there was a 30-to-40 percent chance of getting medical criteria legislation passed in the Senate this Congress,” he said.

Another industry lobbyist who asked not to be named out of concern that his comments could damage his dealings with the Judiciary Committee said the coalition's main objective was to kill the trust fund provision in the bill. “Sen. Specter has hitched his wagon to a falling star,” he said.

At the same time, another industry lobbyist with long-term experience on the issue urged support for Senator Specter as he works his way through the issues.

“I am aware of this new coalition effort,” said Maria Berthoud, a principal and vice president at B&D Sagamore in Washington. “There are many companies who think that the trust fund approach will not work, nor gain the necessary political support to pass both chambers of Congress.”

“However, I believe Sen. Specter has been a strong leader for the interested parties for a long time and that he deserves our support as he continues to try and find a middle-ground solution to the very important asbestos issue.”

Ms. Berthoud concluded that “if the affected parties have decided that a trust fund will not work, I guess we have to let the legislative process work itself out.”

In comments to reporters, Sen. Frist said he wanted to give members more time to review the bill before it is formally introduced. Sen. Frist added that allowing Sen. Specter to circulate his discussion draft more widely will allow rank-and-file members to review the legislation.

But another industry official agreed that opposition to the proposal from the new coalition, and Sen. Specter's insistence on a broad compromise that includes a trust fund paid into by insurers, increases the likelihood that the bill is dead in its present form despite Sen. Specter's insistence that his bill be the basis of committee action.

“Forging a compromise with Sen. Patrick Leahy, D-Vermont, ranking minority member of the committee, that got farther and farther away from what the industry would accept is what doomed the bill,” the source said.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, February 11, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

Special Reports /

New Coalition Moves To Block Asbestos Bill

Related Stories

Recommended For You