Insurers blast newest version for failing to provide exclusive claims remedy
Despite a strong vote by the U.S. Senate Judiciary Committee to release an asbestos claims fund bill, the measure appears unlikely to pass Congress this year.
In fact, industry lobbyists, analysts and members of Congress say the legislation most likely won’t even pass the full Senate, at least in its present form, given the opposition of most large insurers, who number among a long list of enemies lining up to kill the measure.
The Fairness in Asbestos Injury Resolution Act, S. 582, creates a privately funded, publicly administered trust fund to provide resources for an asbestos injury claims resolution program. The fund would total $140 billion, with the insurance industry responsible for $46 billion.
The bill passed the committee by a 13-5 vote, which Charlie Gates, an analyst at Credit Suisse First Boston, called “certainly a positive short-term signal for the bill.”
However, on a moderating note, Mr. Gates added, “three Republican senators
indicated that they would vote for it today
out of respect for Committee Chair [Arlen] Specter, R-Pa., but would oppose the bill in its current form on the Senate floor.”
He also noted that Sen. Jeff Sessions, R-Alabama, “who has generally been viewed as negative on the bill, was not present for the final vote but is believed to be in the same camp.”
“The combination of these factors means that the vote may not be as strong as it appears and that significant negotiations with Republicans need to take place,” according to Mr. Gates.
He added that until signs of more unified support are seen on the Republican side, “we do not believe it is fully ready for Senate floor time, and still think prospects are less
than 50 percent for ultimate enactment this year.”
That assessment echoes the view of the insurance industry. David Winston, senior vice president for federal affairs at the National Association of Mutual Insurance Companies–of which AIG, a strong political player, is a member–said the bill, while improved, fails to address all of NAMIC’s concerns. For example, he noted that it does not provide an exclusive remedy for all asbestos claims.
Leigh Ann Pusey, senior vice president for government affairs at the American Insurance Association, said the bill falls short and AIA cannot support it in its current form. AIA represents most of the large insurers who will wind up paying the bulk of the industry’s contribution to the trust fund.
Ms. Pusey also complained that the fund fails to provide an exclusive remedy for victims, as well as “equity, certainty and finality for all stakeholders, including insurers.”
The bill still leaves insurers “substantially exposed in the tort system, while simultaneously mandating that we pay tens of billions of dollars into the trust fund. That is wholly unacceptable,” said Ms. Pusey.
Before the final vote, Sen. Edward Kennedy, D-Mass., summed up the concerns of organized labor, consumers and trial lawyers about the legislations when he said that “the asbestos trust fund created by the bill is seriously underfunded, and the provisions of the bill will make it harder for many asbestos victims to recover the compensation that they deserve.”
“We do not believe [the bill] is fully ready for Senate floor time, and still think prospects are less than 50 percent for ultimate enactment this year.”
Charlie Gates, Analyst
Credit Suisse First Boston