Major insurance companies told members of the Senate last weekthey oppose legislation approved by a committee that would taptheir revenues for the bulk of a $140 billion asbestos trustfund.

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The bill was reported out by the Senate Judiciary Committee May26 by a convincing 13-5 margin.

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In outlining their objections, the group appeared to giveimplicit support for alternative legislation that would merelyestablish medical criteria for settling claims. That legislationwas introduced in May, but only in the House.

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The letter adds weight to the prediction by Joe Lieber ofWashington Analysis that the asbestos fund bill has little chanceto pass this Congress despite the support of the Senate Republicanleadership and the Bush administration.

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In a note to investors, Mr. Lieber said, “Chances are slim thebill will come to the Senate floor before September, and we contendthat the odds of it getting to the floor at all this year are below50 percent.”

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“Prospects next year don't look any better,” Mr. Lieber added.“Even if the Senate were to pass a bill, the House will likely takea different approach to asbestos litigation–one that is not likelyto be reconcilable with the Senate version. Therefore, we maintainour view that an asbestos litigation reform bill is unlikely tobecome law during the 109th Congress.”

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The bill reported out by the Committee May 26 calls for creatinga $140 billion trust fund that would pay those who claim they wereinjured through exposure to asbestos in the workplace through analternative claims-handling system housed in the LaborDepartment.

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The bill requires the insurance industry to pay more than $45billion of the funds used to pay out claims over a 27.5-yearperiod.

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In their letter, the insurers told all members of the Senate,“It is important for us to make a clear and unambiguous statementregarding our opposition to S. 852.”

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The letter added, “We must again reiterate our opposition to thebill as reported out of the Judiciary Committee and again ask theSenate to consider an alternative approach.

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The insurer group includes members of a broadly-based AsbestosStudy Group.

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The Asbestos Study Group is a coalition of industrial companydefendants and large property-casualty insurers working to haveCongress enact legislation that provides a fair settlement ofasbestos claims.

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Those who signed the letter, sent to all members of the Senate,include Acuity, the Allstate Group of Companies, AmericanInternational Group, American Re, Chubb, Erie Insurance, EMCInsurance Companies, General Re, The Hartford, Liberty Mutual,Nationwide, One Beacon, Royal & SunAlliance, Safeco, Swiss Re,Winterthur North America and Zurich.

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“While we applaud the efforts of the Senate Judiciary Committeeto address the asbestos litigation crisis, it is inaccurate tosuggest that the insurance industry is supportive of the processand substance of S. 852,” the letter said. “We are not.”

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The letter added, “It is also incorrect to assert that theinsurance industry 'has agreed to pay' $46 billion into theproposed $140 billion trust fund. We have not.”

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