At least 500,000 more asbestos injury claims are expected in coming decades even as resources to compensate victims dwindle, with asbestos lawsuits having already forced 78 firms into bankruptcy, an actuary group reported.

The analysis came from the American Academy of Actuaries' Mass Torts Subcommittee in Washington.

According to their report, "Current Issues in Asbestos Litigation," despite the huge costs, the asbestos litigation system has been inefficient, with only 41 percent of total spending reaching claimants.

Through Dec. 31, 2004, according to the academy's figures, the U.S. insurance industry has paid approximately $31.8 billion in asbestos losses and expenses, net of reinsurance.

U.S. insurers and reinsurers hold $22.7 billion in net reserves to pay pending and anticipated future claims over the next several decades, according to the report.

The academy cited research showing that defense costs against asbestos claims may increase. It said more defendants are now involved and many defendants have abandoned settlement strategies, while coverage disputes with insurers as well as between insurers and reinsurers may increase.

It said also that newer defendants are having to make costly expenditures to do research into the amount of their exposure and potential defenses.

The study said there are concerns that the sickest individuals might not be compensated adequately or promptly, and the majority of claimants in recent years have not shown signs of impairment, which has led to stricter medical criteria for bringing a claim in some forums.

While Congress has been debating the issue during the past few years, several state and local jurisdictions have implemented their own reforms.

"Stricter medical criteria, combined with heightened scrutiny of potentially fraudulent claims, might lead to fewer mass settlements of pending claim inventories and will likely affect whether and how mass screening activities are conducted in the future," said Jenni Biggs, chair of the subcommittee.

Projections of future asbestos costs are uncertain because historical data is incomplete, the litigation environment is changing, and asbestos diseases will emerge over the next several decades, the report noted.

"Claims for malignant diseases are estimable based on the population exposed, timing of exposure and disease latency. However, estimating the number of claims for nonmalignant diseases is much more difficult because of the complexity of the asbestos litigation environment," according to Ms. Biggs. "Nonetheless, informed and objective analysis can provide meaningful support to the public policy debate."

The report is online at www.actuary.org.

Special Reports /

500,000 More Asbestos Claims Expected

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