Trade Groups Oppose Senate Asbestos Bill Wording
By Steven Brostoff, Washington Editor
NU Online News Service, Sept. 26, 12:14 p.m. EDT, Washington?Four major trade associations say they cannot support asbestos litigation reform legislation currently pending in the Senate unless substantial changes are made.
In a letter to Senate Majority Leader Bill Frist, R-Tenn., the presidents of the National Association of Independent Insurers, the Alliance of American Insurers, the National Association of Mutual Insurance Companies, and the Reinsurance Association of America say that the legislation, S. 1125, does not represent effective, equitable and efficient reform.
"Throughout the process, the insurance industry has negotiated in good faith and was prepared to make a significant compromise in the form of the base text," the letter says.
"However, actions by the Senate Judiciary Committee make the legislation inequitable, unaffordable and unworkable from the standpoint of insurers," the letter adds.
The letter is signed by Jack Ramirez, president of the Des Plaines, Ill.-based NAII; Larry Forrester, president of the Indianapolis-based NAMIC; Frank Nutter, president of the Washington-based RAA; and Rodger Lawson, president of the Downers Grove, Ill.-based Alliance.
They say that any asbestos legislation must cap insurer contributions to an asbestos claims resolution fund at $45 billion over the life of the program.
In addition, the associations say, the fund must be the exclusive remedy for all asbestos-related claims.
Any back-end funding liability, they add, aimed at assuring that the trust fund does not run out of money before all claims are paid, must not fall on the shoulders of the insurance industry.
Allocation of the insurance industry's funding share among individual companies must reflect exposure to and liability for actual asbestos-related claims, the letter says.
The letter comes in the midst of an intra-industry dispute over whether S. 1125 can be reworked in a way to make it acceptable to the insurance industry, manufacturers and labor (see NU, Sept. 22, 2003).
Moreover, in a recent letter to trade association leaders, three top industry executives said they were concerned that the insurance companies that want to salvage S. 1125 may create the impression that the rest of the industry agrees with that view.
That letter was signed by Maurice R. Greenberg, chairman of New York-based AIG; John Degnan, vice chairman of Warren, N.J.-based Chubb; and Joseph Brandon, chairman of Stamford, Conn.-based General Reinsurance.
As originally drafted, S. 1125 would have established a $108 billion trust fund to resolve asbestos-related claims, with $45 billion coming from the insurance industry.
However, following Senate Judiciary Committee consideration of the legislation, the insurance industry's share of funding was increased to some $75 billion, with the possibility of unlimited contingent liability.
In addition, the bill as amended by the Committee would still allow some claimants to pursue their claims in court.
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