Insurers In Tentative Asbestos Bill Compromise

This is an increase from the $45 billion figure which originally was proposed and which the industry said represented the upper limit of what it could afford.

In exchange for the increase, the industry would not be subject to any back-end liability should the trust fund run out of money before all claims are paid.

However, Ms. Sittmann stressed, the industry's acceptance of the $46.025 billion figure is still subject to all the terms and conditions of the joint industry position that was outlined in an Oct. 7 letter to Sen. Frist.

The terms and conditions include creating a fund that is the exclusive remedy for all asbestos-related claims, preventing claimants from pursuing their claims in the tort system, establishing an equitable funding allocation methodology reflecting actual liability for asbestos-related claims, holding foreign entities accountable for their obligations on the same basis as U.S. insurers and placing limits on attorneys' fees and transaction costs.

Sen. Frist is attempting to resolve an impasse surrounding S. 1125, an asbestos litigation reform bill that was approved by the Senate Judiciary Committee but which has drawn criticism on several fronts.

Under S. 1125 as approved by the Committee, the industry could be liable for some $75 billion in front-end costs to an asbestos claims resolution fund and potentially unlimited back-end liability should the fund run out of money before all claims are paid.

In addition, S. 1125 would allow some plaintiffs to pursue their claims in the tort system.

The entire industry opposes S. 1125 as approved by the Committee and developed a joint position stating that the industry could not accept any asbestos legislation that did not assure certainty, finality and affordability based on the earlier mentioned factors.

Meanwhile, labor unions have criticized S. 1125, arguing that the amounts that would be paid to claimants based on the severity of their illnesses are insufficient.