Prospects Poor For Asbestos, Tort Bills: Greenberg
By Susanne Sclafane
NU Online News Service, July 22, 3:36 p.m. EDT?American International Group's chairman, Maurice Greenberg, said today that despite insurance industry efforts there seems little hope Congress will pass legislation to establish an asbestos trust fund or reform class action litigation.[@@]
Asked about the prospects during an earnings conference call with investment analysts today, Mr. Greenberg said, "It is terribly disappointing that nongermane amendments became the hang-up," thus far preventing the appropriate number of votes for reform passage.
"Will it come back this year? We're working on it with others, [but] as we get closer to elections, I think it's going to be difficult to do given the agenda that they have in the Senate of things that have to get passed."
"I'm skeptical, but we're not giving up," he said.
Turning to the asbestos reform efforts, which an analyst said "don't want to die," Mr. Greenberg said the effort won't die "because nobody wants to take the blame for killing it," referring to union and political party leaders.
Noting that agreements have to be reached not just on the amount of money that needs to be in a proposed trust fund but on a variety of conditions, he said "there's no agreement whatever" on those conditions, such as the question of whether current claimants would be part of the fund and how it would be allocated. "They haven't even gotten to that."
Mr. Greenberg said that, in discussions concerning what the fund total should be, the insurance industry said, "We have $46 billion and there ain't any more."
Even the $46 billion number "is kind of a fictitious number," he said, noting the presence of non-U.S. reinsurers, a number of bankruptcies, and the fact that insurers with small amounts of exposure "aren't going to pick up someone else's dirty laundry."
Mr. Greenberg concluded, "The allocation of that becomes almost impossible."
"At some point?and I think it will be very soon?[lawmakers] will recognize that a trust fund idea was not the way to get this done."
"All you need is medical criteria to take care of those who are currently sick," as well as a centralized system that brings all cases under the single jurisdiction of a federal court and a way to control the legal costs with a workers' compensation-type schedule, Mr. Greenberg said.
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