Insurers Quail At Specter Rapid Asbestos Vote Plan

During the session, that ended shortly before 5 p.m. Monday, he was accompanied by Judge Edward Becker, former chief of the 3^rd U.S. Circuit Court of Appeals in Philadelphia, who has sought at the request of Sen. Specter to facilitate passage of the legislation over the past year.

Four industry trade groups gave the senator a 2 ?-page letter outlining substantive problems they have with a draft asbestos bill he presented last week, but he was undeterred in outlining an aggressive schedule to pass the measure.

Under the senator's timetable, he will introduce his bill Jan. 4, hold hearings in the committee the following week, move the bill through his committee in another week, and have it ready to put on the Senate floor by the week of Jan. 29.

Informed of the chairman's plans, Chris Winans, a senior industry analyst at Lehman Bros., was taken aback. "That doesn't sound like a realistic schedule, given that few of the industry's concerns brought up over 18 months of negotiations have been resolved," he said.

Mr. Winans cited among the concerns the fact that the core of the bill remains a trust fund that few companies and trade groups within the industry support, and the fact that industry contributions remain open-ended. This would mean that even though the industry is mandated to contribute $46 billion over 27.5 years to the trust fund, it doesn't buy them indemnity from future claims.

Moreover, under a provision of the bill that is of greatest concern, the draft bill unveiled by Sen. Specter calls for all claims to revert to the tort system if the trust fund runs out of money and can't pay any legitimate claims within 300 days of submission.

The senator's aides declined repeated requests for comment on the meeting yesterday evening. However, Julie Rochman, senior vice president for public affairs at the American Insurance Association, confirmed the senator's plans.

"We have communicated directly with Sen. Specter and, while his expressed timeline is ambitious, agree with the incoming Judiciary chairman that time is of the essence when it comes to asbestos litigation reform." She added, "The crisis in our court system is very real, and only Congress can solve the problem.

"We look forward to working with Sen. Specter, Majority Leader Frist, R-Tenn., the new Minority Leader, Sen. Harry Reid, D-Nev., and others to develop workable legislation that provides a meaningful fix to the out-of-control asbestos litigation system," Ms. Rochman added.

The industry letter to Sen. Specter was signed by representatives of the AIA, the Property Casualty Insurers Association of America; the Reinsurance Association of America; and the National Association of Mutual Insurance Companies.

Two of the concerns voiced in the letter, according to several sources, were about "finality and exclusivity." The draft legislation presented to the stakeholders by Sen. Specter and Judge Becker contains language, the letter said, that allows some asbestos cases to still be brought within the tort system.

That so-called "leakage" from the trust fund "undermines exclusivity and finality for the fund participants," the letter said.

Another concern, the letter said, is that the accelerated payment system for insurers under the latest draft speeds up the timeline for insurers' contributions to the trust fund and at the same time would have claims revert back to the tort system if no payments are made within 300 days. Language in an earlier version barred such reversion for seven years.

The stakeholders who met with Specter in the separate sessions included representatives of industry, organized labor and the plaintiff's bar, one source said.