Specter Says: Reply To Asbestos Plan By Monday

The senator asked interested parties, including insurers, representatives of industry and organized labor, to tell him by Monday whether the draft constituted enough progress to restart talks aimed at reporting out a bill from the committee possibly by next June.

A copy of the draft legislation obtained by The National Underwriter shows revisions to language suggested by senators William Frist, R-Tenn., majority leader, and Tom Daschle, D-S.D., retiring minority leader, to be relatively minor. In fact, the changes appear to be aimed at bringing aboard both conservative and liberal members of the committee.

But the insurance industry remains privately opposed, according to lobbyists for several insurers and trade groups involved in the talks. One concern is the trust fund concept that is the core of the legislation.

A key part of the legislation is missing, however. That is the size of the trust fund that will be created under the legislation to pay asbestos claims over the 27.5 year life of the fund.

Amongst the revisions proposed by Sen. Specter are changes in attorneys' fees that would be paid for representing claimants.

The revisions also are more specific in dealing with prompt handling of claims. The whole program will be shelved and all claims would revert to the tort system if the whole system isn't up and running within 120 days. Moreover, everything returns to the tort system if the administrator certifies he can't pay approved claims within 300 days.

Insurance industry representatives say the carriers have difficulty with the trust fund that is the core of the legislation, and also have problems with the proposed acceleration of industry payments into the system demanded by organized labor and supported in principle by Sens. Frist and Daschle, who formerly were negotiating on the measure.

The industry had agreed to contribute $46 billion over 27.5 years, which is the life of the proposed trust fund that is the heart of current legislative proposals. The draft legislation proposed by Sen. Specter does not seek to change that.

At the meeting, Sen. Specter was flanked by Judge Edward Becker, former chief judge of the Third Circuit U.S. Court of Appeals, who during his active tenure on the Court dealt with several asbestos cases.

Julie Rochman, senior vice president of public affairs at the American Insurance Association, confirmed that several AIA officials attended the meeting. "We were in the room," Ms. Rochman said. "In fact, every stakeholder group was represented."

Ms. Rochman said a proposal was distributed and "everyone was asked to respond by Dec. 6."

But, she said, "There were some large elements left to be filled in?for example, the total dollar amount of the fund."

Ms. Rochman said that the last proposal offered by Sen. Frist suggested a trust fund of $145 billion, while Sen. Daschle's last proposal was $141 billion.

Ms. Rochman noted that the last offer by Sen. Daschle was "unacceptable to organized labor," adding that "organized labor had always been the ones who hold the keys to unlocking the trust fund."

Ms. Rochman confirmed that there was language in the draft regarding acceleration of insurance industry payments into the fund, but would not comment beyond saying, "The timing of the payments is very important to the insurance industry."

She said that the AIA will analyze "Sen. Specter's proposal, take it about to our members, and then respond," confirming that the senator's "preferred timetable" for a response is Monday.