Insurers, Defendants Balk At New Asbestos Bill In separate letters, key interest groups make it clear Specter plan is unacceptable
Washington
Sen. Arlen Specter, R-Pa., chairman of the Senate Judiciary Committee, has scheduled a Jan. 11 hearing on asbestos legislation as a first step in rapidly moving such legislation through his committee despite strong signs that defendants and insurers are dead set against the principles and substance of his bill.
Sen. Specter laid out his plans for prompt consideration of the bill, including a Jan. 10 meeting of interested parties, in a speech before an empty U.S. Senate floor on Jan. 4.
His office declined to give out a list of potential speakers at the hearing, although insurance industry officials believe the headliner will be Judge Edward Becker, former chief judge of the Third U.S. Circuit Court of Appeals, based in Philadelphia. Judge Becker is a longtime friend of Sen. Specter who has been seeking to facilitate a deal on asbestos legislation for more than a year at Sen. Specters behest.
The principles behind Sen. Specters bill as contained in discussion drafts circulated in late November and early December include creation of a trust fund in the range of $140 billion and an alternative claims handling system based on specific medical criteria. In earlier versions of the legislation, the insurance industry would have been expected to pay $46 billion over 27.5 years.
The insurance industry is balking, however, because:
Under the bill, the industrys payments would be accelerated.
A number of claims have been settled since the $46 billion figure was first proposed.
Under the plan eyed by Sen. Specter, the whole system would fold if claims are not paid within 300 days, reverting all claims to the court system.
For example, in a letter dated Dec. 21 but obtained by the National Underwriter on Jan. 5, the major property-casualty insurance groups told Judge Beckerwith copies to others in the Senate Republican leadershippoint blank that: "Based on our recent meetings with you and the other stakeholders, it appears that the discussion draft, as currently contemplated, is unlikely to meet" the industrys basic goals.
As such, the letter adds, "should legislative language based on this draft be introduced in the Senate, we could not support it. Such an outcome would be unfortunate, given our mutual desire to move asbestos legislation to the presidents desk next year."
In the latest development, several large industrial companiesincluding Exxon Mobil Corp., DuPont Company, Federal-Mogul Corp. and its official committee of unsecured creditors, Foster Wheeler Ltd. and three other firmssent a letter to Sen. Specter and other members of the committees leadership as well as Sen. Patrick Leahy, D-Vermont, ranking minority member of the Judiciary Committee, saying they had "significant concerns with the recent discussion draft."
Specifically, the letter said: "We believe that the current draft would not equitably resolve the asbestos litigation crisis."
Sen. Specters office would not comment further on the situation, other than the fact that, at presstime, the planned hearing was still on.
Reproduced from National Underwriter Edition, January 6, 2005. Copyright 2005 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.
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