In particular, the Committee last night approved an amendment that would increase the upfront costs of the insurance industry and business groups by $7 billion each.

Moreover, the legislation still contains a so-called "contingent" funding mechanism that the insurance industry argues could subject insurance companies to "blank check" liability.

At the same time, labor unions say they oppose the legislation because they believe claims values for the different asbestos-related medical conditions are too low.

Anne Sittmann, a representative of the Des Plaines, Ill.-based National Association of Independent Insurers, said that the current legislation is not something that NAII can support.

At every step of the way, she said, the costs of the legislation kept increasing. Moreover, Ms. Sittmann said, it does not meet the basic objectives of certainty and finality.

Gary Karr, a representative of the Washington-based American Insurance Association, said AIA opposes the legislation as it stands now. The legislation, he said, is too expensive.

He added that it was unfair for the Committee to add $7 billion in costs to insurance companies while failing to address the industry's concerns over the contingency funding.

While AIA hopes the legislation can be improved on the Senate floor, Mr. Karr said, the association has no choice but to oppose it in its present form.

David Farmer, senior vice president of federal affairs for the Downers Grove, Ill.-based Alliance of American Insurers, added the Alliance is now trying to add up all the costs of the amendments. His expectation, he said, is that most of the business community will join the insurance industry in opposing the legislation in its current form.

Mr. Farmer said that he believes the business community will reach the conclusion that the benefits of the legislation are not worth the costs.

Monte Ward, vice president of government affairs for the Indianapolis-based National Association of Mutual Insurance Companies, added that one of the main goals of the asbestos reform effort was to achieve finality and certainty in asbestos, which the bill as currently written does not do.

"What is the point of trading one broken system for another," Mr. Ward said.

The current proposal, he said, could become a never-ending trust fund.

S. 1125, as originally drafted, would have created a $108 billion trust fund, with $45 billion coming from the insurance industry, to resolve asbestos-related claims outside the tort system.

The legislation would have established medical criteria for filing an asbestos-related claim and compensated victims based on a specified schedule for different types of conditions, called claims values.

However, as the Senate Judiciary Committee began working on developing a consensus proposal, the costs of the legislation began to increase. First, the Committee eased some of the medical criteria to make it easier for those with mixed causation (for example, those with lung cancer who were exposed to asbestos but who were also smokers) to file claims.

Then, responding to concerns that the $108 billion fund might run out before all claimants were paid, the Committee adopted a highly controversial amendment creating contingency funding.

In addition to raising the size of the fund to as much as $153 billion, insurance companies would be hit with an annual extra assessment of $1 billion.

There would be no cap on the industry's potential liability.

S. 1125 now goes to the floor of the Senate, although it is doubtful that the legislation can advance without a compromise.

If it is approved by the Senate, the next step would be a House-Senate Conference Committee which would try to reconcile the Senate bill with legislation passed earlier by the House that simply establishes medical criteria for asbestos-related claims.

One industry representative, who asked not to be identified, said that supporters of asbestos litigation reform may try to get S. 1125 through the Senate in hopes that the problems with the legislation can be resolved in conference.

However, he noted, this can be a dangerous strategy as the conference might develop a consensus bill that is still unacceptable