David Farmer, senior vice president of federal affairs for the Downers Grove, Ill.-based Alliance of American Insurers, said that various industry leaders got together to discuss the issue of asbestos litigation and all agreed that reform is necessary.

All agreed, he added, that reform is in the best interest of insurers, manufacturers and the AFL-CIO.

Gary Karr, a representative of the Washington-based American Insurance Association, said all insurance companies and trade associations are united in their opposition to S. 1125.

"We are doing everything we can to keep the bill from coming to the floor," he said.

At the executive meeting, Mr. Karr said, there was discussion of possible solutions to the problem and divergent views were expressed.

But everyone agreed, he noted, that the three key constituents of insurers, manufacturers and labor must be together if any legislation is to advance.

Other sources who asked not to be identified said that one group of insurers began to outline a proposal that would be based on the trust fund concept of S. 1125.

The sources said that the outline was not a fully developed proposal, but would apparently have the industry contribute some $52 billion to an asbestos resolution trust fund, up from the $45 billion that was originally part of S. 1125.

However, sources said, it would plug the holes in S. 1125 that allow plaintiffs to pursue their claims through litigation and create a new set of interest rate and tax assumptions regarding any supplemental payments that would presumably make the system affordable.

Essentially, one source said, some in the industry wanted to make one more effort to get a workable bill at a reasonable cost before abandoning the trust fund concept.

However, sources emphasized, the new proposal was not fully formed and there was a lot of skepticism expressed during the meeting that any trust fund proposal could be made affordable.

One source said there was an agreement that the industry needed to talk directly with the AFL-CIO to determine what it was willing to accept regarding payments for different asbestos-related conditions.

(While the insurance industry has criticized S. 1125 as too expensive, the AFL-CIO has argued that its compensations schedule is too low.)

In addition, sources said, the belief was that manufacturers had to accept a larger share of the funding burden.

Some industry leaders, sources said, advocated abandoning the trust fund concept and supporting legislation such as S. 413, which would establish medical criteria for asbestos claims and enact some tort reform measures.

One source said that there is a great deal of skepticism that anything can get done in the short term. It was noted during the meeting, this source said, that there are only 16 legislative days left in this session of Congress.

Many executives believe it is hard to see how an agreement can be worked out in that time, the source said.

But while the industry affirmed its opposition to S. 1125 as written, the source said, nobody wanted to abandon the effort.

S. 1125 would establish a trust fund to resolve asbestos-related claims out of court. Initially, the size of the trust fund was $108 billion, with insurers responsible for about $45 billion.

However, the legislation was amended to the point that the trust fund reached $153 million, and the insurance industry's funding share increased by $25 billion.

Moreover, insurance companies would face potentially unlimited additional liability should the fund run out of money before all claimants are compensation.

Another complaint raised by the industry over S. 1125 is that the trust fund is not the exclusive remedy for asbestos claims.

Amendments added to the legislation during the Senate Judiciary Committee's consideration would still allow claimants to file lawsuits against manufacturers.