“That is their right, and I know we will hear all sorts of parades of horribles on anything we do,” he added. “I hope their efforts will not succeed and we do what is best for the country.”

Sen. Hatch specifically addressed labor unions and challenged them to support his legislation. Already, he said, unions have members who are very sick, but who are being shortchanged in the tort system due to the flood of claims and dwindling resources.

“What will your membership say if that is allowed to continue?” he asked.

As for businesses, Sen. Hatch asked how many will still be around in the next few years if the asbestos problem is not resolved. More than 60 companies have gone bankrupt, he noted, nearly a quarter of which occurred in just the last two years.

Insurance companies, Sen. Hatch added, should have the same concerns as businesses.

But Sen. Patrick Leahy, D-Vt., the ranking Democrat on the Committee, said he could not support S. 1125. The legislation, he said, shifts the financial risk from defendants and insurers to victims, he said, guaranteeing businesses a lifetime of absolute legal and financial certainty.

However, he said, asbestos victims will be completely out of luck if the compensation trust fund runs out of money.

Moreover, Sen. Leahy said, the legislation raises unnecessary hurdles that would bar many legitimate asbestos victims from receiving compensation. For example, he said, the legislation provides no compensation for those exposed after Dec. 31, 1982, which he said is an arbitrary cutoff.

He called for further negotiations on these issues.

“Working together, we stand the best chance of success,” Sen. Leahy said.

S. 1125 would establish a $108 billion trust fund to pay asbestos claims based on specified medical criteria. Those suffering from mesothelioma, a terminal asbestos-related cancer, would receive the maximum amount of $750,000.

Those with a condition known as “pleural thickening” would receive no direct compensation, but would qualify for reimbursement for medical monitoring.

Insurance companies would contribute $45 billion to the fund, with specific amounts determined by an Asbestos Insurers Commission.

However, there is a dispute over whether the $108 billion fund would be sufficient to compensate all potential claimants.

Jennifer L. Biggs, a consulting actuary in the St. Louis office of Tillinghast-Towers Perrin, said she believes $108 billion will be enough.

She noted that in May of 2001, Tillinghast estimated that asbestos-related losses could reach $200 billion, a figure which has been widely quoted.

However, Ms. Biggs said, the proposed legislation changes the underlying assumptions that produced the $200 billion estimate.

Based on new underlying assumptions, she said, the $108 billion figure appears to be “more than adequate” even if future awards are indexed to reflect a 2.5 percent increase per year.

The new estimate is based on several factors, Ms. Biggs said. First, she noted, S. 1125 establishes medical criteria for recovery and specified claim awards.

In addition, she said, S. 1125 reduces awards by amounts already received by claimants from other sources.

As for the earlier $200 billion estimate, Ms. Biggs noted it was based on, among other things, “frictional” costs such as attorneys expenses. These costs, she said, took up more than half of the earlier estimate.

But Mark A. Peterson, president of Legal Analysis Systems in Thousand Oaks, Calif., argued that total compensation under the proposal would almost certainly exceed the $108 billion funding level.

He noted that the legislation does not adjust the payment schedule for inflation.

Without inflation adjustment, Mr. Peterson said, a future claimant would receive 22 percent less than a current claimant if the disease arises 10 years in the future, and 39 percent less if the disease arises 20 years in the future.

He said his analysis does adjust for inflation on the principle that all claimants receive the same real value of compensation.

Under any of several sets of assumptions, he said, it is clear that the total amount of money needed to compensate asbestos victims would exceed $108 billion. Indeed, Mr. Peterson said, it is possible that the fund would become insolvent as early as 2010.

“Because the proposed act has no provision for reserving money for future claimants, victims who suffer an asbestos disease and file claims as early as 2010 may expect to receive no compensation,” he said.

“Victims who had filed claims before them would have already consumed all of the money to be received by the fund,” Mr. Peterson said.

Separately, in New York, at the Standard & Poors annual insurance conference held earlier in the week, insurance company executives gauged the likelihood the asbestos reform would be enacted, suggesting that prospects were dim.

Ramani Ayer, chairman and chief ex-ecutive officer for The Hartford Financial Services Group, said the chances this year were no more than one-in-four, adding, however, that if asbestos reform is to happen, it will happen this year.

The odds of it happening next year are a lot lower than the 25 percent, he said. While there are disagreements among the various “parties at the table,” he said that Democratic and Republican leaders in Congress, as well as the administration, “are saying all the right things about wanting it to happen this year.”

Maurice Greenberg, chairman and CEO of American International Group, is more optimistic about class action reform than asbestos reform.

As for asbestos reform, “We can hope. We can work at it,” he said. “The process in Washington is very, very murky. You take two steps forward and one step backward,” he added.

(Additional reporting by Susanne Sclafane.)

Reproduced from National Underwriter Edition, June 9, 2003. Copyright 2003 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.