Major insurance companies told members of the Senate last week they oppose legislation approved by a committee that would tap their revenues for the bulk of a $140 billion asbestos trust fund.
The bill was reported out by the Senate Judiciary Committee May 26 by a convincing 13-5 margin.
In outlining their objections, the group appeared to give implicit support for alternative legislation that would merely establish medical criteria for settling claims. That legislation was introduced in May, but only in the House.
The letter adds weight to the prediction by Joe Lieber of Washington Analysis that the asbestos fund bill has little chance to pass this Congress despite the support of the Senate Republican leadership and the Bush administration.
In a note to investors, Mr. Lieber said, “Chances are slim the bill will come to the Senate floor before September, and we contend that the odds of it getting to the floor at all this year are below 50 percent.”
“Prospects next year don't look any better,” Mr. Lieber added. “Even if the Senate were to pass a bill, the House will likely take a different approach to asbestos litigation–one that is not likely to be reconcilable with the Senate version. Therefore, we maintain our view that an asbestos litigation reform bill is unlikely to become law during the 109th Congress.”
The bill reported out by the Committee May 26 calls for creating a $140 billion trust fund that would pay those who claim they were injured through exposure to asbestos in the workplace through an alternative claims-handling system housed in the Labor Department.
The bill requires the insurance industry to pay more than $45 billion of the funds used to pay out claims over a 27.5-year period.
In their letter, the insurers told all members of the Senate, “It is important for us to make a clear and unambiguous statement regarding our opposition to S. 852.”
The letter added, “We must again reiterate our opposition to the bill as reported out of the Judiciary Committee and again ask the Senate to consider an alternative approach.
The insurer group includes members of a broadly-based Asbestos Study Group.
The Asbestos Study Group is a coalition of industrial company defendants and large property-casualty insurers working to have Congress enact legislation that provides a fair settlement of asbestos claims.
Those who signed the letter, sent to all members of the Senate, include Acuity, the Allstate Group of Companies, American International Group, American Re, Chubb, Erie Insurance, EMC Insurance Companies, General Re, The Hartford, Liberty Mutual, Nationwide, One Beacon, Royal & SunAlliance, Safeco, Swiss Re, Winterthur North America and Zurich.
“While we applaud the efforts of the Senate Judiciary Committee to address the asbestos litigation crisis, it is inaccurate to suggest that the insurance industry is supportive of the process and substance of S. 852,” the letter said. “We are not.”
The letter added, “It is also incorrect to assert that the insurance industry 'has agreed to pay' $46 billion into the proposed $140 billion trust fund. We have not.”
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