Insurance industry trade groups have been quietly writing letters to senators and the Senate leadership making clear their opposition to the bill in its present form–focusing on the fact the legislation does not assure exclusivity in the claims process, leaving open the possibility of additional lawsuits seeking damages beyond those to be paid by the trust fund.

To derail the bill, insurers are also buttonholing senatorial friends and their staffers to persuade them to introduce amendments–which, if passed, will upset the delicate bipartisan balance that Sen. Specter and his chief ally on the committee, Sen. Patrick Leahy, D-Vt., created to get the proposal through the committee last May.

The Hartford, for example, has been shopping an amendment that would tighten considerably the medical criteria needed to qualify for a payment, as well as the standards used to judge the X-rays submitted as evidence of injury from exposure to asbestos in the workplace.

A New York federal grand jury is investigating abuses in interpreting such X-rays. The probe deals with cases where investigators believe people were illegally qualified to win claims from a trust fund being administered by a Texas court through sloppy or fraudulent interpretation of such X-rays by so-called “b-readers.”

The amendment is totally unacceptable to organized labor, whose support is seen as crucial to the bill, as well as the trial lawyers, another key constituency working to kill the bill.

Moreover, most large defendants–such as General Electric, DuPont and ExxonMobil–are also working to bottle up the bill. A critical reason they oppose the legislation as written is that it could force them to open their books to outside auditors empowered to determine how much they should contribute to the $140 billion trust fund that would be used to pay claims.

The major problem with the bill for insurers and defendants is that to win Sen. Leahy's support, Sen. Specter had to include language that allows “leakage”–that is, the ability of plaintiffs to have their claims revert to the courts and therefore be paid outside the trust fund if there is no money to pay their claim within nine months.

Moreover, all claims would revert to the tort system after the program expires in 27.5 years.

All property-casualty insurance trade groups have already sent letters to the Senate leadership, or are drafting such letters, pointing out what provisions will make them oppose the bill if left unchanged.

The insurance industry's position is best summed up by a letter sent by the American Insurance Association, dated Jan. 20, to Sen. Frist, an unabashed supporter of the Specter/Leahy bill.

According to a consensus of congressional staffers and industry lobbyists, this letter marks the first time insurers have said the asbestos bill is worse than the current system.

Specifically, the letter says: “To provide certainty and finality, the bill must provide the exclusive administrative remedy for resolution of asbestos-related claims. Absent inclusion of all such claims in the fund or a credit for claims left in the litigation system, there can be no real finality for insurers.”

The letter is signed by Marc Racicot, new president of the AIA and a former chairman of the Republican National Committee.

“Our industry would inevitably find itself paying both substantial sums to the fund and additional large sums to the tort system for claims permitted to 'leak' outside the fund,” the letter continues. “This would present insurers with an even more untenable, expensive situation than that posed by the current, highly dysfunctional litigation system.”