WASHINGTON -- An insurance group is threatening to pull its support from a Senate bill designed to reform the asbestos liability system.
The American Insurance Association, a Washington, D.C.-based group that represents property and casualty insurers, said in a July 3 letter that it " has serious concerns" about the bill and its impact on the insurance industry.
The letter was written to Senate Judiciary Chairman Orrin Hatch (R., Utah), author of a bill that would create a proposed $108-billion trust fund to pay workers sickened by asbestos exposure. The judiciary panel has spent more than two days considering the measure and is slated to continue its work next Thursday, after a congressional recess.
During committee deliberations, the panel adopted an amendment by Sens. Herb Kohl (D., Wis) and Dianne Feinstein (D., Calif.) that would require corporations and insurance companies to pay an additional $45 billion more if the $108 billion trust fund is exhausted during its 25-year cycle. Democrats and labor unions had complained the $108
billion trust fund wasn’t large enough.
Defendant companies and the insurance industry each would pay in $45 billion to the $108 billion fund, with the balance coming from a bankruptcy trust fund and other sources. The Feinstein and Kohl amendment could require insurers and defendant companies to pay a combined $45 billion extra if the fund depletes and legitimate health
claims remain unpaid.
AIA said it can’t pay any more than $45 billion total whether it is into the trust fund or into the additional fund created by Feinstein and Kohl.
"If this cannot be achieved, we will oppose the legislation," Robert Vagley, AIA president, wrote in the letter.
During committee deliberations, lawmakers also reached agreement on medical criteria to screen workers who are eligible for payments, but they have yet to reach agreement on a payment formula, which will be the subject of debate starting July 10.
The bill is a priority for a range of companies facing asbestos liability claims, such as USG Corp. and W.R. Grace & Co. .
Asbestos, once widely used in insulation and for fireproofing until the 1980s, can cause a particular type of lung cancer and other lung diseases. Payments from asbestos lawsuit settlements have sent some 60 companies into bankruptcy, according to a study by the Rand Institute for Civil Justice.
