The Independent Insurance Agents & Brokers of America applauded Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) for moving quickly to hold hearings on proposed asbestos legislation, but says the association and other industry partners would like to see additional protections added to insulate insurers and manufacturers against potential insolvency and to avoid putting asbestos cases back into the court system.
“Despite Senator Specter’s considerable efforts, the current discussion draft legislation, while well intentioned, does not accomplish those objectives,” said Ernie Csiszar, president and chief executive officer of the Property Casualty Insurers Association of America. “As drafted, the bill will not settle the asbestos claims that are clogging our court system, bankrupting businesses and costing American jobs.”
Several industry associations addressed their concerns today in a hearing before the Judiciary Committee on the Fairness in Asbestos Injury Resolution (FAIR) Act. Specifically, industry groups seek fairness in funding, with insurers paying appropriate amounts toward a proposed trust fund, as well as a national solution providing finality and certainty, with no leakage back into the tort system.
“The goals of any asbestos trust fund should be to remove asbestos claims from the tort system, ensure that the victims who are truly sick are adequately compensated, and bring the asbestos litigation crisis to a permanent conclusion,” Csiszar said in a statement.
Charles E. Symington Jr., Big “I” senior vice president of federal government affairs said the agent association is pleased that Specter has taken action quickly on this issue, but hopes any areas of concern can be remedied to the satisfaction of all parties.
“The draft eliminates the aggregate funding levels for both insurers and defendants. It allows many claims to be pursued in the same tort system where the problem exists today and envisions sending claims back to the tort system if the trust fund runs out of money,” Csiszar said. According to PCI, the draft in its current form would not provide certainty or finality to insurers nor would it provide for “effective, equitable, or efficient reforms that will allow claimants, defendants and insurers to resolve the asbestos litigation crisis.”
The Big “I” as well expressed its concerns that the most recent draft’s absence of aggregate payment levels make it impossible to determine the cost of the proposed trust fund. Insurers are pledged to pay in a maximum of $46 billion to the trust fund. Industry groups, including the Big “I,” are concerned about paying such massive contributions into the trust fund when the proposed legislation leaves the door open for a potential return to the legal system.
“It is very important that the funding proposal be fair and explicitly stated, so that insurers do not risk being on the hook for more money than was envisioned all along,” Symington said. “We also believe policymakers should not require insurers to pay vast sums into a trust fund that may not provide a final resolution to the problem.”
The Big “I” says it will seek provisions that would avoid the reversion of claims to the courts and suggests that the bill should clearly terminate the litigation system and provide for timely implementation of the trust fund, to avoid any potential reasons for a return to the tort system. This is important not only to provide fairness and certainty to those paying compensation, but also to provide timely justice to individuals who truly have been injured.
“This draft legislation is unacceptable to our members,” Csiszar noted. “If it is introduced, PCI will strongly oppose it.” However, the PCI said it hopes to find a solution to the asbestos crisis and believes alternatives should be explored. “We look forward to working with Senator Specter, President Bush, and all members of Congress in that effort.”
Editor’s note: See more on the subject in National news.