Will the $140bn trust fund be laid to rest?
Sen Arlen Specter (Republican), chair of the Senate Judiciary Committee, who champions the $140bn Asbestos Trust Fund, has struggled to build a bipartisan consensus within his committee, but wangling has now postponed a vote by the committee to 12 May.
During the discussion before the postponement, the committee refused to have the fund cover lung cancer sufferers who aren't able to connect their illness to asbestos. Equitas, a reinsurer of Lloyd's of London, was allowed to apply for a hardship adjustment from the fund, if it finds it hard to make payments. The committee also allowed other insurers to take credit for payments, after the fifth year of the fund, if they have to cover shortfalls from Equitas.
Sen Specter remains upbeat about getting "the bill out of committee" when the senators return in early May in spite of a dozen insurance companies that questioned whether the trust fund is fair and affordable to all parties-claimants, the asbestos manufacturers/suppliers and re/insurers. The insurers suggested establishing medical criteria for filing asbestos claims in court which would require judges to provide compensation for the sickest victims first, putting others off until they develop asbestos-related illness.
In spite of that letter, the senator in a fit of denial continued to believe most of the insurance industry "is still on board". But leaving no doubt as to the unanimity of the re/insurers' opposition to the trust fund, the Property Casualty Insurers Association of America, the National Association of Mutual Insurance Companies and the Reinsurance Association of America in a letter to the senator on April 18 said, "The costs of this legislation to the industry are potentially devastating, and are unacceptable to our members. Unless substantial changes are made, we will strongly oppose this legislation."
Sen Specter asserts that his proposal puts stringent guidelines for paying claims of asbestos victims. He says his bill would pay claimants similar to how they are paid in the current workers compensation system. He, also, raising the ire of trial attorneys, suggested that attorney fees be limited to 5% of the awards.