|WASHINGTON - Large commercial insurers are evaluating whether a no-fault trust fund for U.S. asbestos victims can work or whether they favor another legislative approach as a new, more Republican Congress convenes next year, a spokeswoman said on Thursday.|
Insurers distanced themselves months ago from a failed Senate proposal to set up an asbestos compensation fund, but also said they were willing to work with Senate leaders who were trying to negotiate a bipartisan compromise.
Senate Republican Leader Bill Frist of Tennessee and Democratic Leader Tom Daschle of South Dakota agreed in September to $140 billion for the proposed trust fund, to be financed by asbestos defendant companies and insurers.
But they never agreed on key details including one point insurers considered critical -- whether pending asbestos claims would stay in court or shift to the fund.
Insurers argued any fund had to be a universal solution providing equity and finality. They were also unwilling to contribute more than $46 billion.
"I don't think people should assume we are going to pick up where we left off. I cannot rule out a trust fund but I also wouldn't rule out anything else," said Julie Rochman, spokeswoman for the American Insurance Association.
"A well-designed trust fund is the best solution," Rochman said. "A poorly designed trust fund is the worst solution, because if you are paying into the trust fund and still end up paying in court, it's untenable."
The AIA's board met on Wednesday and members said they needed to weigh hard questions and do more analysis. Another option previously considered would be for Congress to establish medical criteria for asbestos claims.
Insurers also had to reassess the political environment, Rochman said. The new Senate will have four more Republicans than before, while Daschle lost his reelection race. Asbestos stocks shot up after the election as traders anticipated a new push for reform.
It is uncertain who will chair the Judiciary Committee, which oversees legal issues and could resume work on asbestos reform.
Asbestos was widely used for fireproofing and insulation until the 1970s. Scientists say inhaled fibers are linked to cancer and other diseases.
U.S. companies have paid billions of dollars on asbestos injury claims. Their executives have also been debating whether to propose an overhaul of last session's legislation or start over.
"I think the major focus is still whether a deal can be made along the guidelines that were set up by the Frist and Daschle dialogue of a couple of months ago," said Stanton Anderson, chief legal officer at the U.S. Chamber of Commerce's Institute for Legal Reform.
Story by Susan Cornwell
REUTERS NEWS SERVICE