Insurers seek to limit asbestos fund contributions

U.S. insurers and reinsurers are encouraging legislators not to increase the amount companies would contribute to a national asbestos litigation fund that could be established under Senate bill S.2290. Insurers made the appeal in a joint statement from the National Association of Mutual Insurance Companies (NAMIC), the Property Casualty Insurers Association of America (PCI) and the Reinsurance Association of America (RAA).
While commending legislators on the bill, introduced April 7, insurers want to see the $46 billion cap on insurer contributions contained in the bill remain. Insurers say the limit, which will be spread over the 27 years of the program, is essential, and that other outstanding issues need to be dealt with.
Specifically, insurers are concerned that the bill still leaves the door open for asbestos lawsuits based on a variety of theories. As well, they say, the bill does not address mitigation by claims under state workers’ compensation lien laws.
Insurers and reinsurers say their initial payment obligations remain in question, with the bill creating a federal commission with discretion to set out such payments. Also, there is some question as to non-U.S. entities being held accountable to the same level as U.S. entities. “Because non-U.S. entities may not be bound to pay their shares equitably, and because some U.S. insurers may not pay (or be able to pay) their initial obligations, S.2290 creates a huge uncertainty for all insurers and reinsurers as to what their ultimate payment obligations will be,” the statement notes.