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NCOIL Adopts Asbestos-Reform Resolution

Legislators of the National Conference of Insurance Legislators' (NCOIL) Property-Casualty Insurance Committee unanimously adopted a resolution recently calling for reform of the current asbestos-litigation system...
August 12, 2003

Legislators of the National Conference of Insurance Legislators' (NCOIL) Property-Casualty Insurance Committee unanimously adopted a resolution recently calling for reform of the current asbestos-litigation system and supporting certain federal and state initiatives aimed at remedying the current approach.

The Resolution Regarding the Need for Effective Asbestos Reform, sponsored by Committee Chair Rep. George Keiser (ND), acknowledges the "'elephantine mass' of asbestos cases flooding state courts and threatening the ability of companies to compensate the truly sick." It calls on Congress and state legislatures to enact "properly constructed, reasonable, and balanced mechanism[s]" for funding asbestos liabilities that include provisions for the following: the ongoing, fair compensation of functionally impaired asbestos victims; a tolled statute of limitations based on medical criteria for unimpaired victims; the financial solvency of businesses exposed to asbestos liability; a requirement that a claimant file suit either in the jurisdiction of his asbestos exposure or in the jurisdiction of the defendant's principal place of business; and limited consolidation of asbestos claims.

Adoption of the Resolution Regarding the Need for Effective Asbestos Reform follows the July passage of S 1125, the Fairness in Asbestos Injury Resolution (FAIR) Act of 2003, by the U.S. Senate Judiciary Committee. The bill, introduced by Committee Chairman Orrin Hatch (R-Utah), would establish a national asbestos trust fund to pay claims for those functionally impaired as a result of their asbestos exposure and would require insurers and defendant companies to contribute, respectively, in excess of $45 million toward creation of the fund. Among its many provisions, S 1125 would pre-empt more generous asbestos settlements currently pending and would rely on ten categories of physical impairment to determine appropriate compensation. Consumer groups, labor unions, and once-supportive insurance industry organizations now strongly oppose the bill on various grounds.