WASHINGTON, D.C., May 29 - Calling it a common-sense approach to fixing an out-of-control asbestos litigation system, the Independent Insurance Agents & Brokers of America (IIABA) is advocating legislation recently introduced by Sen. Orrin Hatch (R-Utah) that would create much-needed national medical standards for asbestos claims.
The medical criteria established under the Fairness in Asbestos Injury Resolution (FAIR) Act (S. 1125) would ensure that those truly sick from asbestos exposure receive swift compensation. The bill would establish a special court of asbestos claims and create a privately financed administrative mechanism—the Asbestos Injury Claims Resolution Fund—to pay claims.
“A whopping 94 percent of asbestos claims have been filed by people who do not suffer from any symptoms of asbestos exposure, leaving many who are truly sick at the back of an unnecessarily long line of claimants,” explains IIABA Senior Vice President of Federal Government Affairs Maria L. Berthoud. “About 65 percent of all asbestos litigation compensation has gone to healthy claimants—resulting in delayed payments to truly sick patients who need compensation immediately, heavily depleted financial resources available to future pay claims, and nearly 70 bankruptcies of companies caught up in asbestos litigation.
“Sen. Hatch’s bill strikes the right balance and brings long-awaited rationality and consistency to the asbestos litigation system,” continues Berthoud. “It brings a better sense of certainty to the sick claimants, businesses and insurance industry that have collectively suffered under the current system. Requiring claimants to demonstrate asbestos-related symptoms before getting their day in court will put an end to this ‘get-rich-quick’ era of asbestos litigation.”
While putting all asbestos claims into a special court and establishing objective medical criteria will ease the overwhelming burden on the courts, the FAIR Act also preserves the rights of those who become sick in the future. Their claims will be preserved in the event they develop a future asbestos-related impairment, and the new fund ensures that money will be available to pay those who become sick.
IIABA believes that the needs of both present and future asbestos victims will be met through the FAIR Act without jeopardizing the financial stability of industrial and insurance companies that are currently paying exorbitant legal fees and settlements into the asbestos litigation system while trying to conduct core business operations critical to all Americans and the U.S. economy.
Independent agents and brokers are finding that asbestos litigation has resulted in higher prices for their customers and financial stress for their carriers, and are concerned that the financial drain will impact other commercial and personal insurance products like homeowners and auto insurance. Asbestos litigation brought about by healthy claimants is drowning businesses of all kinds and sizes. Litigation has spread far beyond the asbestos and building-products industries. At least one company in nearly every U.S. industrial sector is now involved in asbestos litigation, and insurance companies and American consumers are paying the price.
“The number and pace of asbestos-related bankruptcies continue to accelerate under the current litigation system,” Berthoud says. “Jobs are being lost, 401(k) funds are being depleted, and the capital of insurance carriers is being siphoned off by the current asbestos litigation system. This loss of capital will cause waves in other insurance coverage areas unless the current legal quagmire is fixed. For the sake of sick claimants as well as the average American who is seeking affordable insurance rates, not to mention homeowners and other coverages, this legislation needs to be enacted.”
IIABA also notes that a fair allocation formula for all companies—national and regional alike—will be integral to the success of the fund. There is still a lot of work to do on this bill and this issue, and some of the issues will require compromise.
"IIABA and its members are grateful to Sen. Hatch for his persistence on this issue,” Berthoud continues. “Sen. Hatch has used his highly regarded leadership to build a consensus for reform and build a foundation for a common-sense resolution to the asbestos litigation crisis.”
Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.