Bush push for asbestos reform a case of good news/bad news

While insurers were pleased to see U.S. President George W. Bush pushing for asbestos reform last week, the details of the plan he supports are leaving them less than impressed. In several speeches last week, Bush touted the need for tort reform on a variety of fronts, including medical malpractice and asbestos claims. He came out in support of legislation being touted by Senate Judiciary chair Arlen Spector, to establish an asbestos fund. In a speech in Michigan, President Bush noted: “Well, first of all, we spend about US$80 billion on asbestos litigation, and that could end up being US$200 billion over time. Secondly, these asbestos suits have bankrupted a lot of companies, and that affects the workers here in Michigan and around the country. Thirdly, those with no major medical impairment now make up the vast majority of claims, while those who are truly sick are denied their day in court.”Sen. Specter is set to hold hearings on draft legislation Tuesday to set up a trust fund that is strongly opposed by insurers. In a statement, Property Casualty Insurers Association of America (PCI) CEO Ernie Csiszar says, “The draft eliminates the aggregate funding levels for both insurers and defendants. It allows many claims to be pursued in the same tort system where the problem exists today and envisions sending claims back to the tort system if the trust fund runs out of money. Because of this, it does not provide certainty or finality to our members who have to pay these claims. Nor does it provide for effective, equitable, or efficient reforms that will allow claimants, defendants and insurers to resolve the asbestos litigation crisis.”