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Insurance Firms Drop Support of Asbestos Fund

While the number of claimants seeking restitution for asbestos-related claims continues to grow, more than a dozen insurance companies have withdrawn their support for the proposed $140 billion federal trust fund that would serve to pay these claims, according to a recent report from the Wall Street Journal (WSJ). This will likely have an impact on Congress’ passage of legislation on asbestos litigation, as Senate Judiciary Committee Chairman, Sen. Arlen Specter, was expected to introduce a trust fund bill this week, the report said.

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WASHINGTON — While the number of claimants seeking restitution for asbestos-related claims continues to grow, more than a dozen insurance companies have withdrawn their support for the proposed $140 billion federal trust fund that would serve to pay these claims, according to a recent report from the Wall Street Journal (WSJ).

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This will likely have an impact on Congress’ passage of legislation on asbestos litigation, as Senate Judiciary Committee Chairman, Sen. Arlen Specter, was expected to introduce a trust fund bill this week, the report said.

The insurers that have pulled support, including American International Group, Chubb Corp., Liberty Mutual, Nationwide Financial and Zurich Financial, now join conservative Republicans and a number of major corporations that feel the fund is too big and would not adequately protect them. Opponents of the trust fund would prefer that Congress use medical criteria to determine payouts to claimants.

According to WSJ, another opposing party, The Coalition for Asbestos Reform, plans to deliver a similar message via letter to Congress this week. The coalition consists of major corporations such as Exxon Mobil and Federal-Mogul. However, other members of the group, including Goodyear Tire & Rubber Co., Shell and John Deere, said they won’t sign the letter.

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On the other side of the argument, Democrats previously would not back the bill arguing that it wasn’t large enough to compensate for Americans at risk of developing asbestos-related illnesses in the future. To garner the Democrats’ support, previous Judiciary Committee Chairman Orrin Hatch, increased the size of the fund from $90 billion to $140 billion.

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