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CALIF. ASBESTOS RULING

The California Court of Appeals has shot down the notion that manufacturers bear the legal burden to issue warnings about materials made by third parties that contain asbestos.

The plaintiff sought damages on the basis that the manufacturer should have warned him about the asbestos in the products manufactured by third parties that were used in conjunction with its product.

"Adopting the rule ... would extend potential liability for failure to warn to persons far outside of the distribution chain of the defective product," the court wrote in its decision.

"Defendants whose products happen to be used in conjunction with defective products made or supplied by others could incur liability not only for their own products, but also for every other product for with which their product might foreseeably be used."

In December 2008, the Washington Supreme Court addressed similar circumstances in Simonetta v. Viad Corp. and Braaten v. Saberhagen Holdings.

That court also rejected arguments that that liability should be expanded in third-party cases.

Ann Spragens, the general counsel for the Property Casualty Insurers Association of America, said she was pleased with the California verdict.

"It had the potential to not only spawn new asbestos litigation in California, but also litigation against other industries," Spragens said.

HONG KONG AS A DOMICILE

The Self-Insurance Institute of America is hosting an upcoming Tour of China to explore the possibilities of Hong Kong as a captive domicile.

According to a recent study by the Business Federation of Hong Kong, Hong Kong could prove to be an attractive domicile for companies on mainland China.

The tour is scheduled for May 31 through June 6 and will feature a three-night stay in Shanghai and two nights in Beijing.

Work sessions will include roundtable discussions with mainland China third-party administrators, sessions with multinationals already doing business in China, and visits to a state-owned Chinese insurance company and a multinational insurance company.

Captive formation seems to be a hot topic in China, as evidenced by the fact that a delegation of senior managers from a major Chinese insurance company recently visited Guernsey, which with 368 captives as of year-end 2008 is one of the world's leading captive domiciles.

Among Pacific Rim domiciles, leading domiciles include Hawaii, which at year-end 2007 had 163 captives; Singapore, which at year-end 2007 had 62 captives; and Labuan, which at 2007's year-end had 31.

This spring's visit to China won't be all business. The tour will also include stops at the Great Wall of China, Tiananmen Square and other attractions.

--Compiled by staff from news and wire reports.

May 1, 2009

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