The Fairness in Asbestos Injury Resolution Act, a U.S. Senate proposal to transfer nearly all outstanding asbestos-related liabilities to a federally administered trust fund, would add $6.5 billion to the federal deficit over the next 10 years, according to an analysis by the Congressional Budget Office. The FAIR Act proposes to solve a long-standing liability crisis stemming from exposure to asbestos by transferring all pending asbestos-related claims to a no-fault system administered by a new Office of Asbestos Disease Compensation within the U.S. Department of Labor. The bill has come under fire from labor, trial attorneys and victims' rights groups, as well as from a group of large insurers--including Liberty Mutual Insurance Co., American International Group Inc., Chubb Corp., Hartford Financial Services Group Inc., Zurich Financial Services Group and Allstate Corp., among others--that have formed an organization called the "Coalition for Asbestos Reform" to lobby against the bill's passage.
LATE PAYMENT PENALTIES
State lawmakers on August 29 advanced a bill that would fine employers in California for failing to pay workers compensation benefits within 10 days of a court award. Under the bill, employers would have to pay $2,000 plus the amount owed for a first violation and $5,000 for each subsequent violation. The bill, sponsored by Joseph Dunn, D-Garden Grove, now heads back to the Senate for concurrence with assembly modifications. It specifies that in order to obtain penalties, an employee would have to prevail in an enforcement action.
REINSURERS' COMBINED RATIO UP
U.S. reinsurers reported a 105.8 percent combined ratio for the first half of 2005, compared with a 96.3 percent combined ratio reported by a similar group of reinsurers for the same period a year ago, according to the Washington-based Reinsurance Assn. of America's survey of 26 companies. The 105.8 percent combined ratio reflects a 79.7 percent loss ratio and a 26.1% expense ratio. The reinsurers reported $13.21 billion in net premiums written in the 2005 first half, a 12 percent decrease from the total reported by the similar group for the same period in 2004.
COURT RULES ON WCF OWNERSHIP
The Utah Supreme Court has declared that Workers Compensation Fund's assets are owned by policyholders, not the State of Utah. The ruling in favor of WCF settles long-standing challenges by the State of Utah and upholds previous Supreme Court and district court decisions. The ruling states in its conclusion: "We affirm the district court's decision that the 'State of Utah has no ownership interest in the Workers' Compensation Fund or its assets other than as a policyholder.' As a quasi-public corporation, the WCF exists to serve an essential public purpose, to provide workers' compensation insurance, all the while being private in ownership. ... The same is true for the WCF's assets, the Injury Fund; and we reaffirm our prior decisions, which have that those assets belong to the WCF policyholders and not to the State."
October 1, 2005
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