Asbestos Reform Plan Hit As Big Insurers Fear Cost; 15 Firms Urge Bill Be Killed; Senate measure proposes $140 billion fund to settle industry liability lawsuits.(A)

Byline: SEAN HIGGINS

Efforts to resolve the asbestos litigation crisis took another blow Monday when 15 major insurance companies rejected a proposed reform bill. Instead they urged lawmakers to scrap it and start over.

The move was a setback for Senate Judiciary Committee chairman Arlen Specter, R-Pa., who has labored for months to craft a bill that can win support of Republicans and Democrats, industry and unions. He was expected to unveil his latest draft later this month.

"It makes it more difficult to get something through," said Don Stewart, spokesman for Sen. John Cornyn, R-Texas, a key committee member. Specter is set to meet with the committee on Thursday to discuss the matter.

But most observers say the insurers haven't killed the bill, though optimism has never been high.

Specter has proposed a $140 billion trust fund to resolve all remaining asbestos exposure cases. Business and insurers would jointly pay into the fund, with insurers paying $46 billion.

In a letter to Specter dated Monday, the insurers, including Allstate, Liberty Mutual, Nationwide and American International Group, pulled out. They cited concerns over the total cost of the fund, the criteria for claims and when claimants could return to the courts should the funds run out.