S.Amdt. 2883

SA 2883. Mr. SPECTER (for himself, Mr. Lieberman, and Mr. Dodd) submitted an amendment intended to be proposed to amendment SA 2746 proposed by Mr. Frist (for Mr. Specter (for himself and Mr. Leahy)) to the bill S. 852, to create a fair and efficient system to resolve claims of victims for bodily injury caused by asbestos exposure, and for other purposes; which was ordered to lie on the table; as follows:

On page 212, line 21, strike all through page 214, line 22, and insert the following:

(B) Procedures for determining insurer payments.--

(i) Amount of payments.--The Commission shall determine the amount that each insurer participant shall be required to pay into the Fund under the procedures described in this section. The Commission shall make this determination by first promulgating a rule establishing a methodology for allocation of payments among insurer participants and then applying such methodology to determine the individual payment for each insurer participant. The methodology shall be uniform for all insurer participants.

(ii) Reserve study required.--The Commission shall conduct a reserve study (the “Reserve Study”) to determine the appropriate reserve allocation of each insurer participant and may request information from each insurer participant, defendant participant, the Securities and Exchange Commission or any State regulatory agency for the purpose of conducting the Reserve Study. The Reserve Study shall calculate each insurer's exposure to current and future asbestos claims in the asbestos litigation environment as it existed prior to enactment. Such calculation shall be derived from the following elements:

(I) an estimation of each and every defendant participant's current and future exposure to expense and loss costs in the asbestos litigation environment as it existed prior to enactment (“Ultimate Expense and Loss”);

(II) applying a uniform set of assumptions regarding the application of insurance and reinsurance to Ultimate Expense and Loss, an analysis of each insurer participant's unresolved or unexhausted insurance or reinsurance coverage applicable to such Ultimate Expense and Loss for each defendant participant;

(III) a project of each insurer's exposure to claims by entities that had not yet become defendants as of the date of enactment, but might reasonably have been anticipated to become defendants in the future if the asbestos litigation environment as it existed prior to enactment had continued. Not later than 60 days after the initial meeting of the Commission, the Commission shall commence a rulemaking proceeding under section 213(a) to propose and adopt a methodology for conducting the Reserve Study and allocating payments among insurer participants on the basis of the Reserve Study. Such methodology shall be consistent with the provisions of this paragraph.

(iii) Permitted extrapolation of ultimate expense and loss for peripheral defendant participants.--The Commission shall be given the discretion to establish an appropriate methodology to extrapolate Ultimate Expense and Loss for Tier VI defendant participants for the purposes of the Reserve Study. Considerations for such methodology shall include, but not be limited to, the nature of that Tier VI defendant participant's asbestos liability, the number of pending and historic asbestos claims against the Tier VI defendant participant and the jurisdictions in which such Tier VI defendant participant had been sued for asbestos liability.

(iv) Rule of construction.--Nothing in this subparagraph shall undermine the initial payment requirement in section 212(e)(1).