Document RJyRKoax0qY1dzVmwVK6kB4Z8

i HARTFORD COURANT SUNDAY MARCH 4TH 1979 By MICHAEL LONDON ictini? of asbestos-related diseases have bees suing employers and manufacturers with increasing frequency and success late lyAnd insurance companies, which are faced with billions of dollars in claims, have reacted by prepar ing to pay nearly the maximum provided under the policies they wrote. The lion's share of claims filed will go to two Hartford-based companies, according io industry esti- ' mates. One analyst who follows the industry says Aetna Life & Casualty Co. and the Travelers Insur ance Cos. may be faced with up to 30 percent of the claims. The two companies generally don't want to talk about their book of asbestos-related insurance claims, or how much the losses might cost them. But the Trav elers concedes it has prepared to pay nearly the maxi mum loss provided in its policy with Johns-Manville Corn., the nation's leading asbestosmalfr And Aetna said, "We have reserved for the full amount we feel we will ultimately be obligated for. We are reserved for the total amount we expect to pay." Both Aetna and Travelers say future profits won't be affected by the asbestos claims. What do the firms expect to pay? Aetna says only that the amount could be between $10 million and $3C million under its insurance policies with asbestos-rela ted firms -- perhaps a good deal more if reinsurance is included. Travelers would say only "millions." Insurance companies often reinsure a risk with another insurance company if the risk is considered too great for one company alone. Oliver L. Patrell, Aetna vice president of com mercial insurance^aiii-theiiflsuraaee-.indusay evento ally may be forced to pay asbestos-related claims to taling hundreds of millions of dollars. Federal Health, Education and Welfare Secretary Joseph A. Califano has warned that as many as half of the 3 million to 11 million Americans who worked with asbestos during and after World War II might die of asbestos-related diseases.. The workers, many of whom were employed in shipyards, inhaled the fibrous material. Once inhaled, the tiny particles irritate the lungs. And after years of continual exposure to the material, the lungs some times develop cancer. * Doctors at Mount Sinai Hospital in New York City, in 1976 found lung abnormalities in X-rays of 45.9 per cent of 1.000 workers at the Electric Boat Division of General Dynamics in Groton. More than $73 million in damages is being sought by about 110 present and. former EB workers because of asbestos-related diseases/ But EB doesn't worry the insurance companies. EI>, which slopped using asbestos in 1974, insures itself. The insurance companies are watching EB cases only to learn better ways- ta handle their own cases. More than $2 billion in lawsuit claims have been filed by individuals and groups throughout the nation who claim to have suffered from exposure to asbestos. One lawsuit, filed in California, claims $1 billion in damages under a class action for 5,000 shipyard workers. The suit charges 15 companies with conspir ing to conceal or distort reports on the health dangers of asbestos, which is generally used for insulation. Raymond W. Stahl, senior vice president in charge of claims operations at Travelers, said his company has, over several years, set aside millions of dollars to cover asbestos-related claims so future profits won't be hurt. He would not be more specific. Stahl said asbestos-related insurance claims probably represent less than 1 percent of the number of property-casualty claims filed last year. But he would not say how much in damages is being sought. ``We did dispose of 419 lawsuits in 1978," Stahl said. Of those claims, the company paid portions of 221 of them. Seven were settled through jury trials and 191 were settled without Travelers having to pay anything. Aetna would say only that more than 2,000 claims have been filed with it. Asbestos-related diseases take many years to de velop. A company that insured a firm when workers began being exposed to asbestos might not be the same company that provides the firm's insurance when workers first complain about asbestos-related health problems. Roger EL Copland, an analyst with Washington Analysis Corp., a unit of the Wall Street brokerage Bache Halsey Stuart Shields Inc., said his firm last month completed a study of asbestos-related compa nies. He found that because more than one insurance company may have insured a worker during the many years the employe worked with asbestos, claims are often settled with each of,the Insurance companies paying a portion of the claims. Copland said the average asbestos-related, prod uct-liability claim is for $1 million. The average set tlement is for about $70,000. People with asbestos-rel ated diseases are generally retired or near retirement. Therefore, settlements, which are often based on wages lost due to illness, are considerably smaller than the claims. However, "It's fairly likely a defendant will get something," Copland said. The number of claims filed has increased dramat ically in the past few years --doubled in the last year alone. If that trend continues, insurance policies will be sufficient to cover claims against asbestos :firms for only about two years, Copland said. When the insurance companies have paid all they must under the terms of their policies, individuals will have to seek damages directly from the asbestos firms, not the insurance companies. Thus, Copland said, it's theoretically possible for the asbestos-makers to be forced into bankruptcy by the asbestos claims. "1 don't think ^-*1?] cV.c:' tV.r.t `r " i. i.j-'-si-,r. orobuLiy would step i. ;.i r,;,u).- ,.,..1 y juvs.V.t Jl'.ii jo. :ncr flS- Oc........S i-.c au! t.vci c u. fw.t'lt.*<.v.i;i intervenes. if oossnt i- ci.i-.sj...;; ii.eu. u.i ir.aiiuiacajrers art off th; ratrelt sate. i i /' f ii >jr i/u'uf years, nus receiveo as .i>.111v r.sc.e is. u.. j,jreeding H* years Tnere are ii ... i c:.. !i* ii.;. si,;-.: ; increase. u-:.r.i I..*- ;. . iuiiciior. of several things. One i> c-it-: i,c fiie other is increased ii- .---.!; in-. j.-uviic," S-tahl said. A'tsc. worers wi;;.,,. n- }:.s- ir-.- \..sr:. begun developing seri- ..* o v-i; l-i> ;. t.-.r.- o; r;#/.;aci with asbestos. ir ii. fit./ii, a. t.rought under prceuct-lta- i.iiif >r.;.c.c: Out1.i*.--. tin workers can get more ii..... ii..-. - ay. r.t.'.n,: it,-, u-orrr.en's. compensation i. ii.ji'u't -- j.uiiiti.i Guiriugcs are not aliowed, the insurance men said. -i.t.- can eolirei workmen's compensa- i-.i !>; ti.ci' ...i.ii.-yer.1 ar.e t..en can sue the manu- jar:..--.-: ast-estt,.' used by the worker's compa* n\. Vi a u-.c __ii.r.-easir.;- numbers of claims.. Af.ra a:.d. Trt-.'cierT; :-;`'bV'-ic'" :t: v/rUlnj ~ne'v.- poli tic- t. ci-.i.' .... t,,... tv;-; i,,.,r 1onset.. They have riot,' airgad}' in force. {.;;.-ar Inst ra-act ccrr.rar.it:. similarly. have stop* \~s writing aft-asu'.-reiauc j-aiicies. Tr.at has forced nsnesior manufacturers to insert themselves. Coolant sai.. for txe.mrie. Johns-ManviHe of 1-nver, Cote., insures iisel; for up to J12.5 million in h.-tres t.i>- the company has also purchased additional Iu.-ci -' a i - i!i ty ir.sura nee. i -- !..>; niui Fio-.-rrlass Corn, of Toledo, Ohio, f..* t-.i'et..t>ec 3) H j.ii'i'iioo <f insurance beyond an tut* of ;o.;...i-?nce i: provides for itself. i-.u. ''is.irancs, offiriair and the federal govern- ; n-t-i. knew if t/.a: wi); be enough to cover all the J asi -iji-'S-'-eiaiod claims. j .'f'.r1..v..-.r>,iV*! >*c-m. had l.fH- asbestos-related ; -c! -' -,;..r >< o' > -vems-cr 15'7t. Owens-Corning, i sTi.aV'n.; *'. >;c-stDr. ir. 3P72. had 1,070 i! >5 ! S?t->rTTiiv.-r 1371. Copland said.