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AIA Supports Bipartisan Legislation to Provide Needed Transparency to Asbestos Trust Funds

Posted on 21 Mar 2013 by Neilson

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AIAThe American Insurance Association (AIA) supports bipartisan legislation, “The Furthering Asbestos Claims Transparency (FACT) Act,” introduced by Representatives Blake Farenthold (R-TX) and Jim Matheson (D-UT), which aims to bring much needed transparency to our nation’s asbestos-related personal injury trust fund system. H.R. 982, the subject of today’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law hearing, addresses ongoing systemic gaps, which currently enable fraudulent, inconsistent and duplicative claiming practices between the trusts and the tort system, by requiring the trusts to file quarterly claims disclosure reports.

“The trust fund system originated to resolve present and future asbestos injury claims for victims deserving of compensation,” said Melissa Shelk, AIA’s vice president for federal affairs. “Unfortunately, the system is susceptible to abuse and payment of fraudulent claims to the detriment of legitimate claimants. This legislation’s transparency measures will protect claimants’ confidentiality while ensuring the continued viability of the asbestos trust fund system.”

The current system, created by the Congress in 1994, fails to link payments to individuals and therefore provides unscrupulous parties with an opportunity to improperly secure compensation from multiple trusts. In addition, the trusts’ lack of transparency, oversight, and coordination with the tort system has allowed for fraudulent, inconsistent and duplicative claiming practices.

Under H.R. 982, trusts will be required to disclose basic information on claims and payments to the bankruptcy courts, while protecting against the disclosure of claimants’ medical records and personal identification information. These limited disclosures aim to deter fraudulent duplicative claims and ensure that asbestos exposure history provided by claimants to a particular trust is consistent with what they have provided to other trusts and to a court in any civil proceeding.

“AIA encourages congressional support for the FACT Act,” said Shelk. “By providing the necessary transparency and oversight, Congress will reaffirm its original intent and stem the tide of improper and illegitimate claims that are currently adding unnecessary costs and delays to the system.”