Special to the Inter Lake

Former Gov. Marc Racicot, who grew up in Libby, represents one of the many organizations opposing the Fairness in Asbestos Injury Resolution Act being debated in the U.S. Senate.

Racicot, president of the American Insurance Association, wrote a letter last month to Senate Majority Leader Bill Frist, R-Tenn., saying "we want to reiterate our association's strong opposition to the bill as reported out of the Judiciary Committee."

Property-casualty insurers are committed to a solution to the national asbestos litigation crisis, Racicot wrote to Frist, but "since the Senate decided to pursue a trust fund, our industry has stressed that this approach must provide insurers with both certainty and finality for our asbestos exposure."

The legislation includes a $140 billion trust fund for people diagnosed with an asbestos-related disease. The national fund for asbestos compensation would be financed by asbestos-related corporations and their insurers.

Insurance industry concerns focus on language in the bill that says if the administrator of the trust fund cannot resolve a case within a specified period of time, it will be allowed to return to the court system.

"Our industry would inevitably find itself paying both substantial sums to the fund and additional large sums in the tort system for claims permitted to leak outside of the fund," Racicot wrote.

The RAND Institute, a policy research group, reported in 2005 that more than 700,000 asbestos-related lawsuits have been filed in recent decades, costing businesses tens of billions of dollars.

Advocates of the legislation seek to absolve corporations of the legal liability that has forced companies into bankruptcy because of the number of asbestos-related lawsuits against them. The initial intent of the law was to prevent further asbestos-related lawsuits.

Under the proposed legislation, rather than taking their cases to court, asbestos victims would file claims with the Department of Labor, which then would judge whether the claims warrant compensation and allocate money according to the severity of the harm caused by exposure.

The legislation stalled Tuesday. Senators hope to schedule another vote next week.

Provisions in the legislation would pay former Libby-area residents who have asbestos-related diseases as much as $1.1 million each.

The Libby provisions were included because the criteria for determining who was ill with an asbestos-related disease would have eliminated hundreds of victims affected by W.R. Grace's vermiculite mine and mill operations in Libby.

The Libby vermiculite, which was contaminated with tremolite asbestos, was shipped to more than 300 locations in the United States for processing.

Racicot's letter to Frist lists six critical concerns that the insurance industry has with the asbestos relief bill. One of the concerns is about the section that allows the fund administrator to apply special eligibility provisions for Libby victims to other sites throughout the country - if a study by the Agency for Toxic Substances and Disease Registry warrants it.

The insurance association is worried that extending the Libby provisions to other places could threaten the solvency of the $140 billion trust fund. It suggests taking away the authority of the administrator to make that decision and give it to Congress.

Racicot, a former resident of Libby, was Montana governor when the Libby asbestos problem first became a national issue in 1999 and 2000.