The Next Asbestos
Bonnie Boccitto, FCAS, CPCU, MAAAChief Underwriting Officer
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The Next Asbestos
Why has asbestos proven to be so difficult to quantify?
On the horizonElectromagnetic FieldsSilicaPharmaceuticals
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Asbestos Characteristics of the product
Large number of people affected
Large number of defendants
Disease manifests after a long period of time
Non-reversible, fatal effect
Use of court system (tort) rather than WC
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Asbestos Characteristics of a Legal Environment
Evidence of concealed knowledge
Continuous exposure theory
Class action suits
Bankruptcies
“Fear of” claims
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Asbestos Litigation1940’s Exposure in ship building industry during WW II1950’s – 60’sExposure at construction sites1973 Asbestos claims began1981 Judge Brazelon declares continuous exposure
theory1982 16,000 claims against Mansville/ Mansville
declares bankruptcyLate 1980’s Class action suits beginEarly 1990’s Pleural plaque (unimpaired) claimsMid 1990’s Defendants offered $1.2 billion settlement
agreement with no value for future pleural plaque claims
2000 30,000 New Claims2002 90,000 New Claims2003 100,000 New Claims
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Asbestos: Current Status
Federal asbestos trust fund discussions delayed
Rand estimates 730,000 total claims
Estimate 200,000 claims still pending
Milliman projects that the total cost of settlements will ultimately reach $265 billion
Asbestos defendants have grown from 300 in 1980’s to
8,400 today
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Electromagnetic Fields (EMF’s)
U.K. group re-visiting worldwide studies to determine link between EMF’s and cancer.
Claims that exposure to electromagnetic fields cause reactions in the skin similar to the reaction to radioactive material.
Fourfold increase in tumors on the auditory nerve of those using analog cell phones over a period of 10 years
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Electromagnetic Fields (EMF’s)
Study by EU members found breaks in individual strands of DNA
NYC Council is considering a long-term study of cell-phone base stations
A 23-year study concluded that there is no established link between the broadcast antennas and brain and nervous systems cancers
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Electromagnetic Fields (EMF’s)
Affects large number of people Potential latent effects Utilities as defendants would be unattractive. Could
other defendants be found? Cell phone manufacturers would be attractive
defendants Seriousness of affect Could affect WC and tort system Class action suits definitely possible “Fear of” claims definitely possible
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Silica Silica comes from sand and gravel with a high
concentration of silicon dioxide and is found in concrete powder, glass, detergents, and ceramics.
Silica causes silicosis, pulmonary fibrosis, and allergic bronchopulmonary aspergillosis
Year Silica Cases 1975 – 2001 200 2002 3,500 2003 22,000
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SilicaMulti-Defendant Suits
Multi-Defendant Claims California: 50 defendants
Philadelphia: 15 co-defendants
Florida: 8 defendants
Washington state: 60 potential defendants
Alabama court dismissed a complaint against 75 defendants for lack of specifics tying the defendants together.
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SilicaClass Action
Estimates suggest 480,000 former miners with silicosis in South Africa.
Miners in Ontario
10,000 claimants in Federal Court in Texas in 2006.
New Jersey silica plaintiffs were unsuccessful in a recent attempt to have the silica litigation designated as a mass tort.
California “class action” dismissedMunich-American RiskParnters is a division of American Re-Insurance Company
Silica“Fear of” Claims
Sandblaster who was diagnosed with silicosis but was never disabled, may still receive an award of medical benefits from his former employer.
Ohio considering bills to block “fear of” claims
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Silica
Federal Settlement
Lawyers moving to silica claims if asbestos litigation is not found satisfactory
Some talk that silica to be part of the $140 billion privately financed, privately administered asbestos trust fund
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Silica
Large number of people effected Large number of defendantsDisease manifests after a long period of time Non-reversible, fatal effect (but preventable)Use of court system (tort) rather than WC “Fear of” claimsClass actionsprivately funded federally administered settlement International in scope
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PharmaceuticalManufacturers
PfizerMerckNovartisLillyWyethJ & J
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Pharmaceuticals
Large Number of Claimants
A U.S. Government study reported that more than 40% of Americans take at least one prescription drug and one in six take at least three.
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Pharmaceuticals
Large number of defendants
Manufacturers
Doctors
Pharmacists
Managed care organizations
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Pharmaceuticals
Class Action
BMS, manufacturer of the drug Serzone, agrees to settle class action involving over 2,000 plaintiffs
States enter litigationPurdue Pharma, manufacturer of OxyContin, has
settled with the Attorneys General of West Virginia and Florida on claims that the company misrepresented the additive nature of the drug, creating a public nuisance and violating state deceptive trade practices.
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Pharmaceuticals
Latent Effects
Personal Injury, Property Damage or Advertising Liability shall be determined under the Policy in effect on the date in the Annual Period when Notice of Integrated Occurrence is first given
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Pharmaceuticals
Large number of people affected Large number of defendantsDisease manifests after a long period of time Non-reversible, fatal affectUse of court system (tort) rather than WC “Fear of” claimsClass actionsprivately funded, federally administered settlement International in scope
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Thank you for your interest.
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