In 2011, Asbestos.com reported that US engineering and Jackson County, Missouri agreed to pay $ 10.4 million to family of a county employee who died of mesothelioma. Nancy Lopez was exposed to asbestos during renovation and demolition projects by American genius at the courthouse in Jackson County where she worked. His trial made headlines for the largest colony of asbestos results in the history of Missouri.
The large size of the colony was particularly noteworthy because it came more than a year after the death of Ms. Lopez. Juries tend to attribute greater compensation to victims who survive the trial. Without the possibility of a sympathetic victim with direct testimony, the accused are less likely to accept a large colony. Indeed, asbestos defendants often resort to litigation tactics to delay the case process so they can avoid facing a live victim in court.
But the case of Ms. Lopez also highlights other delays experienced by asbestos claimants. At the origin of this delay is how insurers pay asbestos claims.
Late payments related to insurance "Floats"
A significant amount of asbestos liabilities are paid with money from insurance companies. According to A. M. Best, US P & C insurers have funded 0 percent, or $ 114 billion, the estimated asbestos (A & E) environmental liabilities. Since asbestos defendants rely heavily on insurance to meet their obligations asbestos, insurers have an important contribution in the settlement negotiations.
asbestos claims most successful effectively settle without trial. asbestos defendants often agree to regulations limiting their legal costs. But insurers do not necessarily share this incentive. In a statement to Scripps News, former executive claims Robert Burns explained that the insurer could find "cheaper than paying to argue."
Burns managed the insurance accounts for Resolute Management Inc., a Berkshire Hathaway company. He recently testified in an ongoing trial against Resolute and another company Berkshire Hathaway. The lawsuit was filed by several large companies, including Ford Motor Co. and Estee Lauder, who purchased commercial insurance policies to cover pollution damage and long-term receivables related to their products and services. They allege that the companies Berkshire Hathaway delayed paying claims under their policies so that it can invest the money paid for the premiums and obtain greater returns on their investments.
The practice is to manage what is known in the insurance industry as a "float". Between when a company pays its insurance premiums and the time it made a claim under its policy, insurers hold and invest the money paid for the premiums. Premiums paid for the policies of asbestos and pollution stays invested for a long time because it usually takes several years before the claims arise. Money held for these policies is known as a long tail float.
In a 09 letter to shareholders, Warren Buffet said the float Berkshire Hathaway increased by $ 16 million in 1967 to $ 73 billion in 2012. The growth is attributed in part to the decision to Berkshire start buying policies of asbestos and pollution from other insurers it fifteen years ago. In a letter to shareholders in 2011, Buffett explained that the long tail floats have enabled the company to benefit "as we would if a party has deposited $ 70.6 billion with us, we pay fees to maintain his money and let us invest its funds for our own benefit. "
But the defendants who bought trade policies and asbestos claimants complain that such profit may come at their expense. If insurers as companies Berkshire Hathaway who acquired much of the asbestos liability, finding it more profitable to take on the float that the early determination of disputes reaching regulations becomes more difficult.
Ms. Lopez's case offers a case study in the potential delays caused by insurance practices.
In June 2010, Zurich American continued engineering United States to avoid covering the contractor asbestos lawsuits, including Ms. Lopez's trial. Ms. Lopez died later that year. Resolute also controlled insurers that finally paid for his request. But according to a report Scripps News, Resolute has not a single settlement offer before Ms. Lopez died. It took more than a year after his death to his family actually receive the money.
growing concern about delays that claims of asbestos Increase
Last month, AM Best noted that the losses of asbestos and environmental (A & E) property and casualty claims industry grew 12 percent in 2012. the longtime insurance rating company says the increase is due in part to an increase in lung cancer trials related to 'asbestos. It also raised its estimate of the ultimate net losses for asbestos national property and casualty industry of $ 75 billion to $ 85 billion.
With the insurance products play an important role in the settlement of claims of asbestos, there are growing concerns about the role of insurance in the payment of delayed claims.
But in an unexpected move, Warren Buffet responded last month to Scripps News coverage of the controversy over long tail Berkshire float, and allegations that the foundation of the company claims payment decisions on its financial . objectives
Buffet told the Omaha World-Herald: "We take very seriously the important tasks that we take in this area; rights due to policyholders, insurers and reinsurers whose behalf we manage complaints, the regulators who oversee our industry, and even our own shareholders, who expect us to work well above the minimum standards of practice for our company. "
Berkshire also issued a press release calling the misleading and inaccurate coverage. It maintains that its insurance companies pay legitimate claims in a timely manner, but also plead deemed excessive requests.
