Ohio Tort Reforms, Protecting CLUE Top Midwest Agenda

As state legislatures kick into gear around the Midwest, securing favorable asbestos and tort reforms in Ohio, guarding Illinois’ healthy insurance climate and protecting the use of the Claim Loss Underwriting Exchange (CLUE) as a rating tool are the industry’s top priorities, according to lobbyists in the American Insurance Association’s Midwest regional office in Chicago.

Ohio’s tort system has become a major priority, AIA’s Steve Schneider and Sean McManamy said, especially in light of that state Supreme Court’s controversial decisions in the Scott-Pontzer v. Liberty Mutual case and others, which the men said were examples of “legislating from the bench.”

Insurance industry interests contributed nearly $200,000 to the campaign of Ohio Supreme Court Justine Maureen O’Connor last election cycle. Once elected, she helped overturn the Scott-Pontzer decision. But the industry has its eyes set on bigger targets, according to Schneider.

A major goal is asbestos reform, which was approved last year by the Ohio House of Representatives in HB 292. Another bill, SB 80, passed by the Senate last June, combines more wide-ranging tort reform with asbestos litigation reforms. With a Republican governor and Republican-led General Assembly, the chances for passage seem better than ever. (See page 10 for our interview with Ohio Director Ann Womer Benjamin.)

Schneider argued that most of the claimants now making asbestos claims are not actually sick, but only have been exposed to asbestos at some point. But those people should wait in line until the actually sick have been compensated. Schneider said HB 292 would put that principle into effect.

“Ohio has a lot of manufacturers, and a lot of people have come into contact with asbestos there,” Schneider said. “The trial bar will go out and solicit information from screeners. Everyone at some point has been exposed to asbestos. The problem is these screeners who round up everyone who may have been exposed from working in a factory. But the people who sick have to wait in line. We think people who aren’t sick should wait. If you’re sick, come forward and you will get compensated. HB 292 doesn’t place any statute of limitations on claims.”

Schneider said “the chances are very good that there will be a significant tort and asbestos reform package” to come out of Ohio. Sixty-seven companies have gone bankrupt as a direct result of asbestos liabilities, according to a RAND Institute study. The number of defendants nationally has increased from 6,000 to 8,400 in the last year, while the number of mesothelioma claims has stayed constant at 2,000 for the last decade, according to a 2002 study by Nobel laureate Joseph Stiglitz.

Meanwhile, in Illinois, the industry is playing defense. With a Democratic governor and Democratic-controlled General Assembly, business groups and insurers fear the trial bar will have a field day. …

Editor’s note: To read the rest of this story, see the Jan. 26 issue of Insurance Journal Midwest, which covers Ohio, Michigan, Indiana, Wisconsin, Illinois, Missouri, Minnesota, Iowa, North Dakota, South Dakota, Nebraska and Kansas.