On July 31, the panel issued its ruling in the confidential asbestos arbitration between Travelers Property Casualty Corp. and ACandS, Inc. As a result of the ruling, asbestos bodily injury claims paid by ACandS on or after July 31, 2003, the decision date, are subject to Travelers’ aggregate policy limits, which have been exhausted.
Travelers anticipates that ACandS will claim that Travelers is obligated to fund 45 percent of ACandS’ unpaid but purportedly settled asbestos bodily injury claims that predate the arbitration decision date. In its bankruptcy filings, ACandS has indicated that the total value of these unpaid but purportedly settled claims is approximately $2.8 billion.
Travelers believes it has meritorious defenses to this potential ACandS claim, which could eliminate or substantially reduce any obligation to ACandS for the purported settlements. Travelers will continue to challenge the amount and validity of these purported settlements in the ACandS bankruptcy. Among other defenses, Travelers believes the purported settlements are not final and are unreasonable in amount. In addition, in ACandS, Inc. v. Travelers Casualty and Surety Co. (U.S. D. Ct., E.D. Pa), Travelers will continue to assert that the occurrence limits in its policies eliminate or substantially reduce any payment obligations it may have with respect to the purportedly settled claims.
“We are pleased with the panel’s decision on ACandS, which has been our most significant potential non-products exposure,” said Robert I. Lipp, chairman and CEO.
Travelers is making no adjustment to its asbestos reserves as a result of the ruling.
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