The Senate Judiciary Committee has approved an ambitious asbestos liability reform bill, but last-minute changes to the measure have drawn fire from insurers.

Amendments made to the Fairness in Asbestos Injury Resolution Act - S. 1125 - during the July 10 marathon mark-up prompted the American Insurance Association to publicly oppose the measure because of the additional financial burdens it would place on insurers.

The measure, which was drafted by Judiciary Committee Chairman Orrin Hatch, R-Utah, would replace the current litigation-based system for compensating victims of asbestos-related diseases with a national no-fault trust fund.

Claimants would have to meet specific medical criteria before they could receive payments from the $108 billion fund. Payments would be based on ten levels of illness, with victims of mesothelioma - an asbestos-related cancer - eligible for a maximum award of $1 million and other asbestos-related illnesses eligible for lesser awards. The measure had initially called for defendant companies and their insurers to each contribute a maximum of $45 billion over the life of the fund, with the rest of the funding coming from other sources.

But the committee approved an amendment on Thursday that increased the burden on defendants and insurers by $7 billion each.

That came on top of an amendment approved in late June that would have allowed the fund administrator to levy an additional $45 billion on corporations and their insurers on a "contingent" basis if the fund appeared to be in danger of insolvency (BI, June 30).

"They slapped another $7 billion on us tonight," said Julie Rochman, a senior vice president of the American Insurance Association, after the committee's 10-8 vote in favour of the bill.

"They did not address the contingency in that they did not make it truly contingent, so it's possible it remains supplemental. We feel that any contingent fund should fall more heavily on industrial companies than on insurers; that was not addressed, either. So we have no choice but to oppose this bill as it's currently drafted," she said.

The Risk & Insurance Management Society Inc. took a less critical view of the bill.

"RIMS is pleased that the bill is out of the committee," said Janice Ochenkowski, RIMS' vice president, external affairs.

"We recognise that there are some changes that are needed, but we think that the bill is good for the health of the American economy and necessary to assist the victims of asbestos.

"It's important to get a good bill out, even if it's not perfect," said Ms Ochenkowski, who is vice president risk management for Jones Lang LaSalle, a Chicago-based commercial real estate management firm.