Insurance Industry, Government Argue Over Cost of Pleural Plaques Compensation

Insurance Industry, Scottish Government Argue Over Cost of Pleural Plaques Compensation

The Scottish government and insurance industry continue to argue over how much it will cost to cover claims for pleural plaques caused by asbestos exposure. The Association of British Insurers (ABI) claims that parliament has underestimated the amount of money required to fund compensation by hundreds of millions of pounds.

The preliminary government estimate put the annual costs at less than £7 million annually but insurers claim that annual costs could exceed £600 million and ultimately top out at £8 billion.

Parliament and the Justice Committee issued a report concerning the "Damages (Asbestos Related Conditions) Bill" with revised estimates that put the settlement amount at £17.1 million upfront to settle existing cases with an estimate of £5.5 million to settle 200 cases a year at a cost of £25,000 each.

The insurance industry fired back claiming that the annual costs could be anywhere from £76 to £607 million with a total cost of between £1 and £8 billion. Lawmakers agreed their initial estimate was low but criticized the insurance group for what they claimed was a significant overestimate.

The ABI believes that many more workers exposed to asbestos will start coming forward with claims for pleural plaques. They cited the British Coal pulmonary disease scheme which was expected to compensate for 150,000 claims but ended up with more than 600,000 claims before it was closed.

The industry reiterated its support for the House of Lords decision that people diagnosed with pleural plaques from asbestos exposure are not entitled to compensation unless it develops into an asbestos related disease. People who have pleural plaques claim they suffer from decreased lung function and anxiety over possibly developing mesothelioma.

Studies have concluded that up to 50 percent of people exposed to asbestos on the job will develop pleural plaques 30 years after their initial exposure to asbestos. It is unclear how many of those people ultimately develop mesothelioma or other asbestos related diseases.

The Justice Committee ultimately recommended support for the bill but stated that there were unresolved issues related to compensation that raised significant questions about the financial implications.

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