Environment Issues

A review of the 10 Ks of major insurers suggest that certain costs associated with environmental type exposures are “not estimable.” However, actuaries are being asked to develop estimates of the costs arising from environmental hazards such as asbestos, lead, underground storage tanks, and toxic waste. Projecting the liabilities due to these exposures is a very difficult problem due to the lack of historical data, the changing interpretation of coverage, as well as, the lengthy time periods involved from discovery of an incident until settlement of a claim. This panel will review methods that are currently being used to develop loss projections. The data, assumptions, and practical considerations of each method will be discussed. In addition, the panel will discuss possible changes in the Superfund law, which is scheduled for review in 1994, and how such changes might affect future reserve estimates. The session will be structured to allow ample time for comments and questions from the audience.