HOPES ALIVE ON PRODUCT LIABILITY

WASHINGTON-Of the risk management-related legislation now before Congress, a federal product liability bill has the best prospects, said a pair of insurer lobbyists.

"It's possible within the next month that the product liability bill could come out of the conference committee," Tom O'Day, associate vp-federal affairs at the Alliance of American Insurers in Washington, said during a briefing last week.

House and Senate conferees late last year began trying to resolve differences between a Senate measure limited to product liability and a House bill that would make significant changes to the entire civil justice system.

Mr. O'Day predicts the committee will report out a measure that looks much like the Senate bill-S. 565. But the compromise legislation will contain a few "bells and whistles" from the broader House bill, he said.

President Clinton has said he would not support the House bill, but may accept the more moderate bipartisan Senate bill. Mr. O'Day warned, however, that the president continued to say that he would sign a mild securities litigation reform bill almost until the measure reached his desk, and then vetoed it. Congress reacted by overriding a Clinton veto for the first time.

House supporters of the product liability legislation probably have enough votes to override a veto of H.R. 956, but the outlook in the Senate is far less certain, he said.

Besides product liability legislation, both a Superfund bill and legislation to create a natural disaster insurance fund have a chance of success in Congress, said David M. Farmer, the Alliance's senior vp-federal affairs.

"The next 90 days are critical" to the Superfund measure, he said.

It is still unclear just what shape the legislation finally will take. Both the House and the Senate are "still grinding" away at legislation and looking at how to handle the liability for old pollution where more than one party contributed. For example, senators continue to believe that acts committed after Superfund's 1980 enactment should not be the beneficiaries of whatever kind of retroactive liability reform is passed, while the House leaders continue to look at a 1987 cutoff, he said.

"We're hoping we're going to get a bill this year, but as you can see, there are a lot of variables," he said.

"We'd prefer to see things go forward on a bipartisan basis," said Mr. Farmer. The "go-it-alone" approach taken by the GOP leadership on some issues has not always worked, he said.

Mr. Farmer said that the House Commerce Committee may hold a hearing on the impact of environmental liabilities on insurer solvency. A spokesman for the committee said that no such hearing had been scheduled yet.