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[greenyes] Global Warming
    Swiss Re (see below) better hope that there are no extradition treaties
between the U.S. and Switzerland, or Mr. Ashcroft will haul them up under
the Patriot Act for being an enviro-symp and otherwise disrespectful of Mr.
Bush, whose application of sound science has informed us all that there is
no such thing as global warming. If we let this junk science infect the
marketplace, there's no end to the mischief it could otherwise cause.



Insurers Weigh Moves to Cut Liability for Global Warming
Directors, Officers Could Face the Denial Of Coverage After Rules Are

Here's what companies' directors have to worry about these days: accounting
scandals ... earnings problems ... oh, and global warming.

With all the talk of potential shareholder lawsuits against industrial
emitters of so-called greenhouse gases, Zurich-based insurance powerhouse
Swiss Re is considering denying coverage, starting with
directors-and-officers liability policies, to companies it decides aren't
doing enough to reduce their output of the gases.

Swiss Re plans to start mailing out questionnaires in the next few weeks in
which it will ask the buyers of directors-and-officers insurance what they
are doing to prepare for imminent government restrictions on greenhouse-gas
emissions. If Swiss Re decides a client isn't doing enough, it may consider
refusing the company D&O coverage when, in a few years, certain countries
begin implementing those rules.

Directors-and-officers liability coverage protects a company's directors and
named officers from personal liability from lawsuits alleging they
mismanaged the company's affairs. This insurance already has grown tougher
and costlier for companies to get amid the spate of corporate scandals.

"Emissions reductions are going to be required. It's pretty clear," says
Christopher Walker, managing director for a unit Swiss Re set up in 2001 to
look at the corporate implications of global warming. "So companies that are
not looking to develop a strategy for that are potentially exposing
themselves and their shareholders."

Swiss Re plans to send out similar questionnaires later this year to an even
bigger group of its clients: the primary insurers that underwrite corporate
insurance policies and buy backup, or reinsurance, coverage from Swiss Re.

Swiss Re isn't the only insurer raising alarm bells about global warming
with its clients. Munich Re says it, too, is asking customers about the
issue, though in informal underwriting discussions rather than through a
written questionnaire. Munich Re doesn't provide directors-and-officers
liability insurance, but the Munich, Germany, company is a big rival of
Swiss Re in the reinsurance business, a market in which both companies are
major players.

"We want all the parties to be informed about this issue," says Thomas
Wollstein, a Munich Re executive. "If we have individual cases where we get
the impression it is not being dealt with properly, then we might, in this
individual case, exclude the risk."

Behind the insurers' moves is the Kyoto Protocol, the international treaty
that seeks to curb greenhouse-gas emissions. The treaty hasn't yet been
ratified by enough countries to put it into effect, and the U.S. has
rejected the document. But European countries, working with the European
Union, are expected to impose caps on greenhouse-gas emissions starting in
2005, and other countries are expected to follow. Swiss Re's Mr. Walker says
he worries that even U.S.-based multinationals could face legal and
financial risk stemming from the treaty, since most of them have factories
in countries that have signed the document.

Word of Swiss Re's coming questionnaire already is starting to turn
corporate heads.
"When the insurance companies are debating things, they're debating them
because they're beginning to see there may be practical consequences. And
when that happens, you've got to pay attention," says Bill Blackburn, vice
president and chief counsel overseeing environmental matters at
medical-product maker Baxter International Inc., which gets some of its
directors-and-officers liability coverage from Swiss Re. He adds that Baxter
has moved to reduce its greenhouse-gas emissions even without government

To be sure, Swiss Re has an interest in spreading worry among corporate
officials about global warming. The insurer is trying to start up some
businesses that aim to profit from helping companies deal with their
ostensible climate-change risks. "I do see this as a potent business
driver," Mr. Walker says.

One possible money-making venture, he says, is peddling insurance to smooth
the introduction of an international market in so-called greenhouse-gas
emissions credits. The fledgling market is hobbled by uncertainties,
including how a buyer can be guaranteed that a seller really has produced
the emissions cuts the credits represent.

In Mr. Walker's view, directors and officers could face legal liability if
they fail to act early to reduce their companies' greenhouse-gas emissions,
exposing their companies to higher catch-up costs for factory overhauls or
emissions credits once government mandates take effect.
Not all insurers express such concerns. "Global warming has just not
surfaced in our universe as a subject," says Tony Galban, a vice president
and manager of directors-and-officers liability underwriting at Chubb Corp.,
Warren, N.J., one of the leading D&O providers. "Not that I'm discounting
the issue and not that I'm suggesting it should be discounted."

A spokesman at New York-based American International Group Inc., another big
D&O provider, declined to discuss what factors AIG considers in its D&O

Mr. Walker says he proposed the global-warming questionnaire to top Swiss Re
officials after watching global-warming-related shareholder resolutions
against U.S. companies gain ground. The number of such measures has doubled
over the past year. While none has passed, one got 26.9% of shareholder
votes in April at American Electric Power Co., the nation's largest
electricity producer. Shareholder activists say, and the Columbus, Ohio,
company doesn't dispute, that AEP is the nation's biggest emitter of carbon
dioxide, the chief suspected greenhouse gas. A similar proposal at General
Electric Co., Fairfield, Conn., in April got 22.6%.
Companies typically ask shareholders to defeat the shareholder measures, a
stance Mr. Walker argues could emerge as "Exhibit A in potential lawsuits
down the line."

Mr. Walker says the insurance industry has an interest in focusing corporate
attention on global warming today much as it prodded clients during the
1990s to prepare for the expected Year 2000 computer glitch. But the Y2K
problem never proved as serious as many had feared. And today, plenty of
lawyers are skeptical that a global-warming-related lawsuit against a
company would go very far in court -- particularly one against a U.S.-based
"With the federal government firmly and repeatedly saying, 'We do not
support mandatory limits,' to say you had an obligation to act is a tough
case to make," says Mary Anne Sullivan, a partner specializing in energy
issues at Hogan & Hartson, a Washington-based law firm. "I think early
action makes a lot of sense. But a lawsuit based on that particular theory
strikes me as a tough lawsuit to win."

Peter Anderson
4513 Vernon Blvd. Suite 15
Madison, WI 53705
Ph:    (608) 231-1100
Fax:   (608) 233-0011
Cell    (608) 438-9062
email: anderson@no.address

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