Implant Maker, Insurance Firm Tentatively Settle Big Part of Case

The biggest insurance company being sued by Dow Corning Corp. for refusing to pay breast implant claims settled a large part of the billion-dollar case Monday.

The tentative settlement with American International Group Inc. came after three months of testimony and just days before the case was scheduled to go to the jury.

Terms of the deal were not disclosed. It involves only some of the policies in dispute among Dow Corning, American International and its subsidiaries, attorneys said.

Robert Marsac, an attorney for Dow Corning, said the settlement represents a significant portion of the case. The company has about $389 million worth of coverage at issue in the trial.

The Wayne County (Mich.) Circuit Court trial involves claims for as much as $1 billion, including the costs of settling and defending against lawsuits filed by women who allege their breast implants were defective.

Jurors were not told of the settlement, which still must be approved by the U.S. Bankruptcy Court in Bay City, Mich. Dow Corning has said it sought Bankruptcy Court protection from creditors in May, in part because its insurers failed to help pay its defense costs.

Dow Corning spokeswoman Barbara Muessig said the agreement probably will be filed later this week and that the details will be made public then.

Norman Watkins, an attorney for American International, declined to comment on the settlement.

American International, based in New York, is the nation’s largest underwriter of commercial and industrial insurance. Subsidiaries involved in the Dow Corning trial are AIU Insurance Co., Insurance Co. of the State of Pennsylvania, National Union Fire Insurance Co. of Pittsburgh, Lexington Insurance Co., Granite State Insurance Co., and American Home Assurance Co.

They are among more than 40 companies that sold liability coverage to Dow Corning between 1962 and 1985, then refused to pay claims after the silicone-maker was deluged with implant lawsuits in 1992. Tens of thousands of women have sought damages for ailments they allege were caused by their implants.

The insurers allege Dow Corning concealed information that cast doubt on the implants’ safety. Their attorneys have cited internal company memos noting the implants’ tendency to “bleed” silicone gel and problems with “contracture,” a side effect in which tissue around the implant hardens.

Dow Corning maintains the implants are safe. Both sides have agreed that there is no scientific evidence that the devices cause immune-related diseases, as has been alleged by many of the women suing the company.

Closing arguments are scheduled to resume Wednesday. The case is expected to go to the jury of seven men and three women by week’s end.

Midland, Mich.-based Dow Corning, which no longer makes implants, is co-owned by Dow Chemical Co. and Corning Inc.