St. Paul to Settle Asbestos Lawsuit

Insurer St. Paul Cos. said it would pay nearly $1 billion, before tax and reinsurance recoveries, to settle litigation over asbestos coverage for Western Asbestos Co., which a St. Paul unit insured in the 1960s.

St. Paul said the settlement--one of the largest agreed to by an insurer over asbestos--would cut earnings by about $380 million after tax and recovering reinsurance coverage from other firms.

The St. Paul-funded settlement calls for Western Asbestos, and units of Western MacArthur that bought parts of that firm in 1967, to enter bankruptcy and for St. Paul to pay the money into a trust that will compensate victims of diseases caused by asbestos distributed by those companies.

The insurer’s shares closed down 99 cents at $41.62 on the New York Stock Exchange.