Honeywell 2011 Annual Report Download - page 96

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Year Ended December 31,
Claims Activity 2011 2010
Claims Unresolved at the beginning of year 22,480 19,940
Claims Filed(a) 3,592 4,302
Claims Resolved(b) (3,501) (1,762)
Claims Unresolved at the end of year 22,571 22,480
(a) The number of claims filed in 2010 includes approximately 1,541 non-malignant claims (with an accrued liability of approximately $575 thousand in the
aggregate), a majority of which had previously been dismissed in Mississippi and re-filed in Arkansas.
(b) The number of claims resolved in 2011 includes approximately 351 claims previously classified as inactive (82% non-malignant and accrued liability of
approximately $1.7 million) which were activated during 2011. The number of claims resolved in 2010 includes approximately 1,300 claims previously
classified as inactive (95% non-malignant and accrued liability of approximately $2.0 million) which were activated during 2010.
December 31,
Disease Distribution of Unresolved Claims 2011 2010
Mesothelioma and Other Cancer Claims 4,943 4,856
Nonmalignant Claims 17,628 17,624
Total Claims 22,571 22,480
Honeywell has experienced average resolution values per claim excluding legal costs as follows:
Year Ended December 31,
2011 2010 2009 2008 2007
(in whole dollars)
Malignant claims $ 48,000 $ 54,000 $ 50,000 $ 65,000 $ 33,000
Nonmalignant claims $ 1,000 $ 1,300 $ 200 $ 1,500 $ 500
It is not possible to predict whether resolution values for Bendix related asbestos claims will increase, decrease or stabilize in the future.
Our consolidated financial statements reflect an estimated liability for resolution of pending (claims actually filed as of the financial statement date) and
future Bendix related asbestos claims. We have valued Bendix pending and future claims using average resolution values for the previous five years. We
update the resolution values used to estimate the cost of Bendix pending and future claims during the fourth quarter each year.
The liability for future claims represents the estimated value of future asbestos related bodily injury claims expected to be asserted against Bendix over
the next five years. Such estimated cost of future Bendix related asbestos claims is based on historic claims filing experience and dismissal rates, disease
classifications, and resolution values in the tort system for the previous five years. In light of the uncertainties inherent in making long-term projections, as
well as certain factors unique to friction product asbestos claims, we do not believe that we have a reasonable basis for estimating asbestos claims beyond the
next five years. The methodology used to estimate the liability for future claims is similar to that used to estimate the future NARCO related asbestos claims
liability.
Our insurance receivable corresponding to the liability for settlement of pending and future Bendix asbestos claims reflects coverage which is provided
by a large number of insurance policies written by dozens of insurance companies in both the domestic insurance market and the London excess market.
Based on our
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