Travelers 2010 Annual Report Download - page 244

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. LEASES
Rent expense was $206 million, $211 million and $220 million in 2010, 2009 and 2008, respectively.
Future minimum annual rental payments under noncancellable operating leases for 2011, 2012,
2013, 2014, 2015 are $159 million, $136 million, $100 million, $79 million, $64 million, respectively, and
$75 million for 2016 and thereafter. Future sublease rental income aggregating approximately $6 million
will partially offset these commitments.
15. CONTINGENCIES, COMMITMENTS AND GUARANTEES
Contingencies
This section describes the major pending legal proceedings, other than ordinary routine litigation
incidental to the business, to which the Company or any of its subsidiaries is a party or to which any of
the Company’s properties is subject.
Asbestos- and Environmental-Related Proceedings
In the ordinary course of its insurance business, the Company receives claims for insurance arising
under policies issued by the Company asserting alleged injuries and damages from asbestos- and
environmental-related exposures that are the subject of related coverage litigation, including, among
others, the litigation described below. The Company continues to be subject to aggressive asbestos-
related litigation. The Company is defending asbestos- and environmental-related litigation vigorously
and believes that it has meritorious defenses; however, the outcomes of these disputes are uncertain. In
this regard, the Company employs dedicated specialists and aggressive resolution strategies to manage
asbestos and environmental loss exposure, including settling litigation under appropriate circumstances.
Asbestos Direct Action Litigation—In October 2001 and April 2002, two purported class action suits
(Wise v. Travelers and Meninger v. Travelers) were filed against Travelers Property Casualty Corp. (TPC)
and other insurers (not including The St. Paul Companies, Inc. (SPC)) in state court in West Virginia.
These and other cases subsequently filed in West Virginia were consolidated into a single proceeding in
the Circuit Court of Kanawha County, West Virginia. The plaintiffs allege that the insurer defendants
engaged in unfair trade practices in violation of state statutes by inappropriately handling and settling
asbestos claims. The plaintiffs seek to reopen large numbers of settled asbestos claims and to impose
liability for damages, including punitive damages, directly on insurers. Similar lawsuits alleging
inappropriate handling and settling of asbestos claims were filed in Massachusetts and Hawaii state
courts. These suits are collectively referred to as the Statutory and Hawaii Actions.
In March 2002, the plaintiffs in consolidated asbestos actions pending before a mass tort panel of
judges in West Virginia state court amended their complaint to include TPC as a defendant, alleging
that TPC and other insurers breached alleged duties to certain users of asbestos products. The
plaintiffs seek damages, including punitive damages. Lawsuits seeking similar relief and raising similar
allegations, primarily violations of purported common law duties to third parties, have also been
asserted in various state courts against TPC and SPC. The claims asserted in these suits are collectively
referred to as the Common Law Claims.
The federal bankruptcy court that had presided over the bankruptcy of TPC’s former policyholder
Johns-Manville Corporation issued a temporary injunction prohibiting the prosecution of the Statutory
Actions (but not the Hawaii Actions), the Common Law Claims and an additional set of cases filed in
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