Travelers 2013 Annual Report Download - page 253

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. LEASES (Continued)
Future minimum annual rental payments under noncancellable operating leases for 2014, 2015,
2016, 2017 and 2018 are $178 million, $160 million, $137 million, $106 million and $69 million,
respectively, and $166 million for 2019 and thereafter. Future sublease rental income aggregating
approximately $6 million will partially offset these commitments.
16. CONTINGENCIES, COMMITMENTS AND GUARANTEES
Contingencies
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 are described below.
Asbestos- and Environmental-Related Proceedings
In the ordinary course of its insurance business, the Company has received and continues to
receive 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 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),
a wholly-owned subsidiary of the Company, and other insurers (not including The St. Paul
Companies, Inc. (SPC), which was acquired by TPC in 2004) 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.
In response to these claims, TPC moved to enjoin the Statutory Actions and the Common Law
Claims in the federal bankruptcy court that had presided over the bankruptcy of TPC’s former
policyholder Johns-Manville Corporation on the ground that the suits violated injunctions entered in
connection with confirmation of the Johns-Manville bankruptcy (the ‘‘1986 Orders’’). The bankruptcy
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