Travelers 2014 Annual Report Download - page 105

Table of Contents
afforded by Section 524(g) of the Bankruptcy Code from certain asbestos
- related bodily injury claims. Under the agreement in principle, the
Company has the option to make a series of payments over the next 20 years totaling approximately $620 million to the Trust to be created under
the Amended Plan, or it may elect to make a one
- time discounted payment, which, as of March 31, 2015, would total approximately $505 million
(approximately $476 million after reinsurance). The agreement in principle with PPG is subject to numerous contingencies, including final court
approval of the Amended Plan, and the Company has no obligation to make the settlement payment until all contingencies are satisfied. The
Company's obligations under this agreement in principle are included in the "home office and field office" category in the preceding table.
The following table displays activity for asbestos losses and loss expenses and reserves:
ENVIRONMENTAL CLAIMS AND LITIGATION
The Company has received and continues to receive claims from policyholders who allege that they are liable for injury or damage arising out
of their alleged disposition of toxic substances. Mostly, these claims are due to various legislative as well as regulatory efforts aimed at
environmental remediation. For instance, the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), enacted in 1980
and later modified, enables private parties as well as federal and state governments to take action with respect to releases and threatened releases
of hazardous substances. This federal statute permits the recovery of response costs from some liable parties and may require liable parties to
undertake their own remedial action. Liability under CERCLA may be joint and several with other responsible parties.
104
(at and for the year ended December 31, in millions)
2014
2013
2012
Beginning reserves:
Gross
$
2,606
$
2,689
$
2,780
Ceded
(256
)
(311
)
(341
)
Net
2,350
2,378
2,439
Incurred losses and loss expenses:
Gross
258
190
171
Ceded
(8
)
—
4
Net
250
190
175
Paid loss and loss expenses:
Gross
343
273
262
Ceded
(101
)
(55
)
(26
)
Net
242
218
236
Foreign exchange and other:
Gross
(1
)
—
—
Ceded
—
—
—
Net
(1
)
—
—
Ending reserves:
Gross
2,520
2,606
2,689
Ceded
(163
)
(256
)
(311
)
Net
$
2,357
$
2,350
$
2,378
See "—Uncertainty Regarding Adequacy of Asbestos and Environmental Reserves."