Dow Chemical 2011 Annual Report Download - page 166

72
Union Carbide’s receivable for insurance recoveries related to its asbestos liability was $40 million at December 31, 2011
and $50 million at December 31, 2010. At December 31, 2011 and December 31, 2010, all of the receivable for insurance
recoveries was related to insurers that are not signatories to the Wellington Agreement and/or do not otherwise have agreements
in place regarding their asbestos-related insurance coverage.
In addition to the receivable for insurance recoveries related to its asbestos liability, Union Carbide had receivables for
defense and resolution costs submitted to insurance carriers that have settlement agreements in place regarding their asbestos-
related insurance coverage. The following table summarizes Union Carbide’s receivables related to its asbestos-related liability:
Receivables for Asbestos-Related Costs at December 31
In millions
Receivables for defense costs – carriers with settlement agreements
Receivables for resolution costs – carriers with settlement agreements
Receivables for insurance recoveries – carriers without settlement agreements
Total
2011
$ 20
158
40
$ 218
2010
$ 12
236
50
$ 298
After a review of its insurance policies, with due consideration given to applicable deductibles, retentions and policy limits,
after taking into account the solvency and historical payment experience of various insurance carriers; existing insurance
settlements; and the advice of outside counsel with respect to the applicable insurance coverage law relating to the terms and
conditions of its insurance policies, Union Carbide continues to believe that its recorded receivable for insurance recoveries
from all insurance carriers is probable of collection.
Summary
The amounts recorded by Union Carbide for the asbestos-related liability and related insurance receivable described above were
based upon current, known facts. However, future events, such as the number of new claims to be filed and/or received each
year, the average cost of disposing of each such claim, coverage issues among insurers, and the continuing solvency of various
insurance companies, as well as the numerous uncertainties surrounding asbestos litigation in the United States, could cause the
actual costs and insurance recoveries for Union Carbide to be higher or lower than those projected or those recorded.
Because of the uncertainties described above, Union Carbide’s management cannot estimate the full range of the cost of
resolving pending and future asbestos-related claims facing Union Carbide and Amchem. Union Carbide’s management
believes that it is reasonably possible that the cost of disposing of Union Carbide’s asbestos-related claims, including future
defense costs, could have a material impact on Union Carbide’s results of operations and cash flows for a particular period and
on the consolidated financial position of Union Carbide.
It is the opinion of Dow’s management that it is reasonably possible that the cost of Union Carbide disposing of its
asbestos-related claims, including future defense costs, could have a material impact on the Company’s results of operations
and cash flows for a particular period and on the consolidated financial position of the Company.