(Adds detail from committee discussion, byline)
By Susan Cornwell
WASHINGTON, June 19 (Reuters) - U.S. Senators considering a national fund to compensate asbestos victims on Thursday agreed that insurance payments would not reduce payouts by the fund, but said they were still haggling over other features.
The chief architect of the proposal, Utah Republican Sen. Orrin Hatch, agreed to the change and several others as he sought to win the support of more Democrats and organized labor for his effort to reform the asbestos liability system.
Hatch also said he had reached agreement with two Democratic senators, Dianne Feinstein of California and Patti Murray of Washington, on including a "responsible ban" of asbestos-related products that may still be in use.
The Senate Judiciary Committee chaired by Hatch was expected to vote on some of these proposals later on Thursday.
Concerns remained about whether the proposed $108 billion fund could run out of money and other issues. Hatch said the panel may need several more days before taking a final vote.
"A lot of progress has been made, but we also don't have every issue resolved to the satisfaction of all committee members at this time," said Hatch, as the panel met to consider the proposal.
Asbestos was widely used for fireproofing and insulation until the 1970s, when scientists concluded that inhaled fibers could be linked to cancer and other diseases.
Hundreds of thousands of asbestos claims clogging U.S. courts have driven more than 60 companies into bankruptcy. Hatch's proposal would take claims out of the courts and use the fund, supported by industry and businesses, to pay them.
Sen. Patrick Leahy of Vermont, the ranking Democrat on the committee, welcomed the idea of limiting compensation deductions to past settlements or court judgments for the same injury.
But he wanted more time for negotiations to address whether $108 billion was adequate and suggested the committee might need until mid-July to work on the trust fund proposal.
"The money cannot simply dry up and victims be left holding the bag." said Leahy.
Other changes Hatch said he was willing to make in his bill included indexing to inflation the values of awards made by the fund and striking a proposed 1982 cutoff date for exposure to asbestos.
He also favored setting up a new "exceptions" panel to examine claimants who do not meet medical criteria for compensation, but may have a special case that merits review.
Hatch said some medical aspects, such as whether colorectal cancer is caused by exposure to asbestos, could be examined by the Institute of Medicine, part of the National Academy of Sciences, an independent group of scholars that advises the government.