third party nuclear liability insurance richard d. jones director, underwriting american nuclear...

Third Party Nuclear Liability Insurance

Richard D. JonesDirector, UnderwritingAmerican Nuclear Insurers

American Nuclear InsurersAmerican Nuclear Insurers

Voluntary unincorporated Joint Underwriting Association – Nuclear Insurance Pool

Located in Glastonbury, Connecticut

28 Staff Members

Founded in 1956

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ANI issues insurance policies that provide policyholders coverage for claims for nuclear bodily injury and nuclear property damage from people who live, work, and own homes and businesses near insured nuclear facilities.

ANI’s Primary Purpose:

American Nuclear Insurers

ANI Book of BusinessANI Book of Business

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Price-Anderson Enacted Price-Anderson Enacted In 1957 To:In 1957 To:

Encourage The Private Development Of Nuclear Power.

Establish A Legal Framework For Potential Liability Claims.

Provide A Ready Source Of Funds To Compensated Injured Victims Of A Nuclear Accident.

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ANI is founded in 1956 Initial Capacity is $60 million Federal Government provides a second layer of

coverage of $500 million

Nuclear Insurance Pooling System Nuclear Insurance Pooling System EstablishedEstablished

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Definition of Insured

Policy Period and Limits

Defense Costs Within Limits

Three Fundamental Coverage Three Fundamental Coverage ConceptsConcepts

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First Three Renewals

1967 – Definition of Extraordinary Nuclear Occurrence

(“ENO”) 1977 –

Second Layer of Financial Protection Added $ 5 million per operating reactor

1988 – Definition of public liability expanded to include some costs

of evacuation

Price-Anderson ActPrice-Anderson Act

Liability Coverage “D”Liability Coverage “D”

Food Shelter Transportation Police Services

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Reasonable additional costs for

For Time Evacuation Order Is In Effect + 30 Days

2005…2005…

Price-Anderson renewed for 20 years Maximum Annual Retro increased from $10

million to $15 million Both maximum annual and total retro obligations

now subject to inflation adjustment Current Amounts:

$117.495 million per reactor payable at $17.5 million per year

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Evolution of Limits...Evolution of Limits...

Financial Protection

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Growth in Nuclear Liability LimitsGrowth in Nuclear Liability Limits1957 - 19771957 - 1977

ANI: $60 Million

Govt. Indemnity: $500 Million SFP: $310 Million

Govt. Indemnity: $110 Million

19771957

ANI: $140 Million

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ANI

SFPGovt. Indemnity

Growth in Nuclear Liability

Limits

1977 - 2007

2008 Limit: $12.519 Billion

1977 Limit: $560 Million 14

Accident at Three Mile IslandAccident at Three Mile Island

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TMI - The first two days...TMI - The first two days...

March 28, 1979• 0400 Accident Occurs• 0730 ANI Notified

March 29, 1979• ANI Personnel Arrive In

Pennsylvania• Local Claims Office

Authorized• 51 Claims Adjusters

Recruited From Member Companies

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TMI - Evacuation AdvisoryTMI - Evacuation Advisory

March 30, 1979 • Pennsylvania Governor

Richard Thornburgh Issues An Advisory Evacuation Notice

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TMI - Opening of the TMI - Opening of the Claim OfficeClaim Office

• ANI’s claim office is open for business within 20 hours of the Advisory Evacuation Notice.

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TMI - ANI ResponseTMI - ANI Response

ANI alerts media (television, radio and newspapers) of the location of the claims office.

More than $1 million in evacuation claims will be paid.

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Three Mile Island:Breakdown of Claims Payments and Claims Expense Payments

20Total Payout: Approx. $71 million

Terrorism CoverageTerrorism Coverage

ANI Covers Terrorism Losses Subject To The Terms And Conditions Of Our Policies And Certified By The Terrorism Risk Insurance Act Of 2002 (TRIA).

An Industry Aggregate Limit Applies To Losses From Terrorism Not “Certified” By TRIA.

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Ten Most Common QuestionsTen Most Common Questions

1. Can evacuated people go to a hotel or motel?

2. How are burglary or looting losses covered if they occur after evacuation?

3. Is loss of business by stores, restaurants, etc. due to evacuation covered?

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Ten Most Common Questions Ten Most Common Questions

4. Do claimants have to hire lawyers?

5. Are volunteers or expenses by volunteers (amateur radio operators, Red Cross, etc.) reimbursed?

6. How are losses to crops or farm products handled? What about product boycotts?

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Ten Common QuestionsTen Common Questions

7. How does ANI determine where the claims office will be set up?

8. How is the claims office operated? What kind of information will be required of claimants?

9. If there is a vehicle accident during evacuation, how is it covered?

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Ten Common QuestionsTen Common Questions

10. How will ANI coordinate payments for evacuees with similar payments made by FEMA?

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