ML19259B886
| ML19259B886 | |
| Person / Time | |
|---|---|
| Issue date: | 04/02/1979 |
| From: | Chilk S NRC OFFICE OF THE SECRETARY (SECY) |
| To: | |
| Shared Package | |
| ML19259B885 | List: |
| References | |
| NUDOCS 7904240498 | |
| Download: ML19259B886 (34) | |
Text
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I!UCLEAR REGULATORY COMiiISSI0i:
[10 CFR Part 140]
Fli!AtlCIAL PROTECTION REQ'JIREMEi;TS AftD It! DEMI!ITY AGREEllEilTS Miscellaneous Amendments AGEi:CY:
U. S. fluclear Regulatory Commission ACT10il:
Proposed rule SC' MARY:
The Nuclear Regulatory Co:rmission is considering amending its regulations relating to the financial protection and indemnity that it requires of its licensees to implement legislation that modified and extended for ten years (to August 1,1987) the present Price-Anderson legislation.
DATES:
Public corments on this notice must be submitted on or before June 5,1979 Written comments should be submitted to the Secretary of the Commission, U. S. ?!uclear Regulatory Commission, Washington, D.C. 20555, Attention: Docketing and Service Branch.
FOR FURTHER INFORiiATI0tl C0itTACT:
Mr. Ira Dinitz, Office of Nuclear Reactor Regulation,
".S. Nuclear Regulatory Commission, Washington, D.C.
20555, phone 301-492-8336.
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SJ?PLEMEtiTARY 1:;FOR:',ATIO:1:
In order to. complete implementation of certain provisions of Public Law 94-197, legislation enacted on December 31, 1975 which modified and extended to August 1,1987 the Price-Anderson Act (P.L.85-255), the t;uclear Regulatory Commission must codify in 10 CFR Part 140, a 3 andard master policy form which the Commission determines to be adequate proof that a licensee is maintaining the necessary secondary financial protection required by the Commission pursuant to subsection 170b. of the Atomic Energy Act of 1954, as amended. This standard master policy form was submitted by the !!uclear Energy Liability-Property Insurance Association (an additional policy identical to the published policy except that it contains supplemental money amounts has been submitted by the Mutual Atomic Energy Liability Underwriters but will not be published separately.
The proposed rule, however, applies to both policies.)
Sunsection 17Cb. establishes a mechanism -- payment of a retrospective premium -- whereby the utility industry would share liability for any damages exceeding the maximum liability insurance available from private sources, currently $160 million, that might result from a nuclear incident.
In the event of a nuclear incident causing damages exceeding 5160 million, each licensee of a commercial reactor rated at 100 electrical megawatts or more would be assessed a prorated share of damages of up to the statutory maximum of 55 million per reactor per incident.
2074 295
Since August 1, 1977 the Commission has utilized a binder furnished by these two insurance pools as evidence of secondary financial protection.
The use of the binder was necessary because the. pools were not prepared to put the master policy in final form.
The binder is being used in the interim.
The binder is almost identical to the standard master policy form and in the staff's view meets all the requirements for implementation of P. L.94-197.
The pools have informed the staff that drafts of the master policy have been commented on by their utility clients and other organizations and all comments made by these organizations have been accommodated.
The proposed rule making is to solicit public comments on the policy.
Both the master secondary financial protection policy and the accompanying certificate of insurance, which names the utility insureds, establish the terms and conditions under which the insureds are responsible for the pay. Tent of the retrospective premium and, in addition, establish the liability of the insurance pools for the non-payment of the premiums in the event of default by the insureds.
The secondary financial policy establishes the conditions under which the retrospective insurance premium becomes payable and contains additional terms and conditions for (1) establishing, as previously mentioned, the total contingent liability of the insuring companies in the event of retrospective premium defaults; (2) establishing the requirements with which the insureds must comply in notifying the insuring companies of a nuclear incident; (3) establishing 20/4
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the rights of recovery by the' insuring companies for any policy and (4) cancellation conditions for both the insuring companies arj insureds.
o Although the cost of investigating and settling liability claims and defending suits for damage is retained as a part of financial protection, (i.e., nuclear liability insurance), the proposed rule modifies certain sections of 10 CFP. Part 140 in conformance with Public Law 94-197 to exclude these costs from government indemnity.
The master secondary financial protection policy includes the same treatment of these costs.
Finally, since the amendments to Parc 140 me, rely implement a statute, good cause exists for omitting a value/ impact analysis.
Pursuant to the Atcmic Energy Act of 1954, as amended, the E.,ergy Reorganization Act of 1974, as amended, and sections 552 and 553 of Title 5 of the United States Code, the following amendment; to Title 10, Chapter I, Part lfD, Code of Federal Regulations, are published as a document subject to codification.
1.
Section 140.92, Appendix B, Article II, paragraph 8(d), is amended to read as follows:
2074 297 (d) As used in this paragraph 8., Article II,,and in Article III, "other applicable agreements" means each other agreement entered into by the Commission pursuant to subsection 170c. of the Act in which agreement the nuclear incident is defined as
. a " common occurrence. " As sed in this paragraph 8., Article t
II, "the obligations of licensee" neans the obligations of the licensee under subsection 53e(8) of the Act to indemnify
, the United States and the Commission from public liability, together with any public liability satisfied by the insurers under the policy or policies designated in the Attachment, and the reasonable costs incurred by the insurers in in.vestigating and settling claims and defending suits for damage.
2.
Section 140.92, Appendix B, Article III, paragraph 3, is deleted.
3.
Section 140.92, Appendix B, Article III, paragraph 4(a), is amended by deleting the phrase "and such reasonable costs described in paragraph 3 of this Article".
4.
Section 140.92, Appendix B, Article III, paragraph 4(b), is amended by deleting the phrase "and to such reasonable costs described in parag*raph 3 of this Article".
5.
Section 140.92, Appendix B, Article IV, paragraph 1., is revised to read as follows:
1.
When the Commission determines that the United States will probably be required to make indemnity payments under the provisions of this agreement, the Commission shall have the 2074
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right to collaborate with the licensee and other persons indemnified in the settlenent and defense of any claim (provided that no government indemnity that would otherwise be available to pay public liability claims is used for these purposes) and shall have the right (a) to require the prior approval of the Commission for the settlement or payment of any claim or action asserted against the licensee or other person indemnified for public liability or damage to property of persons legally liable for the nuclear incident which claim or action the licensee or the Ccmmission may be required to indemnify under this agreement; and (b) to appear through the Attorney General of the United States on behalf of the licensee or other person indemnified, take charge of such action and settle or defend any such action.
If the settlement or defense of any such actio'n or claim is undertaken by the Commission, the licensee shall furnish all reascnable assistance in effecting a settle-ment cr asserting a defense.
6.
Section 140.93, Appendix C, Article III, paragraph 3 is deleted.
7.
Section 140.93, Appendix C, Article III, paragraph 4(a), is amended by deleting the phrase "and such reasonable costs described in paragraph 3 of this Article".
20/4
!99 8.
Section 140.93, Appendix C, ANticle III, paragraph 4(b), is amended by deleting "and to such reasonable costs described in paragraph 3 of this Article".
9.
Section 140.93, Appendix C, Article IV, paragraph 1, is revised to read as follows:
1.
When the Commission determines that the United States will probably be required to make indemnity payments under the provisions of this agreement, the Commission shall have the right to collaborate uith the licensee and other persons indemaified in the settlement and defense of any claim (pro-vided that no government indemnity that would otherwise be available to pay public liability claims is used for these purposes) and shall have the right (a) to require the prior approval of the Commission for the settlement or payment of any claim or action asserted against the licensee or other person indemnified for public liability or damage to property of persons legally liable for.he nuclear incident which claim or action the licensee or t'ie Commission may be required to indemnify under this agreement; and (b) to appear through the Attorney General of the United States on behalf of the licensee or other person indemnified, take charge of such action and settle or defend any such action.
If the settlement or defense 20/4 500 of any such action or claim i's undertaken by the Commission, the licensee shall furnish all reasonable assistance in effecting a settlement or asserting a defense.
10.
Section 140.94, Appendix D, Article I, paragraph 6, is amended by deleting:
"During the period 12:01 a.m.,.... to 12:01 a.m., September 6, 1961, inclusive:
'Public liability' means any legal liability arising out of or resulting from a nuclear incident, except (1) claims under state or Federal Workmen'<, Compensation Acts of e.mployees of persons indemnified who are employed (a) at the location or, if the nuclear incident occurs in the course of transportation of the radioactive material, on the transporting vehicle, and (b) in connection with the licensee's possession, use, or transfer of the radioactive material; and (2) claims arising out of an act of war.
From 12:01 a.m., September 6,1961:"
'Section 140.94, Appendix D, Article II, paragraph 3 is deleted.
11.
12.
Section 140.94, Appendix D, Article II, paragraph 6, is amended by deleting the phrase "and to such reasonable costs descrioed in paragraph 3 of this Article".
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13.
Section 140.94, Appendix D, Artici.e III, paragraph 1, is revised to read a-follows:
1.
When the Commission determines that the United States will probably be required to make indemnity payments under the provisions of this agreement, the Commission shall have the right to collaborate with the licensee and other persons indemnified in the settlement and defense of any claim (provided that no government indemnity chat would otherwise be available to pay public liability claims is used for these purposes) and shall have the right (a) to require the prior approval of the Commission for the settlement or payment of any claim or action asserted against the licensee or other person indemnified for public liability or damage to property of persons legally liable for i nuclear incident which claim or action the licensee or the Commission may be required to indemnify under this agreement; and (b) to appear through the Attorney General of the United States on behalf of the licensee or other person indemnified, take charge of such action and settle or defend any such action.
If the settlement or defense of any such action or claim is undertaken by the Commission, the licensee shall furnish all reasonable assistance in effecting a settle-ment or asserting a defense.
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14.
Section 140.95, Appendix E, Article I, paragraph 6 is amended by deleting:
"During the period 12:01 a.m...... to 12:01 a.m., September 6, 1961, inclusive:
'Public liability' means any legal liability arising out of or resulting from a nuclear incident, except (1) claims under state or Federal Workmen's Compensation Acts of employees of persons indemnified who are employed (a) at the location or, if the nuclear incident occurs in the course of transportation of the radioactive material, on the transporting vehicle, and (b) in connection with the licensee's possession, use, or transfer of the radioactive material; and (2) claims arising out of an act of war.
From 12:01 a.m., September 6,1961:"
15.
<ection 140.95, Appendix E, Article III, paragraph 3, is deleted.
16.
Section 140.95, Appendix E, Article III, paragraph 4(a), is amended by deleting the phrase "and such reasonable costs described in paragraph 3 of this Article".
17.
Section 140.95, Appendix E, Article III, paragraph 4(b), is amended by deleting the phrase "and to such reasonable costs described in paragraph 3 of this Article".
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. s 18.
Section 140.95, Appendix E, Article I'!, paragraph 1, is revised to read as follows:
1.
When the Commission determines that the United States will probably be required to make indemnity payments under the provisions cf this agreement, the Commission shall have the right to collaborate with the licensee and other persons indemnified in the settlement and defense of any claim (provided that no government indemnity that would otherwise be available to pay public liability claims is used for these purposes) and shall have the right (a) to require the prior approval of the Commission for the settlement or payment of any claim or action asserted against the licensee or other person indemnified for public liability or damage to property or persons legally liable for the nuclear ir--ident which claim or action the licensee or the Commission may be required to indemnify under this agreement; and (b) to appear through the Attorney General of the United States on behalf of the licensee or other person indemnified, take charge of such action and settle or defend any such action.
If the settlement or defense of any such action or claim is undertaken by the Commission, the licensee shall furnish all reasonable assistance in effe. ling a settle-ment or asserting a defense.
2074 504 19.
Section 140.107, Appendix G, Article II, paragraph 6(d), is revised to read as ftllows:
(d) As used in this paragraph 6., Article II, and in Article III,"
other applicable agree:aents means each other agreement entered into by the Commission pursuant to subsection 170c. of the Act in which agreement the nuclear incident is defined as a " common occurrence."
As used in this paragraph 6., Article II, "the obligations of ti;e licensee" means the obligations of the licensee under subsection 53e(8) of the Act to indemnify the United States and the Commission from public liability, together with any public liability satisfied by the insurers under the policy or policies designated in the Attachment, and the reasonable costs incurred by the insurers in investigating and settling claims and defending suits for damage.
20.
Section 140.107, Appendix G, Article III, paragraph 3, is deleted.
21.
Section 140.107, Appendix G, Article III, paragraph 4(a), is amended by deleting the phrase "and such reasonable costs described in paragraph 3 of this Article".
22 Section 140.107, Appendix G, Article III, paragraph 4(b), is amended by deleting the phrase "and to such reasonable costs described in paragraph 3 of this Article, as in the aggregate exceed $160,000,000".
20/4 505 23.
Section 140.107, Appendix G, Article IV, paragrapn 1, is amended to read as follows:
1.
When the Commission determines that the United States will probably be required to make indemnity payments under the provisions of this agreement, the Commission shall have the right to collaborate with the licensee and other persons indemnitied in the settlement and defense of any claim (provided that no government indemnity that'would otherwise be available to pay public liability claims is used for these purposes) and shall ha've the right (a) to require the prior approval of the Commission for the settlement or payment of any claim or action asserted against the licensee or other person indemnified for public liability or damage to property of persons legally liable for the nuclear incident which claim or action the licensee or the Com *ission may be required to indemnity under this agreement; and (b) to appear through the Attorney General of the United States on behalf of the licensee or other person indemnified, take charge of such action and settle or defend any such action.
If the settlement or defense of any such action or claim is undertaken by the Commission, the licensee shall furnish all reasonable assistance in effecting a settlement or asserting a defense.
2074 306 6
24.
Section 140.108, Appendix H, ' Article II, paragraph 3, is amended by deleting the phrase " including the reasonable costs of investigating and settling claims and defending suits for damage."
25.
Section 140.108, Appendix H, Article III, paragraph 3, is deleted.
26.
Section 140.108, Appendix H, Article III, paragraph 4(a), is amended by deleting the phrase "and such reasonable costs described in paragraph 3 of this Article."
27.
Section 140.108, Appendix H, Article III, paragraph 4(b), is amended by deleting the phrase "and to such reasonable costs described in paragraph 3 of this Article, as in the aggregate exceed $160,000,000".
28 Section 140.108, Appendix H, Article IV, paragraph 1, is revised to read as follows:
1.
When the Commission determines that the United States will probably be required to make indemnity payments under the provisions of this agreement, the Commission shall have the right to collaborate with the licensee and other persons indemnified in the settlement and defense of any claim (provided that no government indemnity that would otherwise be available to pay public liability claims is used for these purposes) and 2074 507 shall have the right (a) to require the prior approval of the Commission for the settlement or payment of any claim or action asserted against the licensee or other person indemnified for public liability or damage to property of persons legally liable for the nuclear incident which claim or action the licensee or the Commission may be required to indemnify under this agreement; and (b) to appear through the Attorney General of the United States on behalf of the licensee or other person indemnified, take charge of such action and settle or defend any such action.
If the settlement cr defense of any such action or claim is unde"taken by the Commission, the licensee
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shall furnish all reasonable assistance in effecting a settle-ment or asserting a defense.
29.
A new Section 140.109, Appendix I, is added to read as follows:
2074 508 t
5 1*0.109 Appendix I fiUCLEAR E.'; ERG 7 LIABILITY ItlSURA,CE ASSOCIATION 11 ASTER POLICY tt0.
ilUCLEAR Ef!ERGY LIABILITY ItlSURAf;CE (Secondary Financial Protection) flar.ed Insured:
Each Person or organization designated in Item 1 of a certificate..
Policy Period:
Beginning on the first day of August, 1977, and continuing to the effective date and time of the cancellation or other termination of this policy, eastern standard time.
Limits of Liability:
The amount of retrospective premium actual 3y received by the companies plus the amount of the companies' contingent liability, i-any, purstant to Conditions 2, 3 and I.
Date of Issuance Authorized Represer tative 20/4 509
2_
In consideration of the payment of the annual premium, in reliance upon the statements in the certificates and subject to the limits of liability, con-ditions and other terms of this Master Policy, the undersigned members of Nuclear Energy Liability Insurance Association (hereinafter calleo the
" companies"), each for itself, severally and not jointly, and in the respec-tive proportions herein set forth, and the insureds named in the certificates, agree as follows:
I N S U R I fl G AGREEMENTS I.
UUCLEAR ENERGY LIABILITY INSURA.'lCE (Secondary Financial Protection)
To pay on behalf of or to the insure _d_ or to the insured's workers' compensation carrier all sums payable as excess losses to which this Master Policy applies.
II.
DEFI:lITIONS
" bodily injury" means bodily injury, sickness or disease, including death resulting therefrom, sustained by any person.
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" certificate" means a Certificate of Insurance, including Declarations and Bond for Payment of Retrospective Premiums,, issued to be a part of thie l' aster Policy,
" common nuclear occurrence" means any occurrence or series of occurrences causing bodily injury or procerty damaae arising out of the radioactive, toxic, explosive, or other hazardous properties of nuclear material (a) discharged or dispersed from a nuclear reactor described in Item 3 of a certificate over a period of days, weeks, months, or longer, or (b) discharged or dispersed from a nuclear reactor described in Item 3 of a certificate over a period of days, weeks, months or longer and also arising out of such properties of nuclear materici so discharged or dispersed from one or more other nuclear reactors described in Item 3 of other certificates, or (c) in the course of transportation for which protection is afforded (or would be afforded but for exhaustion of 20/4 511
_?.
its limit of liability) under the primary financial orotection described in Item a of a certificate and also arising out of such properties of nuclear material in the course of transportation for which protection is afforded (or would be afforded but for exhaustion of its limit of liability) under the crimary financial protection described in Item 4 of one or more other certificates.
"damaaes and claim exoenses" includes sums estimated by the companies tr be payable under this policy and payments made by the companies under this Master Policy:
(a) in settlement of claims and in satisfaction of judgments against the insureds for damages because of bodily injury or orocerty damage; (b) for (1) costs taxed against an insured in any suit against the insured seeking damages payable under the terms of this Master Policy and interest on any judgment therein, (2) pre-miums on appeal bonds and bonds to release attachments in any such suit and (3) reasonable expenses, other than loss of earnings, incurred by the insured at the companies' request; 2074
$12
. m (c) tar expenses incurred in the investigation, negotiation, settlement and defense of any claim or suit including, bu.t no,t limited to, the cost of such services by salaried s
employees of the companies, fees and expenses of independent adjusters, attorneys' fees and disbursements, expenses for expert testimony, inspection and appraisal of property, ex-amination, X-ray or autopsy or medical expenses of any kind;,
(d) for expenses incurred by the companies in investigating a nuclear incident or in minimizing its effects; (e) for all other expenses of the companies in fulfilling their obligations under this flaster Policy, provided that such expenses are reasonable and necessary.
" excess losses" means all damaces and claim exoenses (a) because of bodily injury or property damage to which a certificate applies, and (b) which'are excess of all sums paid or payable as estimated p
by the companies under all applicable primary financial protection.
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" extraordinary nuclear occurrence," has the meaning given it in the Atomic Energy Act of 1954, or in any law amendatory thereof.
" insured" means any person or organization identified in Items 1 or 2 of a certificate.
" nuclear incident" means (a) an extraordinary nuclear occurrence, or (b) a common nuclear occurrence, or if neither of these, (c) an occurrence or series of occurrences, including contin-uous or repeated exposure to substantially the same general conditions, causing bodily injury or crocerty damaae arising out of the radioactive, toxic, explosive, or other hazardous properties of nuclear material.
" nuclear material" means source material, special nuclear material or byoroduct material.
" primary financial protection" means the insurance policies or other contracts identified in Item 4 of a certificate and includes 2074 314
. any amendment thereto which i$ consented to by the companies pursuant to Condition 6 of this flaster Policy.
" property damage" means physical injury to or destruction or radio-active contamination of property, and loss of' use of property so injured, destroyed or contaminated, and loss of use of property while evacuated or withdrawn from use because possibly so contaminated or because of imminent danger of such contamination.
" source material", "soecial nuclear material", and " byproduct material" have the meanings given them in the Atc.nic Energy Act of 1954, or in any law acendatory thereof.
II:.
APPLICATION OF POLICY Insurance is provided by this Master Policy only through a certificate.
flo insurance is af forded with respect to bodily injury or property damage caused prior to August 1,1977 by a nuclear incident.
C0NDITI0NS 1.
AN!iUAL PP.Ef1IUf1 The named insureds designated in a certificate shall pay to the companies the annual premium for each calendar year or part thereof.
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Such annual premium shall be determined by the companies and stated in a written notice mailed to the first named insured shown in Item 1 of a certificate, and shall be due and payable as stated in such notice.
2.
RETROSPECTIVE PREMIUM The named insureds designated in a certificate shall pay to the companies retrospective premium in the event of excess losses due to bodily injury or orocerty damage caused during their certificate period by a nuclear incident arising out of or in connection with a nuclear reactor described in Item 3.of the certificate or in Item 3 of any other certificate.
The amount of retrospective premium due under each certificate shall be determined by multiplying such excess losses by the ratio of the maximum retrospective premium payable with respect to the nuclear incident under the certificate to the total of the maximum retrospective premiums payable with respect tc the nuclear incident under all such certificates.
If any portion of the bodily injury or procerty damage to which this Master Policy applies is caused during any portion of a certificate period by a nuclear incident, the retrosoective premium the named insureds designated in such certificate are obligated to pay 2074
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shall be determined as if all bodily injury or orocerty damace to which this Master Policy applies caused by the nuclear incident had been caused during the certificate period of such certificate.
The maximum retrospective premium that the named insureds designated in a certificate shall pay to the companies for all excess losses arising out of any one nuclear incident is the amount stated in Item 7 of their certificate.
In the event of two or more nuclear incidents, the maximum amount of retrospective premium that sriali be cue from and payable by the named insureds in one calendar year shall not exceed twice the amount stated in Item 7 of their certificate.
Any amount in excess thereof shall be paid in subsequent calendar years as billed by the companies.
In addition, an allowance for applicable premium taxes shall be determined by the companies and paid to them by the named insureds at the time retrospective premiums are due and payable.
After a nuclear incident resulting in excess losses, ti, companies shall nail to the first named insured designated in Item 1 of a certificate 20/4 317
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written notice of the retrospective premium and allowance for premium taxes then due under such certificate.
Such notice shall also constitute notice to all other named insureds designated in such certificate.
The named insureds shall pay directly to the Nuclear Energy Liability Insurance Association the retrospective premie and allowance for premium taxes stated in the notice.
The notice shall_ specify a date no earlier than 60 days after mailing by which time payment is to be received by the fluclear Energy Liability Insurance Assoc i:fon.
The companies shall at least annually review their estimate of excess losses arising out of the nuclear incident and shall adjust the retro-spective premium and allowance for premium taxes accordingly.
If the amount due from the named insureds is increased, written notice shall be mailed to the first named insured in accordance with the foregoing paragraph; if decreased, the companies shall return the excess to the first named insured.
The obligation of the named insureds to pay retrospective. premium and the allowance for premium taxes for excess losses arising out of a nuclear incident shall continue until the named insuredt have paid the maximum retrospective premium stated in Item 7 of their certificate plus allowance for premium taxes.
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The companies shall send to the Nuclear Regulatory Commission summaries of their estimates of excess losses arising out of the nuclear incident and their computations of retrospective premium and the allowance for premium taxes due.
All retrospective premium (but not the allowance for premium taxes) received by the companies is to be held by the companies separate from the companies' other assets and is to be used by the companies only for the purpose of paying excess losses.
Any investment income received by the companiet from such retrospective premium shall accrue to the benefit of the named insureds.
This paragraph shall not apply to any retrospective premium received by the companies as reimbursement for any funds expended pursuant to Condition 4.
No commission will be paid with respect to.etrospective premium and allowance for premium taxes.
3.
LIMIT OF LIABI'.ITY Regardless of the number of (a) persons or organizations who are insureds under this 11 aster Policy, or 20/4 519
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(b) claims made and suits brought.against any and all insureds, or (c) policies or contracts of primary financial orotection or certi-ficates which apply to the nuclear incident, or (d) years this fiaster Policy and any certificate shall continue in force, the total liability of the companies under this itaster Policy for all excess losses arising out of any one nuclear incident shall not exceed the amount of retrospective premium actually received by the companies pursuant to Condition 2 with respect to such nuclear incident plus the companies' contingent liability, if any, as determined by Condition 4.
Reimbursement of the companies for funds expended pursuant to Crndition 4 shall not operate to increase the total liability of the compdnies.
4.
CONTI!1GE!!T LIABILITY OF THE COMPAttIES The companies have a contingent liability under this fiaster Policy for payment of excess losses but only if, and to the extent that, the retrospective premium due under one or more certificates is not 20/4
'20
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paid.
In the event of any such failure to pay. retrospective premiums,_
the companies' obligations under this Condition.4 are limited as follows:
Regardless of the number of nuclear incidents which cause bodily injury or property dacace to which this flaster Policy applies, the number of years this '-taster Policy is in force, the number of certificates issued or in effect, or the number of annual premiums paid or payable, (a) the total contingent liability of the companies for all excess losses arising out of two or more nuclear incidents shall not exceed $46,500,000; (b) subject to the above provision (a), the total contingent liability of the companies for all excess losses arising out of any one nuclear incident shall not exceed $23,250.000; (c) subject to the above provisions (a) and (b), the maximum amount to be paid by the companies in any one calendar year because of contingent liability for excess losses shall not exceed $23,250,000.
2074 521 If a named insured designated in a certificate shall become insolvent or be adjudged bankrupt, the companies' obligation under this Condition 4 shall not apply to the failure of any named insured designated in such certificate to pay retrospective premium with respect to excess losses because of bodily injury or orocerty damace caused after the date of such insolvency or bankruptcy.
5.
INVESTIGATION, DEFENSE OR SETTLEMENT OF CLAIMS OR SUITS Subject to the provisions of any written agreement between the companies and the Nuclear P.egulatory Commission, the companies shall defend any claim or suit alleging bodily injury or orocerty damage caused by a nuclear incident and seeking damages which are payable under this Master Policy, and may make such investigation and settlement of any claim or suit as they deem expedient.
In no event shall the companies be obligated to pay any claim of judgment or to defend any claim or suit after the companies have paid the amount of retro-spective premium actually received for excess losses arising out of the nuclear incident plus the amount of their contingent liability, if any.
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6.
PRIMARY FI!!AtlCIAL PROTECTIO!!
Regardless of t.he number of policies or contracts of primary financial orotection applicable to a nuclear incident, the limit of liability of all such policies or contracts shall be deemed to be exhausted when the sums paid under all such policies or contracts are equal to the lesser of (1) the sum of the limits of liability available under all such primary financial orotection, or (2) one hundred sixty million dollars.
The named insured designated in a certificate shall maintain in full effect during the currency of such certificate the primary financial protection described therein, except for any reduction of the limit c liability of such primary financial orotection solely as the result of sums paid thereunder.
Failure of the named insureds to comply with the foregoing shall not invalidate this h} ster Policy, but in the event of such failure the companies shall be liable only to the extent that they would have been liable had the named insureds complied therewith.
In the event that the limit of liability of the primary financial oro-t_e_ction is reduced, such named insureds shall immediately inform 20/4 523
. the companies thereof and mak all reasonable efforts to reinstate such limit.
Upon the companies' reauest the named insureds shall provide the companies with a certified copy of any policy or other contract of primary financial protection.
- 10 amendment of the primary financial protection shall increase, extend or broaden the insurance provided by this Master Polic; unle'ss the companies agree to the amendment by an endorsement issued to form a part of this Master Policy.
7.
IITEREST TO BE PAID BY tlAr1ED IllSURED 0:i RETROSPECTIVE PREMIUM Ai!D ALLOWAf!CE FOR PREF 11UM TAXES IN DEFAULT If retrospective premium or allowance for premium taxes is not paid when due by the named insureds designated in Item 1 of a certificate, such named insureds shall be oblig.ited to pay, in addition to the amount in default, interest thereon during the period of default.
Such interest shall be computed at an annual rate equal to the sum of (a) three percent plus (b) a rate of interest equal to Moody's Average Public Utility Bond Yield described in the issue of Moody's Bond Survey current on the date that the retrospective premium and 2074 524
. allowance for premium taxes were due.
The' annual rate of interest shall be adjusted mon'thly during the period of default to reflect any revisions of lioody's Average Public Utility Bond Yield described in the issue of 11oody's Bond Survey current on the first business day of each such month.
The interest so received shall be used to pay to the companies interest at the annual rate described above for any funds the companies have paid pursuant to Condition 4.
Any balance remaining shall accrue to the benefit of named insureds not in default as if it were investnant income on retrospective premium.
8.
f:0TICE OF NUCLEAR INCIDENT,CLAlti OR SUIT In the event of bodily injury, or crocerty damace to which this f4 aster Policy applies or of a nuclear incident which may give rise to claims therefor, written notice containing particulars sufficient to identify the insured and also reasonably obtainable infonnation with respect to the time, place and circumstances thereof, and the riames and addresses of the injured and of available witnesses, shall be given by or for the insured to Nuclear Energy Liability Insurance Association 2074 525 or the companies as soon as p acticable.
If claim is made or suit is brought against the insured, the insured shall immediately forward to Nuclear Energy Liability Insurance Association or the companies every demand, notice, summons or other process received by or on behalf of the insured.
9.
ASSISTANCE A:10 COOPERATION OF THE INSURED The insured _shall cooperate with the companies and the companies' request, attend hearings and trials and assist in making settlements, in securing and giving evidence, in obtaining the attendance of witnesses and in the conduct of any legal proceedings in connection with the subject matter of this insurance.
The insured shall not, except at the insured's own cost, make any payment, assume any obligation or incur any expense.
10.
ACTION'AGAI::ST CO:1PANIES flo action shall lie against-the companies or any of them unless, as a.
condition precedent thereto, the insured shall have fully complied with all the terms of this Master Policy, nor until the amount of the 2074 526 insured's obligation to pay shall have been finally determined either by judgment against,the insured after actual trial or by written agree-ment of the insured, the claimant and the companies.
Any person or organizatinr, or the legal repr esentative thereof who has e
secured such judgment or written agreenent shall thereafter be entitled to recover under this l' aster Policy to the extent of the insurance afforded by this !! aster Policy.
ilo person or organization shall have any right under this flaster Policy to join the companies or any of them as parties to any action against the insured to determine the insured's liability, nor shall the companies or any of them be impleaded by the insured or the insured's legal representative.
Except as provided in Condition 4, bankruptcy or insolvency of the insured or of the insured's estate shall not relieve the companies o# any of their obligations hereunder, 11.
SUBROGATION In the event of any payTnent under this Master Policy, the companies may participate with the insured and any underlying insurer in the exercise of all the insured's rights of recovery against any person or organization liable therefor.
Prior to knowledge of bodily injury 20/4 527
-2C-or crocerty darage to which this tiaster poli:y applies or of a nuclear incident which ray give rise to claims therefer, the insured may waive in writing any right of recovery against any person or organization.
After such knowledge, the insured shall not waive or otherwise prejudice any such right of recovery but shall do every-thing necessary to secure such rights.
Recoveries shall be applied first to reimburse any person or organization (including the insured) that may have paid any amount with respect to liability i.n excess.of the limit of the companies' liability hereunder; then to reimburse the companies up to the arount paid hereunder; and lastly to re. imburse anyone entitled to claim the residue, if any.
A different apportionment may be made by agreement signed by all parties affected.
Reasonable expenses incurred in the exercise of rights of recovery shall be apportioned in the ratic of the rescettive losses for which recovery is sought.
The companies shall, after deducting all of their expenses in securing re:cvery, apply the net amount of recoveries made by the ccmpanies as a credit in determining the amount of excess losses.
2074 428 4
,,k
21 -
2.
OTHEP. INSUPANCE This insurance shall be excess insurance over crimary financial protection.
This insurance is concurrent with insurance afforded by a Master Policy - Nuclear Energy Liability Insurance (Secondary Financial Pro-tection) issued to the named insured by utual Atomic Energy Liability Underwriters, hereinafter called " concurrent insurance".
The companies shall not be liable under this Master Policy for a greater proportion of excess losses than the applicable li-it of liability described in Condition 3 bears to the sum of (a) such limit plus (b) the applicable limit of liability of such concurrent insurance.
If the insured has other valid and collectible insurance (other than crimary financial orotection or concurrent insurance) applicable to excess losses covered by this Master Policy, the insurance afforded by this Master Policy shall be primary insurance under such other insurance.
/
13.
CHANGES,
Notice to any agent or knowledge possessed by any agent or by any other person shall not effect a waiver or a change in any part of 2074 529
. this Master Policy or estop the companies from asserting any right under the terms of this !1astpr Policy; nor shall the terns o,f this t' aster Policy be waived or changed,, exceot by endorsement executed by s
I:uclear Energy Liability Insurance Association on behalf of the companies and issue.d to form a part of this " aster Policy.
14 ASSIG!"E:IT Assignment of interest by the named insured shall not bind the companies until their consent, is endorsed hereon; if, however, the nanec ir sured shall die or be declared bankrupt,or insolvent, this Master Policy shall cover such named insured's legal representative, receiver or trustee as an insured under this 11 aster Policy, but only with respect to such legal representative's, receiver's or trustee's liability as such, and then only provided written notice of the legal representative's, receiver's or trustee's appointment as such is given to the companies within ten days after such appointnent.
15.
CUST0DIAtl 0F THE POLICY - !!UCLEAR REGULAT0kY CO'jMISSI0tl The named insureds have designated the uclear Regulatory Ccmmission as the custodian of this Master Policy and any endorsements thereto.
2074 530 16.
CA:!CELLATIOf!
The first named insured designated in Iten 1 of a certificate may cancel such certificate by mailing to the companies and the !!uclear P,egulatory Commission written notice stating when, not less than thirty days thereafter, such cancellation shall be effective.
The companies may cancel any certificate by mailing to the first named insured designated in Item 1 of such certificate written notice stating when, not less than ninety days thereafter, such cancellation shall be effective; provided that in the event of non-payment of any annual premium, retrospective prenium or allowance for premium taxes due under a certificate, such certificate may be canceled by the companies by mailing to the first named insured designated therein written notice stating when, not less than thirty days thereafter, such cancellation shall be effective.
The mailing of notice as aforesaid shall be sufficient proof of notice.
The effective date and time of cancellation stated in the notice shall become the end of the certificate period.
Delivery of such written notice, either by the first named insured designated 20/4 331 in Item 1 of a certificate or by the companies, shall be equivalent to railing.
A copy of the companies' cancellation notice shall.be mailed to the uuclear Regulatory Ccmmission, but nailing such a copy is not a con-dition of cancellation.
If a certificate is canceled, the earned portion of the annual premium shall be ccr.puted pro-rata. Adjustment of the annual premium, if any, may be r.ade either at the time cancellation is effective or as soon as practicable after cancellation becomes effective, but p;yr~:,c or tender of unearned premium is not a condition of cancellatior Cancellation or termination of any certificate shall not terminate tne obligation of a named insured to pay retrospective premium and the allowance for premium taxes as provided in such named insured's cercificate and Condition 2 ef this ' taster Policy.
This Master Policy shall terminate automatically on the effective date and time of cancellation or termination of the last certificate in effect.
.n
b 17.
COMPA:1Y REPP.ESE iTATIO::
(a) Any notice, sworn statement or prcof of la'ss which may be required by the provisions of this itaster Policy may be given to any one of the companies, and such notice, statement or proof of loss so given shall be valid and binding as to all companies.
(b)
In any action or suit against the companies, service of process may be made on any one of them and such service shall be deemed valid and binding service on all companies.
(c)
'uclear Energy Liability Insurance Association is the agent of the companies with respect to all matters pertaining to this i n su ra nce.
All notices or other cc = unications required by this l1 aster Policy to be given to the companies may be given to such agent, at its office at the Exchange, Suite 245, 270 Farmington Avenue, Farmington, Connecticut - 06032 with wie same force and effect as if given directly to the companies.
Any requests, demands or agreements made by such agent shall
-be deemed to have been made directly by the companies.
2074 533
-26 18.
AUT"^RIZATIC': OF FIRST 'A::ED I:SURED I
Except witn respec: to complian.e with the obligations imposed on the insured by Cor.ditions 3, 9,10 and 11 of this !! aster Policy, the first named insured designated in Item 1 of a certificate is authorized to act for every other persor and organization insured under such ce-tificate in all matters :ertaining to this insurance.
19.
7,F3E5 I!: SUESCRISI 3 CC"PA!ES A!!D It: TFEIR PROPCRTIO:: ATE LIABILITY The enbers of ?lu: lear En rgy Liability Insurance Association subscribing chis l taster Policy, and the proportionate liability of each, may change f r-- time to time.
Ea:n cor ?any subscribir.g this aster Policy upon its issuance shall be liab'.e only for its stated c 0;ortion of any obligation assumed or ex:ense incurred under tnis "ast?r Pclicy because of bodily injury
- r crecer:y darace caused during the period from the effective data of chis !! aster Policy to the close of December 31 ned following.
For each subsequent calendar year, beginning January 1 next following the effective date of this !! aster Policy, the subscribing com?anies and the procortionate liability of each such company shall be stated in an 20/4 534
. endorsement issued to form a part of this Master Policy, duly executed by the President of Nuclear Energy Liability Insurance Association on behalf of each such company, and mailed or delivered to the Nuclear Regulatory Commission.
20.
DECLARATIONS i
By acceptance of this fiaster Policy, the named insureds designated in
.a certificate agree that the statements in such certificate are their agreements and reoresentations, that this Master Policy and such certificate are issued in reliance upon the truth of such representations and that this Master Policy and such certificate embody all agreements between such named insureds and the companies or any of their agents relating to this insurance.
IN WITNESS WHEREOF each of the subscribing companies has caused this Master Policy to be executed on its behalf by the Nuclear Energy Liability Insurance Association and duly countersigned on the first page by an author-i ed representative z
For the subscribing Companies of NUCLEAR ENERGY LIABILITY INSURANCE AS30CIATION By 20/4 535 Burt C. Proom President
. NUCLEAR ENERGY LIABILITY IllSURAi;CE ASSOCIATI0f Certificate Forming Part of Master Policy No.
CERTIFICATE OF INSURANCE DECLARATIOl!S AND BOND FOR PAYlTENT OF RETROSPECTIVE PREMIUMS Certificate of Insurance This is to certify that the persons and organize:icns designate'd in Item 1 of the Declarations are named insureds under the Master Policy -
riuclear Energy Liability Insurance (Secondary Fir.ancial Protection),
herein called the " Master Policy," issued by Nuclear Eneroy Liaoility Insurance Association.
Such insurance as is provided by the Master Policy applies, through this certificate, only:
s (a) to the insureds identified in Items 1 and 2 of the Ceclarations, (b) for the certificate period stated
't.
Item 6 of the Declarations, (c) to bodily injury or procerty damace (1) with respect to which the primary financial protection described in Item 4 of the Declarations would apply but for exhaustion of its limit of liability as described in Condition 6 of the Master Policy, and s
20/4 536 (2) which is caused during the certificate period stated in Item 6 of the Declarations by a nuclear incident arising out of or in co'.nection with the nuclear reactor described in Item 3 of the Declarations, and (3) which is discovered.nd for which written claim is made against the insured not later than ten years after the end of the certificate period stated in Item 6 of the Declarations.
However, with respect to bodily injury or proaerty damage caused by an extraordinary nuclear cccurrer.ce this subparagraph (3) shall not operate to bar coverage for bodily injury or property damage which is discovared and for which written claim is made against the insured not later than twenty years after the date of the extraordinary nuclear occurence.
Declarations Item 1.
flamed insureds and addresses:
' (a)
(b)
Item 2.
Additional insureds:
Any o,ther person or organization who would be insured under the primary financial protection identified in Item 4 of the Declarations but for exhaustion of the limit of liability of 2074 537 such primary financial protection.
. Item 3.
Description and location of nuclear reactor:
Item 4 (a)
Identification of primary financial orotection applicable to the nuclear reactor and linit(s) of liability thereof:
Nuclear Energy Liability Insurance Association's Policy f!F-
$124,000,000 Mutual Atomic Energy Liability Underwriters' Policy MF-
$ 36,000,00 (a)
The following endorsenents, attached to the primary financial orotection policies listed in Item 4 (a) also apply to the insurance afforded by the Master Policy through this certificate as though they were attached hereto:
(1)
Waiver of Defenses Endorsement (Extraordinary Nuclear Occurrence) and (2)
Supplementary Endorserent - t:aiver of Defenses -
Reactor Construction at the Facility, (c)
The limits of liability proviced under the primary financial protection specified in Item 4 (a) above are not shared with any other reactor excep: as follows:
Item 5.
Linits of Liability:
The acount of retrospective premium actually received by the companies plus the amount of the companies' contingent liability, if any, pursuant to Conditions 2, 3 and 4 af the Master Policy.
}Q/4 j}@
I en 6.
Certificate Period:
Beginning at 12:01 c..a. on and continuing to the effective date and time s
of cancellation or termination of the Master Policy or this certificate, whichever first occurs, eastern standard time.
Item 7.
Maximum retrospective premium (exclusive of allowance for premium taxes) payable pursuant to Condition 2 of the Master Policy with respect to each nuclear incident:
$3,875,000.
Item 8.
Premium payable pursuant to Condition 1 of the Master Policy for the period from through December 31 following:
BOND FOR PAYMENT OF RETROSPECTIVE PREMIUMS Know all men by these presents, that the undersigned do hereby acknowledge that they are named insureds under the Master Policy described in the above Certificate of Insurance and Declarations.
The named insureds do hereby convenant with and are held and are firmly bound to the members cf Nuclear Energy Liability Insurance Association subscribing the Master Policy (hereinafter called the " companies") to pay to the companies all retrospective premiums and allowances for premium taxes which shall become due and payable in accordance with the Master Policy, as it may be changed from time to time, with interest on such premiums and allowances for taxes to be computed at the rate provided in the Master Policy from the date payment thereof is specified to be due the companies in written notice to the first named insured as provided in Condition 2 of the Master Policy until paid; 20/4 33c)
And it is hereby expressly agreed that copies of written notices of retrospective premiuns and allowances for premium taxes due and payable or other evidence of such amounts due and payable sworn to by a duly authorized representative of the companies shall be prima facie evidence of the fact and extent of the liability of the named insureds for such amounts; And it is further expressly agreed that the named insureds will indemnify the companies against any and all liability, losses and expenses of whatsoever kind of nature (including but not limited to interest, court cost, and counsel fees) which the ccapanies may sustain or incur (1) by reason of the failure of the named insureds to comply with the covenants or provisions of this Bond and (2) in enforcing any of the convenants or provisions of this Bond, or any provisions of the Master Policy relating to such c.ovenants or provisions; For the purpose of recording this agreement, a photocopy acknowledged before a Notary Public to be a true copy hereof shall be regarded as an original.
The preceding Certificate of Insurance, Declarations and Bond form a part of the Master Policy.
Cancellation or termination of the Master Policy or the Certificate of Insurance shall not affect the named insured's obligations under the policy or the Bond to pay the retrospective preruiums anc allowances for premium taxes, as provided ir, this Certificate and Condition 2 of the Master Policy.
20/4 540 i
V O
I.'! WITl!ESS WHEREOF, the named insured have caused the Declarations and the Bond for Payment of Retrospective Premiums to be signed and sealed by a duly authorized officer, to be effective August 1,1977, eastern s tandard time.
Attest or Witness flamed Insureds:
(flamed Insured - Type or Print)
By (SEAL)
(Signature of Officer)
(type or Print Name & Ti tle of Officer)
Date:
li! WITf!ESS UHEREOF, the companies subscribing the Master Policy have caused the Certificate of Insurance and the Declarations to be signed on their behalf by the President of i;uclear Energy Liability Insurance Association to be effective eastern standard time, and countersigned below by a duly authorized representative.
For the Subscribing Companies of i;UCLEAR Ef4ERGY LIABILITY If;SURAtlCE ASSOCIATION
~
By Burt C. Proom, President (Authorized,epresentative)
2:
575, as a ended; Pub. L.85-255, as amended; 71 Stat.
Au.hori ty:
t.2 U.S.C. 2210.
'1as hi ngton, D. "C.
this 2nd day of Acril
,1979.
Dated at FOR THE i;UCLEAR REGULATORY CO.'MI S S 107 A
n ii
- 11 V Y.
/~ Saruel J. Chilk Secretary df the Commission 20/4
$42 4,,,
,