ML20246D137

Discusses Review of Draft Final Rule on Extending Implementation Period for Certain Provisions of Property Insurance Rule 10CFR50.54(w)(5)(i).Draft Final Rule Package & SECY-88-230 Encl

ML20246D137
Person / Time
Issue date:	12/30/1988
From:	Sniezek J Office of Nuclear Reactor Regulation
To:	Jordan E Committee To Review Generic Requirements
Shared Package
ML20245E082	List: ML20245E080 ML20246D137
References
FRN-53FR36338, RULE-PR-50 NUDOCS 8905100135
Download: ML20246D137 (19)

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wfy0RANDUM F00: Edward L. Jordan, Chsirman

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~r Corimittee to Review Generic Requirements '

F00M: James H. Sniezek, Deputy Director k ': --

Office of Nuclear Reactor Regulation '*N Ib Ct% (7. M '

SUBJECT:

REVIEW 0F DRAFT FINAL RULE ON EXTENDING THE sd A WM _a

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IMPLEMENTATION PERIOD FOR CERTAIN PROVISIONS -

0F THE PROPERTY INSURANCE RULE (550.54fw)(5)(1))  :

Endosed for CRGR consideration is a draft final ru'le that would delay for 18 months implementation of 550.54(w)(5)(i). This section of the property insurance rule requires licensees to purchase by October 4,1988 property insurance that contains language both prioritizing insurance proceeds for payment of accident stabilization and decontamination costs and requiring that such proceeds be paid to an independent trustee for proper disbursement.

As explained in Frank Eillespie's memorandum to you datcd September 26, 1988, this rule is necessary becausp insurers were an6ble to change their policies i by the required date and have been unable to find ateyone to act as trustee.

The Cornission accepted the trustee 2 hip provisior, as edded by OGC at a very late otge of the 1987 prcperty insuraace rulemaking agaf ast the advice of staff. As a result, there was no public coement period offered on the merits of the trusteeship provisicn. The 18-month delay would allow the NRC to defer y provisions of a rule with which licensees cannot comply.

To prevent p6wer reactor licensees from being in non-compliance despite their good-faith offerts 10 obtain ihsurance containing the required provisions, NRR has issued to every power recctor licensee a temporary exemption from the schedule requirements of sSO.54(w)(5)(1) up to April 4, 1989. To forestall the need for possible further exemption action with its concomitant additional {

i resource burden on staff, we ask that the CRp2 a1ve expedited 3 consideration to this draft final rule. B m sp.tJhis rule would only codify the__reau_irements as i

they present,,[v exist Twith the schedular exemptions in place),) do not believe-CRGR review is necessgy. I would appreciate you,rJyggegns,e so the UfaTt 3 I

can preceed expeditiously with the rulemaking or ERGR review.

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Smu WQPL James H. S ezek, Depu G Director Of ice of Nuclear Reactor Regulation

Enclosures:

1. Draft Final Rule Package (15 copies) '

2. SECY-88-230 [

Q g 485I 6 6G . dep - @[Yf1 RlW0 REGULATORY ME 5.ES T 3 o , L I y yf 6D ,

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For: The Commissioners From: Victor Stello, Jr.  ;

Executive Director for Operations J l'

Subject:

FINAL RULE, 10 CFR PART 50, " NUCLEAR PROPERTY INSURANCE" -- EXTENSION OF TIME TO IMPLEMENT DECONTAMINATION PRIORITY AND TRUSTEESHIP PROVISIONSOFG50.54(w)(5)(1)

Purpose:

To inform the Commission _that the EDO-intends to publish 1 a final rule that extends the impimentation schedule for the stabilization and decontamination priority and trustee-ship provisions of its pronerty insurance' regulations con-tained in 10 CFR 50.54(w)(5)(1). The effective date would be delayed from October 4,1988 to April 4,1990. The de-lay in implementation is necessary because the_ insurers that offer property insurance for power reactors have informed the staff that they will be unable to include the stabili-ration and decontamination priority and trusteeship provi-sions in their insurance policies within the tirae currently provided. Concurrently, the extension of the effective date of the role will allow the NRC to consider three petitions l for rulemaking that propose changes to improve the efficacy,  !

of these provisions.  ;

Category: This is a negative consent item. The action proposed clearly falls within established Comission policy as set forth in j 10 CFR 1.31(a)(3) which delegates certain rulemaking authority {

to the Executive Director for Operations.

l Discussion: On September 19, 1988, the Commission published a preposed rule in the Federal Register (53 FR 363M) that proposed to j amend the implementation schedule for the subilization and 'q decontamination priority and trusteeship provisions of ita  ;

property insurance regulations contained in Ib' CFR 50.54(w) J (5)(1) to change the effectivo date from October 4,1988 to .l April 4, 1990. The October 4, 1988 implementation date was )

part of a rulematirig published on August 5,1987 1

CONTACT: i R. Wood, NRR i 492-1280 l a

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. The Commiss'ioners '2

-(52 FR 28963) which, for the first time, explicitly; required .

power reactor licensees to purchase on-site property damage. s i insurance policies in which-$1.06 billion of the proceeds- . .

j of these policies are to be used first for stabilization of~ l a reactor after an accident and then fcr decontamination of '

the facility before any otherl purpose. The'1987: rule also i required that these insurance proceeds be paid to an impar- '!

tial' trustee who would be. required.to disburse funds R accordirig to theistabilization and decontamination priority. . :4 Subsequent to publication of the 1987 final rule, the:NRC-was informed that the' trusteeship provisions and, to'a lesser j; extent, the stabilization and decontamination priority .

provisions of the rule were sufficiently complex and prob- )

lematic that the insurers were unable to incorporate these provisions in their policies by the required October 4,-1988 date.

3 AsexplainedinSECY-88-230'(August 10,1988), the' insurers ~~

and their counsel gave two reasons why they were unable to ]

comply with the dat'e specified in the final rule for adding the stabilization and decontamination priority and trustee -

ship provisions. First, with respect to the trusteeship provision, counsel for insurers assured the NRC staff that they had made a good-faith effort to obtain trustees but were unsuccessful. They beiieved the reason for.their-lack of success was the potential trustees' confMets of! interest and reluctance to assume, on the one hend responsibility t

for disbursing potentially over $1 biliion 16 insurance-proceeds and the resulting exposure to possible litigation j for wrongful disbursement, while, on the other. hand, being ,

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eligible for only modest fees for this-service. '

j A second reason insurers gave for being"anable-to comply i with the effective date of the 1987 rule was essentially.  !

logistical. As a contract, an insurance policy can only be modified with the consent of all affected parties. Ee-cause the Commissien's mandated stabilization and decon-tamination priority end trusteeship provisions adver;;ely affect the current rights under. the policy of the bondhold-l Grs' truntie, it is unHkely that policies con!d be legaRy l changed before the end of the policy years. Because'of in-surers' policy 7eneral procedures and the policy anniversa-ries, these dates would have' fallen after the effective date tpecified in the rule.

By the end of the comment priod on October 19, 1988, the NRC received five coments. As explained in the enclosed-  ;

draft Federal Register notice; none.of the comments opposed j the proposed extension. The only issue of kny controversy raisedbyecommenterwaswhetherthecAtensjonshouldbe-l;

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for a date certain or for an indefinite period pending ,

conpletion of consideration of the three petitions for j rulemaking discussed in SECY-88-230, fhe staff continues j to believe that an 18 month extension is cara appro- d priate then an open-ended extension. First, 18 months f should be sufficient to complete consideration Of th? ts- 1 sues raised in the three petitions. Second, if 18 montns  !

is insufficient, the NRC can act to further extend the l implementation date. Finally, the stabilization and j decontat,;inatien priority and trusteeship provisions were imposed for valid health and safety reasons. Indefinitely )

deferring these provisions prior to a substantive reevalua- l tion of their efficacy could conflict with the Commission's  ;

mandate to prctect public health and safety. The proposed )

rule analyzed why an 18 month delay would have minimal )

health and safety impact. The staff believes that analysis i remains valid. j i

for the foregoing reasons, the staff has concluded that a j delay from October 4,1988 to April 4,1990 in the imple- j mentation schedule of the stabilization and decontamination 1 priority and trusteeships provisions is justified and plans j to amend 10 CFR 50.54(w)(5)(1) accordingly. j RECOMMENDATION: That the Comission note:

1. The EDO certifies that the final rule will not have a significant economic effect on a substantial number of small entities pursunt to the Regulatory Flexibility Act of 1980, 5 b.h.C. 605(b) and will sign the rule in l 10 days from the date of this paper unless directed otherwise by the Ccmission.

2. The final rule will be published in tne Federal Register to be effective immediately.

3. The final rule dces not contain a new or amended in-formation collection requirement subject to the Paperwork Reduction Act of 1980(44U.S.C.3501etseq.). '

4. The Chief Councel for Advocacy of the Small Business M ministration will be informed of the certification regarding economic impact on small entities and the reascns for it as required by the Regulatory Flexibil-ity Act.

l S. The Office of Governmental and Public Affairs has con-I curred in the enclosed public announcement.

l l 6. A regulatory analysis has been prepared and is incor-porated into the draft Federal Register notice.

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1 The Corsissioners 4 I

7.- Neither an environmental impact statement nor an en-vironr; ental asscisment-has been prepared for this rule because the staff has determined that the rule is'the type of action described in categorical exclusion ,

10CFR51.22(c)(2);.

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8. The fin.nl rule would not constitute a backfit under 10 CFR 50.109; therefore, a backfit analysis'is not ,

required.

9. Congressional committees will be informed.

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10. The Office of the General Counsel has reviewed the -

final rule and has no legal ob.jection.

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l Victor Stello, Jr. 1

. Executive Director for Operations

Enclosures:

1. Federal Register Notice

2. Draft Public Announcement  ;

3. Draft Sample Letter to Congressional Committees  !

4 SECY-88-230 L

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. Enclosure 1

[7590-01]

NUCLEAR REGULATORf COMMISSION 10 CFR Part 50 Extension of Time for the Implementation of the Decontamination Priority and Tru'steeshdp Provisions of Property Insurance Requirements AGENCY: Nuclear Regulatory Commission.

ACTI0h: Final rule.

SUMMARY

The Nuclear eagulatory Commission is amending the implementation schedule te chacge the effective date for the stabilization and decontamination I priority and trusteeship provisions of its property insurance regulations.

This delay in implementation is necessary because the insurers that offer I property insurance for power reactors have informed the Commission that they 1

will be unable to include the stabilization and decontamination priority and j 1

trusteeship provisions in their insurance policies within the date required i by current regulations. Concurrently, the extension of the effective date of 1

the rule allows the NRC to consider ihree petitions for rulemaking that propose changes to improve the efficacy of the NRC's stabilization and decontamination priority and trusteeship provisions.

i EFFECTIVE DATE: [ Insert the date of publication of this rule,) {

FOR FURTHER INFORMATION CONTACT: Robert S. Wood, Office of Nuclear Rebetor Regulation, U.S. Nuclear Regulatory Comission, Washington, D.C. 20555, Telephone (301) 402-1280

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SUPPLEMENTARY INf0RiiATION:

1.-Background On September 19, 1988, the Commission published a proposed rule in the FEDERAL REGISTER (53 FR 36338) that proposed to amend the implementation schedule for the stabilization and decontamination priority and trusteeship provisions of its property insurance regulation:: contained in 10 CFR 50.54(w)(5)(1) to change the effective date from October 4,1980 to April 4,1990. As explained in the proposed rule, this implementation schedu7e was cart of e final rulemaking i published on August 5,1987(52FR28963)which,forthefirsttime, explicitly required power r' eactor licensees to purchase on-site property damage insurance j

( policies in which $1.06 billion of the proceeds frem these policies are to be- ,

l used first for stabilization of a reactor after an accident and then for decontamination of the facility before any other purpose. The 1987 final. rule i k

also required that these insurance proceeds be pa(J to an ' impartial trustee who would be required to disburse funds according to the stabilization and decon-l tamination priority.

Subsequent to the publication of the 1987 final rule, the NRC was infortned that the trusteeship provision and, to a lesser extent, the stabilization and

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decontamination priorf ty provisions of that rule were sufficiently complex and )

problematic that the insurers were unable to incorporate such provisions in their policies by the re@ird October 4e 1988 date.

As explained in the September 19, 1988 proposed rule, the insurers and i

their counsel gave two reasons why they were unable to comply with the date

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specified in the final rule for adding the stabiliretion and decontamination priority and trusteeship provisions. First, with respect to the trusteeship.

provision, counsel for insurers assured the NRC staff that they had made a good-faith effort to obtain trustees, but were unsuccessful. They bel hved 3 the reason for their lack of success was-the potential trustees' conflicts of ]

interest and reluctance to assume, on the one hand, responsibility for dis-bursing potentially over $1 billion in insurance proceeds and the'resulting I exposure to possible litigation for wrongful disbursement, while, on the other hand, being eligible for only modest fees for this servicei A second reason insurers gave for being unable to comply with the effec-l tive date of the 1987 rule was essentially logistical. As a contract, an in-surance policy can only be modified with the consent of all affected parties. '

Secause the Comission's mandated stabilization and decontamination priority and trusteeship provisions adversely affect the current rights under the policy of thi bondholders' trustee, it is unlikely that policies could be legally changed before the end of the policy years. Because 'of insurers' policy renewal procedures and the policy anniversaries, these dates would have fallen after the effective date specified in the rule.

II. Sumary of Coments, NRC Response and Conclusions l

l 4 By the end of the comment period on October 19, 1988, the NRC received five coments, One of these was misdirected to this rulemaking. (CommentI was directed to rescinding il50.54(x) and (y) rather than 650.54(w).) The remaining four either supported the proposed rulemaking (coment 4) or sought i

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1 clarification of the applicability of 10 CFR 50.54(w)(5)(1) to specific ifcensees while the rulemaking was being considered (comments 2, 3, and 5). In addition, comment 4 suggested that, rather than provide a date certain in the rule, the stabilization and decontamination priority and trusteeship provisions of I 5550.54(w)(3) and (4) be suspended indefinitely pending completion of considera- j tion of three petitions for rulemaking (PRM-50-51, PRM-50-51A, and PRM-50-51B; 53 FR 36335, September 19,1988).

The only issue of any controversy raised by comenters was whether the ex-tension of time for implementing the stabilization and decontamination priority and trusteeship provisions of 550.54(w) shouid be for a date certain (i.e.,

I April 4, 1990) or indefinite until consideratir:n of the above-cited petiticns for rulemaking has been completed. The Comission continues to believe that an 18 month extension is more appropriate than an open-ended extension. First, as comenter 4 acknowledged,18 months should be sufficient to ctoplete con-sideration of the issues raised in the three petitions for rulemaking. Second, if 18 months is insufficient, the Comission can act to further extend the 4 4

implementation date. Finally, the Comission imposed the stabilization and decontamination priority and trusteeship provisions for valid health and safety reasons. Indefinitely deferring these provisions prior to a substantive reevaluation of their efficacy could conflict with the Comission's mandate to protect health and safety. The proposed rule analyzed why an 18 month delay would have minimal health and safety impact. The NRC believes that analysis

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For the foregoing reasons, the Commission concludes that a delay from October 4,1988 to April 4,1990 in the implementation schedule of the stabili-2ation and decontamination priority and trusteeship provisions is justified and i i

isamending10CFR50.54(w)(5)(1)accordingly. l Bocause the amendment to 6 50.54(w)(5)(1) relates solely to extending the time for implementing the stabilization and decontamination priority and trusteeship provisions of the property insurance rule and therefore provides I relief from restrictions under regulations currently in effect, the Commission l has found that good cause exists for raking the rule effective on the date of l

publication in the FEDERAL REGISTER without the customary 30 day waiting period.

1 III. Environmental Impact: Categorical Exclusion The KRC hes determined that this rule constitutes a minor corrective amendrent thet does not substantially modify existing regulations and, there-fore, is the type of action eligible for entegorical exclusion under 10CFR51.22(c)(2). Accordingly, neither an environmental impact statement nor an environmental assessment is required.

IV. Paperwork Reduction Act Statement This final rule does not contain a new or amended information collection requirement subject to the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget approval number 3150-0011.

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V. Regulatory Analysis On August 5, ;987, the NRC published in the TEDERAL REGISTER a final rule

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~ I amending 10CFR50.54(w). The rule increased the amount of on-site property damage insurance required to be carried by NRC's power reactor licensees. The rule also required these licensees to obtain by October 4, 1988 insurance  ;

policies that prioritized insurance proceeds for stabilization and decontamina-tion after an accident and provided for payment of proceeds to an independent 1

trustee who would disburse funds for decontamination and cleanup before any j other purpose. Subsequent to publication of the August 5, 1987 rule, the NRC was inforced by insurers who offer nuclear property insurance that the decontamina-tion priority and trusteeship provisions would not be able to be incorporated into the policies by the time required in the 1987 rule. In petitions for-rule-making, insurers' representatives further steted that the trusteeship provi-sions might actually have an effect counter to their intended purpose by delay-ing claims payment and thus possibly the cleanup process. By deferring imple-mentetion of these provisions by 18 months, the Commission is allowing sufficient time either to secure the required coverage or to reconsider the mechanism by which accident cleanup funds may be assured to be used for their intended purpose. Even without formal stabilization and decontamination priority and trusteeship provisions, NRC has authority to tale appropriate enforcement action to order cleanup in the unlikely event of an accident. Thus, this rule will not have a significant impact on public health and safety. Furthermore, this rule will not have significant impacts on state and local governments and geographical regions; on the environment; or, create substantial costs to

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licensees, the flRC, or other Federal agencies. The foregoing discussion constitutes the regulatory analysis for this rule.

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VI. Regulatory Flexibility Certification j As required by the Regulstory Flexibility Act of 1980, 5 U.S.C. 605(b), the Comission certifies that this final rule does not have a significant economic impact on a substantial number of small entities. The final rule affects only those companies licensed to operate nuclear power plants. The companies that own these plants do not fall within the scope of the definition of "small entities" set forth in the Regulatory Flexibility Act or the Small Business Size Standards set out in regulations issued by the Small Business Administration at 13 CFR Part 121.

l VII. Backfit Analysis The NRC has determined that the backfit rule, 10 CFR 50.109, does not i 6pply to this rule because this rule would not impose a backfit as defined in650.109(a)(1). Therefore, a beckfit analysis is not required for this rule.

List of Subjects in 10 CFR Part 50 Antitrust, Classified information. Fire prevention, Incorporation by ref- l 1

erence, Intergovernmental relations, Nuclear power plants and reactors, Penalty,  !

8 Radiation protection, Reactor siting criteria, Reporting and recordkeeping requirements.

For the reasons set out in the preamble and under the_ authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 552 and 553, the NRC is adopting the following amendment to 10 CFR Part 50.

PART 50-DOMESTIC LICENSING OF PRODUCTION AND UTILIZATION FACILITIES

1. The authority citation for Part 50 continues to read as follows:

Authority: Secs. 102, 103, 104, 105, 161, 182, 183, 186, 189, 68 Stat. 936, 937, 938, 948, 953, 954, 955, 956, as amended, sec. 234, 83 Stat. 1224, as amended (42 U.S.C. 2132, 2133, 2134, 2135, 2201, 2232, 2233, 2236, 2239, 2282); secs.201asamended, 202, 206, 88 Stat. 1242, as amended, 1244, 1246 (42 U.S.C. 5841, 5842, 5846).

Section 50.7 also issued under Pub. L.95-601, sec. 10, 92 Stat. 2951 (42 U.S.C.5851). Section 50.10 also issued under secs. 101, 185, 68 Stat. 936, 955, as amended (42 U.S.C. 2131, 2235); sec.102, Pub. L.91-190, 83 Stat. 853 (42 U.S.C. 4332). Sections 50.23 50.35, 50.55, and 50.56 also issued under sec. 185, 68 Stat. 955 (42 U.S.C. 2235). Sections 50.33a, 50.55a and Appendix Q alsoissuedundersec.102, Pub.L.91-190,83 Stat.853(42U.S.C.4332).

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. 9 Sections 50.34'and50.54alsoissuedundersec.204,88 Stat.1245(42U.S.C.

5844). Sections 50.58, 50.91, and 50.92 also' issued under Pub. L.97-415, 96 Stat. 2073 (42 U.S.C. 2239). Section 50.78 also issued under sec. 122,-68

-Stat. 939 (42 U.S.C. 2152). Sections 50.80-50.81 also issued under sec. 184, 68 Stat. 954, as amended (42 U.S.C. 2234). Section 50.103 also issued under sec.108,68 Stat.939,asamended(42U.S.C.2138). Appendix F also issued.

undersec.187,68 Stat.955(42U.S.C.2237).

For the purposes of sec. 223, 68 Stat. 958, as amended (42 U.S.C. 2273);

il 50.10 (a), (b), and (c), 50.44, 50.46, 50.48, 50.54'and 50.80(a) are issued under sec,161b, 68 Stat. 948, as amended (42 U.S.C.' 2201 -(b)); il 50.10 (b) and (c), and 50.54 are issued under sec. 1611,68 Stat.949,asamended(42 U.S.C.2201(1));andil50.9,50.55(e),50.59(b),50.70,50.71,50.72,50.73,

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and 50.78 are issued under sec. 1610,68 Stat.950,asamended(42U.S.C.

2201(o)).

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2. In 650.54~, paragraph (w)(5)(1) is revised to read as follore: l l

i 550.54 Conditions of licenses. l I

(w) i (5) The decontamination priority-and trust requirements set forth in paragraphs (w)(3) and (w)(4) of this section must:

(1) Be incorporated in onsite property damage insurance policies for-nuclear power plants not later than April 4, 1990 and-Dated at Rockville, Maryland this day of ,1988.

For the Nuclear Regulatory Commission-Victor Stello, Jr.

Executive Director  ;

for Operations i

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4 Enclosure 2:

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l DRAFT PUBLIC ANNOUNCEMENT I

NRC EXTENDS TIME TO COMPLYJ WITH ITS REACTOR PROPERTY INSURANCE 'l REQUIREMENTS a

The Nuclear Regulatory Commission is amending. its regulations to extend from October 4, 1988 to April 4, 1990sthe time by which power reactor,11cen- I sees are required to purchase on-site property damage insurance policies con-pr e s fr hese po c h I be irst sa e nd de ont -

inate a reactor after an accident and that proceeds be paid to an independent .

f trustee to protect the proceeds against claims for non-accident-recovery purposes.

The implementation date has been extended because the insurers offering  !

reactor property insurance are unable to incorporate such provisions in their policies by the original date required and because insurers have been unable to find anyone willing to act as trustee. Concurrently. insurers and repre-sentatives of the nuclear utility industry have submitted three petitions forf rulemaking which would, if adopted, rescind the trusteeship provisions contained intheCommission'sregulationsin10CFR50.54(w). Thus, the eighteen-month extension gives the insurers more time to incorporate appropriate implementation language in their policies while also allowing the Commission time tol consider the substantive issues raised in the petitions for rulemaking.-

A proposed rule seeking comment on the' extension of the implementation schedule was issued on September 19, 1988. (53.FR36338). Five comments were received, nene of which opposed the extension. The amendment to E 50.54(w)(5)(i) becameeffectiveon[insertdateofpublicationintheFederalRegister.)

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CHAIRMAN Enclosure 3 1

The Honorable Morris K. Udall, Chairman I Subcommittee on Energy ard the Environment >

Comittee on Interior and Insular Affairs United States Hoese of Representatives Washington, DC 20515

Dear Mr. Chairman:

Enclosed for the information of the Subcommittee is a copy of a final rule which extends from October 4, 1988 to April 4, 1990 the time by which power reactor licensees are required to purchase on-site property damage insurance policies containing certain accident coverage provisions. These provisions require that proceeds from these policies shall be used first to stabilize and decontaminate a reactor after an accident and that proceeds be paid to an independent trustee to protect the proceeds against claims for non-accident-recovery purposes.

The implementation date has been extended because the insurers offering reactor property insurance are unable to incorporate such provisions in their policies by the original date required and because insurers have been unable to find anyone willing to act as trustee. Concurrently, insurers and represent-atives of the nuclear utility industry have submitted three petitions for rule-making which would, if adopted, rescind the trusteeship provisions contained in the Comission's regulations in 10 CFR 50.54(w). Thus, the 18 month extension gives the insurers more time to incorporate appropriate implementation language i in their policies while also allowing the Comission time to consider the substantive issues raised in the petitions for rulemaking. A proposed rule seeking coment on the extension of the implementation schedule was issued on September 19, 1988. (53FR36338). Five coments were received, none of which opposed the extension. j 1

Sincerely, Victor Stello, Jr.

Executive Director for Operations

Enclosure:

Proposed Policy Statement cc: Rep. Manuel Lujan, Jr.

Rep. Carlos J. Moorhead 1

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. p ea t!cuy J o f" , i, UNITED STATES . ,

& . ,E NUCLEAR REGULATORY COMMISSION j o, g WASHINGTON, D.C. 20065  ;

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'%* .*++ / j CHAtRMAN Enclosure 3 I

The Honorable John B. Breaux, Chairman Subcommittee on Nuclear Hsgulation Comittee on Environment and Public Works United States Senate Washington, DC 20510

Dear Mr. Chairman:

Enclosed for the information of the Subcommittee is a copy of a final rule which extends from October 4, 1988 to April 4, 1990 the time by which pewer reactor licensees are required to purchase on-site property damage irisurance policies containing certain accident coverage provisions. These provisions require that proceeds from then policies shall be used first to stabilize and decontaminate a reactor after an accident and that proceeds be paid to an independent trustee to pratect the proceeds against claims for non-accident-recovery purposes, The implementation date has been extended because the insurers offering reactor property insurance are unable to incorporate such provisions in their policies by the original date required and because insurers have been unable to find anyone willing to act as trustee. Concurrently, insurers and represent-atives of the nuclear utility industry have submitted tnree petitions for rule-making which would, if adopted, rescind the trusteeship provisions contained in the Comission's regulations in 10 CFR 50.54(w). Thus, the 18 month extension gives the insurers more time to incorporate appropriate implementation language in their policies while also allowing the Comission time to consider the substantive issues raised in the petitions for rulemaking. A proposed rcle seeking coment on the extension of the implementation schedule was issued on September 19, 1988. (53FR36338). Five coments wre received, none of which opposed the extension.

Sincerely, Victor Stello, Jr.

Executive Director for Operations

Enclosure:

Proposed Policy Statement cc: Rep. Manuel Lujan, Jr.

Rep. Carlos J. Moorhead k __ - - _ .-

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• 3iAIRMAN Enclosure 3' The Honorabic Philip R. Sharp, Chairman Subcommittee on_ Energy and Power Comittee oW Energy and Commerce

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United States House of, Representatives i Washington, DC 2.0515 j

Dear Mr. Chairman:

Enclosed for the information of the Subcommittee is a. copy of a.. final' rule which .

extends from October 4,1988 to April 4,1990 the time by which power reactor l

-l' licensees'are reovired to purchase on-site. property-damage insurance policies.

containing'certain accident-coverage provisibns. These provisions require that pr6ceeds from these policies shall be used first to stabilize an<t decentaministe 1 a reacter after en accident and that proceeds be paid to an,ind6 pendent trusteei j to protPt the proceeds against claims for non-accident-recovery purposes.

The implementation date has been extended because the insurers offering l reactor property insurance are unabic to incorporate such provisions in their 1 policies by the original date required and becausa insurers have been unable._. .

.to find anyone willing to act as trustee. Concurrently, insurers and represent- _j atives of the nuclear utility industry have submitted three petitions for rule-  !

making which would, if adopted, rescind the trusteeship provisions contained in.  ;

the Comission's regulations in 10 CFR 50.54(w). . Thus the 18 month extension 1 l gives the insurers more time to incorporate appropriate implementation language-l in their policies while also allowing the Comission time to consider the j substantive issues raised in the petitions for rulemaking. A proposed rule-seeking coment on the exter.sion of the implementation; schedule was issued on l September 19, 1988. (53 FR 36338).- Five' comwents vere received, none of which ,

opposed the extension. '

Sincerely -  ;

. Victor Stello,'Jr, Executive Dire nor ..

for Operations

Enclosure:

Proposed Policy Statement cc: Rep. Manuel Lujan, Jr.

l Rep. Carlos J. Moorhead 1

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