ML20151H538

Forwards Endorsements 1 & 2 to Nelia Policy NW-116 & Maelu Policy MW-47

ML20151H538
Person / Time
Site:	Arkansas Nuclear
Issue date:	04/12/1988
From:	Samuels J MARSH & MCLENNAN, INC.
To:	Dinitz I Office of Nuclear Reactor Regulation
References
NUDOCS 8804200420
Download: ML20151H538 (21)

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M & M Nuclear Consultants 2121 San Jacinto Street 1300 San Jacinto Tower Dallas, Texas 75201 Telephorie 214 979-990()

April 12, 1988 Mr. Ira Dinitz Senior Insurance Indemnity Analyst Office of Nuclear Reactor Regulation Mail Stop 12E4 U.S. Nuclear Peculatory Comission Washington, D. C. 20555 Re: Paster Worker Policy Arkansas Power & Light Company ANI Certificate NW-116, End.1 & 2 PAELU Certificate MW-47,- End.1 & 2

Dear Pr. Dinitz:

Enclosed are two certified copies of the captioned certificates and endorsements.

Please do not hesitate to call with any cuestions.

Sin ly,

/ WW John L. Samuels Nuclear Consultant

/pwp 7891K-2 Enclosure s cc: M. Wilson - APFL (w/ enclosures)

C. Faulk - PSU l R. Nerget - PAP Little Pock )

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8804200420 88041% i PDR ADOCK 05000313 J DCD

O MUTUAL ATOMIC ENERGY LIABILITY UNDERWRITERS NUCLEAR ENERGY LIABILITY POLICY (Facility Worker Form) herein called-the MASTER WORKER POLICY CERTIFICATE OF INSURANCE Certificate'No. MW-47 Date of_ Issue Jan. 22. 19 88~

This is to certify that the insureds named in Item 1 of the Declarations hereof, hereinafter called the "Named Insureds", have obtained insurance under the Master Worker Policy-issued by Mutual Atomic Energy Liability Underwriters on behalf of its members. -The insurance is subject to all of the provisions of this "Certificate" an'd the Master Worker Policy.

1 DECLARATIONS Item 1. Named Insureds and Addresses:

Arkansas Power & Light Company P.O. Box 551 Little Rock, Arkansas 72203 Item 2. Certificate Coverage Period:

Beginning at 12:01 a.m. January 1, 1988 and ending j at the close of December 31, 1992, Eastern Standard  !

Time, or at the time and date this Certificate is '

cancelled or terminated, whichever first occurs.

MMWPC-1 (1/1/88) Page 1 i

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Item 3. Description of the Facility:

Location: All of the premises including the land and all buildings and structures known as the named insured's Arkansas Nuclear One - Units 1 and 2. Arkansas Nuclear One is located in Pope County, Arkansas approximately six (6) miles West-Northwest of Russellville, Arkansas.

Type: Power Reactor (0perating) operator of the Facility: Arkansas Power & Light Company.

Item 4. Amount of Insuranco Available:

The amount of insurance afforded by the Master.

Worker Policy through this Certificate shall be determined by Section VIII of the Master Worker Policy and all of the other provisions of the policy relating thereto.

Item 5. Advance Premium: 59,675.00 2

APPLICATION OF CERTIFICATE This certificate applies only to bodily injury to a new worker (1) which is caused during the certificate Coverage Period by the nuclear energy hazard and (2) which is dis-covered and for which written claim is first made against an insured under the certificate within the discovery period of the Master Worker Policy.

3 INDUSTRY RETROSPECTIVE RATING PLAN All insurance under the Master Worker Policy is subject to the Industry Retrospective Rating Plan in use by the companies. No insurance is provided under this Certificate unless and until the first Named Insured has accepted in writing the Industry Retrospective Rating Plan Premium En-dorsement and a copy of the signed endorsement has been issued by the companies to form a part of this certificate.

MMWPC-1 (1/1/88) Page 2

e Ill WITliESS WHEREOF, the companies subscribing the Master Worker Policy have caused this Certificate to be executed and attested on their behalf by the Manager of Mutual Atomic Energy Liablity Underwriters and duly countersigned by an authorized representative.

For the Subscribing Companies of MUTUAL ATOMIC ENERGY LIABILITY UNDERWRITERS J. Michael O'Connell, '!a nage r By .W _ 612L e Mutti5rlstri Egenqh Countersigned "-

[.[d (Authorized Representative)

Tras i:, to certfg that tl kForm) is aa, dct-true copy of of the Nudear Emasy UebDy Pd.cy (Faul,' ypdcr.

igstedhc cit 14 f asuranc is d' ~ L 45 T.

s. vee rwaera-tiatary vom16a

.:eu. ca Awe Sdar t.turm  ;

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l MMWPC-1 (1/1/88) Page 3

t NUCLEAR ENERGY LIABILITY INSURANCE ASSOCIATION NUCLEAR ENERGY LIABILITY POLICY i (Facility Worker Form)  ;

1 herein called the '

MASTER WORKER POLICY  ;

, CERTIFICATE OF INSURANCE certificate No. NW-116 Date of Issue Jan. 22, 19 88  ;

This is to certify that the insureds named'in Item 1 of the Declarations hereof, hereinafter called the "Named Insureds", have obtained insurance under the Master Worker t Policy issued by Nuclear Energy Liability Insurance Associa-tion on behalf of its members. The insurance is subject to all of the provisions of this "Certificate" and the Master '

Worker Policy.

1 ,

j DECLARATIONS Item 1. Named Insureds and Addresses: i Arkansas Power & Light Company  :

P.O. Box 551 Little Rock, Arkansas 72203 1

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4 i Item 2. Certificate Coverage Period:

l Beginning at 12:01 a.m. January 1, 1988 and ending at the close of December 31, 1992, Eastern Standard Time, or at the time and date this Certificate is

cancelled or terminated, whichever first occurs.

NMWPC-1 (1/1/88) Page 1 a

- , _ _ . . _ _ . _ _ . _ . _ . . , . . _ , , , _ _ _ . _ _ = __ , _ ,,._,.___,__, _ , . _ _ . , _ _ _ _ _ . _ . . . _ . , . _ ,

i Item 3. Description of the Facility: ,

Location: All of the premises including the land and all buildings and structures known as the named insured's

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Arkansas fluclear One - Units 1 and 2. Arkansas Nuclear One is located in Pope Co.nty, Arkansas approximately six (6) miles West-Northwest of Russellville, Arkansas.

l Type: Power Reactor (Operating)

! operator of the Facility: Arkansas Power & Light Company i

Item 4. Amount of Insurance Available:

1 1 The amount of insurance afforded by the Master 4

Worker Policy through this Certificate shall be determined by Section VIII of the Master Worker ,

l Policy and all of the other provisions of the policy '

relating thereto. .

Item 5. Advance Premium: $ 33,325.00 1

i APPLICATION OF CERTIFICATE l  !

This Certificate applies only to bodily injury to a new '

2 worker (1) which is caused during the Certificate Coverage i

Period by the nuclear energy hazard and (2) which is dis- j i

covered and for which written claim is first made against an -

] insured under the certificate within the discovery period of l the Master Worker Policy.

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INDUSTRY RETROSPECTIVE RATING PLAN j All insurance under the Master Worke~ Policy is subject to 4

the Industry Retrospective Rating Plan in use by the companies. No insurance is provided under this certificate unless and until the first Named Insured has accepted in writing the Industry Retrospective Rating Plan Premium En-dorsement and a copy of the signed endorsement has been issued by the companies to form a part of this certificate.

NMWPC-1 (1/1/88) Page 2

s Ill WITilESS WHEREOF, the companies subscribing the Master Worker Policy have caused this Certificate to be executed and attested on their behalf by the President of Nuclear Energy Liability Insurance Association and duly counter-signed by an authori:ed representative.

For the Subscribing Companies of NUCLEAR ENERGY LIABILITY I!!SURANCE ASSOCIATION Burt C. Proom, President By . W M o 1 'WA

( Auth%)ized AgdTR)~

/4 ' '

Countersigned , m M ~

dc

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(Authorized Representative)

This ic to cortify that this h a true copy of the originci Certificat0 t,a nting tha numbcr ciesigncted her can, for irsug.nco covera;o tr. der the Nucicar En' *gy Liab!!;t/ Fclicy (Fr.cility V.ff korc Form) horo!n cal10d tw M stui 'JarL < -"' Hcv i ggjaiordcd by tho copy.

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John L. Quattrc 't, Vice Presidcot - L!abih y uti Jctwritir,0 American Nuc! car msurors NMWPC-1 (1/1/88) page 3 i

Nuclear Energy Liability Insurance MUTUAL ATOMIC ENERGY LIABILITY UNDERWRITERS l ADVANCE PREMIUM AND STANDARD PREMIUM ENCORSEMENT CALENDAR YEAR 1988

1. ADVANCE PREMIUM: It is agreed that the Advance Premium cue the ccmpanies for the period designated above is:

$ 9,675.00 .

2. STANDARD PREMIUM AND RESERVE PREMIUM: In the absence of a enange in tne Advance Premium indicated above, it is agreed that, subject to the provisions of the Indus-try Retrospective Rating Plan, the Standard Premium is said Advance Premium and the estimated Reserve Premium element of the Standard Premium is:

This is to certify that this is a truo copy of the original Endorsernant

$ 7,740.00 having tho endorsoment number and being mado part of tho Cortificate of Inscrance bearing the r. umber designate.djercon for insuranca comage und t the Nuc! car Energv t i' N%#clicy (Facility Workers Form). Na Int rang.ffc {My John L. Quattu :hi, Vice President - Liability Underwriting American Nuclear incurers Effective Date of this Endorsement January 1, 1988 To form a part of Certificate No. MW-47 12:01 A.M. Standard Time Issusd to Arkansas Power & Light Company Date of Issue January 22, 1988 For the Subscribing Companies MUTUAL ATOMIC ENERCT LIABILITT UNDERWRITERS A

By Endorsement No. 2 Countersigne M<

ME k'- 2 (1/1/88)

Nuclear Energy Liability Insurance MUTUAL ATOMIC ENERGY LIABILITY UNDERWRITERS INDUSTRY RETROSPECTIVE RATING PLAN PREMIUM ENDORSEMENT It is agreed that:

1. DEFINITIONS With reference to the premium for the Certificate of which this endorsement forms a part:

"Master Worker Policy" means the Master Worker Policy issued by MAELU; "Certificate Holder" means the first Named Insured in a Certificate issued to form a part of the Master Worker Policy; "advance premium", for any caludar year, is the esti-mated standard premium for that calendar year; "standard premium", for any calendar year, is the premium for that calendar year computed in accordance with the companies' rules, rates, rating plans (other than the Industry Retrospective Rating Plan), premiums and minimum premiums applicable to this insurance.

Standard premium includes elements for premium taxes, expenses, profit and contingencies, guaranteed cost insurance and estimated reserve premium. The elements of standard premium, other than for premium taxes and estimated reserve premjum, are not subject to retrospr..-

tive adjustment; "reserve premium" means that portion of the premium for a certificate (including reserve premium charges paid) that is specifically allocated under the Industry Retro-spective Rating Plan for ratable incurred losses; "industry reserve premium", for any period, is the sum of the reserve premiums for that period for all Certifi-cates issued to form a part of the Master Worker Policy; "retrospective adjustment ratio", for any period, is the ratio of the reserve premium for this certificate for that period to the industry reserve premium for the same period; I

"incurred losses" means the sum of all:

(1) losses and expenses paid by MAELU, and  !

(2) reserves for losses and expenses as estimated by MAELU, ME-W-1 (1/1/88) Page 1 J

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because of obligations assumed and expenses incurred in connection with such obligations by the members of MAELU under the Master Worker Policy; "ratable incurred losses" means 95% of incurred losses.

Ratable incurred losses are the portion of incurred losses which are not covered by the guaranteed cost insurance element of standard premiums; "non-ratable incurred losses" means 5% of incurred losses. Non-ratable incurred losses are the portion of incurred losses which are covered by the guaranteed cost insurance element of standard premiums; "reserve for refunds", as of any date, is the algebraic difference between:

(1) all industry reserve premium fo: the period from January 1, 1986 through such date, minus (2) the total for the same period of (a) all ratable incurred losses and (b) all industry reserve pre-mium refunds made under the Industry Retrospective Rating Plan by members of MAELU; "industry reserve premium charge", for any period, means the amount determined pursuant to the provisions of Section 4 of this endorsement for payment by the Named Insureds under Certificates; "reserve prerolum charge" means the portion of an indus-try reserve premium charge payable by the Named Insureds under this Certificate; "industry reserve premium refund", for any period, means the amount determined pursuant to the provisions of Section 4 of this endorsement for return to the Named '

Insureds under Certificates; "reserve premium refund" means the portion of an indus-try reserve premium refund returnable to the Named Insureds under this certificate.

2. PAYMENT OF ADVANCE AND STANDARD PREMIUMS The Named Insureds shall pay the companies the advance premium stated in the declarations, for the period from the ef fective date of this Certificate through December 31 following. Thereafter, at the beginning of each calendar year while this certificate is in force, the Named Insureds shall pay the advance premium for such year to the companies.

l ME-W-1 (1/1/88) Page 2

The advance premium for each calendar year shall be stated in the Advance and Standard Premium Endorsement for the year issued by the companies as soon as practic-able prior to or after the beginning of the year.

As soon as practicable after the end of a calendar year or the certificate coverage Period, the standard premium for the preceding year shall be finally determined and stated in the Advance and Standard Premium Endorsement for that year. If the standard premium exceeds the ad-vance premium paid for that year, the Named Insureds shall pay the excess to the companies; if less, the com-panies shall return to the Named Insureds the excess portion paid.

The Named Insureds shall maintain records of the inform-ation necessary for premium computation and shall send copies of such records to the companies as directed, at the end of each calendar year, at the end of the Certi-ficate Coverage Period and at cuch other times as the companies may direct.

3. SPECIAL RESERVE ACCOUNT; USE OF RESERVE PREMIUMS MAELU shall maintain on behalf of its members a Special Reserve Account for holding collectively all reserve premiums paid for all Certificates issued to form a part of the Master Worker Policy. Such premiums, together with any undistributed net income realized thereon after taxes and investment expenses, shall be used for the following purposes only:

(1) to pay ratable incurred losses or, in the event ratable incurred losses are paid under the Master Worker Policy from funds advanced by the members of MAELU subscribing the policy, to reimburse such t

members as a matter of first priority for the funds advanced;

(2) to refund any amounts so held to the Named i Insureds, as provided in Section 4.

No members of MAELU and no Named Insureds shall have any individual interest in or claim upon amounts held in the Special Reserve Account, except to participate propor-tionally in any refund or reimbursement provided for above.

All reserve premiums paid or payable for this certifi-cate may be used by MAELU to discharge the obligations of its members under the Master Worker Policy with re- '

spect to the above purposes and arising out of claims l made under any Certificate issued to form a part of the l Master Worker Policy.

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4. PAYMENT OF RESERVE PREMIUM CHARGES AND REFUNDS As soon as practicable af ter each December 31 the com- l panies will review the status of the reserve for refunds i and report their findings to all Certificate Holders. )

If, at any time, the companies find that there is a negative balance in the reserve for refunds and that j such condition is likely to prevail, they shall deter-mine an appropriate industry reserve premium charge.

Similarly, if the companies find that there is a surplus i positive balance, they shall determine an appropriate i industry reserve premium refund.

The portion of an industry reserve premium charge or an industry reserve premium refund that is:

(1) payable by the Named Insureds as a reserve premium charge, or (2) due such insureds as a reserve premium refund, shall be determined by multiplying the industry reserve premium charge or the industry reserve premium refund by the retrospective adjustment ratio applicable to this Certificate.

The amount of any reserve premium charge shall be stated in a Retrospective Reserve Premium Charge Endorsement.

The charge shall be. paid promptly after receipt of the endorsement.

When all claims covered by the Master Worker Policy are closed the companies shall make a final review and report, and shall determine a final induratry reserve premium charge or industry reserve premium refund equal to the amount of the balance.

5. FINAL PREMIUM l

The final premium for this certificate shall be (a) the '

sum of the standard premiums for each calendar year, or portion thereof, during which the certificate remains in t

1 force plus (b) the sum of all reserve premiums, includ- I ing all reserve premium charges, minus (c) the sum of I all reserve premium refunds.

6. RESERVE PREMIUM CHARGE AGREEMENT In consideration of (a) the participation of Named Insureds in other certificates subject to the Industry Retrospective Rating Plan, (b) the undertaking of such Named Insureds to pay their appropriate share of any industry reserve premium charge and (c) the obligations assumed by the members of MAELU under the Master Worker 3 l

ME-W-1 (1/1/88) Page 4 l

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__________________-____-________-____-________\

Policy, the Named Insureds, by acceptance of the Master l Worker Policy, agree:

(1) That the insurance provided by the Master' Worker Policy applies collectively to all claims covered by the policy through any and all Certificates '

issued to form a part of the policy.

(2) That the right of each Named Insured'under a Cert--

ificate to receive reserve premium refunds and the 1 obligation of each such insured to pay ' reserve ,

l premiums charges applies to all claims covered by the Master Worker Policy . and continues until all such claims are closed, whether or not such claims i were before the inception of the Certificate or i after its termination. ,

3 (3) To pay all reserve premium charges due promptly i

after receipt of the Retrospective Reserve Premium Charge Endorsement,-whether or not the Certificate is terminated. Any reserve premium charge shall be overdue if not paid within 60 days of the date of the invoice for the charge.  !

overdue reserve premium charges shall bear interest i

, from the due date until paid at an annual rate equal to the sum of (a) 34 plus (b) a rate of in-terest equal to Moody's Average Public Utility Bond

' Yield described in - the issue of Moody's Bond Survey current on the due date. Any reserve ,

premium refund due to Named Insureds under a Certi- '

ficate shall be used to pay any overdue reserve premium charges to such Named Insureds.

7. RESERVE PREMIUM REFUND AGREEMENT '

s

Each member of MAELU subscribing the Master Worker

, Policy for any calendar year, or portion thereof, with  :

a respect to which an industry reserve premium refund is I determined to be payable thereby agrees fer itself,

] severally and not jointly, and in the respective pro- l' portion of its liability assumed under the Master Worker Policy for that calendar year, to return promptly to the l Named Insureds that portion of such refund due such Insureds, as determined in accordance with the i provisions of this endorsement.

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ME-W-1 (1/1/88) ~

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Pcg3 6 Accepted and agreed by the first Named Insured in behalf of itself and every other Named Insured stated in the Declara-tions of the certificate of which this endorsement forms a part.

ARKANSAS POWER & LIGHT C0fiPANY (First Named Insured - Print or Type) _

Date ll!/f[67 By / MI MM I '(Sigr 2re of Authorized of ficer)

HENRY L. WARREN, Vice-President, Administrative Services (Prant or Type Name and Title of Officer)

Thic is to cor ily that this is a due copy of the original Endorremont hailng the endcrcement number t.nd being mede partof the Certificate of in;uranca bearing the number destgaared)ptcon for insurance coverago unc r tPc huc :;r Encrpy Liabilir,f/3iic/ (Fa$lity Workers Form). No ns ran  !

John L. Our.th :hi, Vico Fres: dent Liatia:y unJerariting Americtn Nuchar incureru l

l Effective Date of To form a part of this Endorsement January 1, 1988 of Certificate No. MU-47 12:01 A.M. Standard Time Issued to Arkansas Power & L1,ht Company l

Date of Issue October 19, 1987 For the Subscribing Companies MUTUAL ATOMIC ENERGY LIABILITY ERWRITERS By . ey w c

Erdorsement No. I Countersigned by ,

W/

Aut ho'r t'r e d )(e pr e's e n skit ive ME-W-1 (1/1/88)

Nuclear Energy Liability Insurance NUCLEAR ENERGY LIABILITY INSURANCE ASSOCIATION ADVANCE PREMIUM AND STANDARD PREMIUM ENDORSEMENT CALENDAR YEAR 1988

1. ADVANCE PREMIUM: It is agreed that the Advance Premium cue the ccmoanies for tne period designated above is:

$ 33,325.00 .

2. STANDARD PREMIUM AND oESERVE PREMIUM: In the absence of a cnange in the Acvance Prem1um indicated above, it is agreed that, subject to the provisions of the Indus-try Retrospective Rating Plan, the Standard Premium is said Advance Premium and the estimated Reserve Premium element of the Standard Premium is:

$ 26,660.00 .

This is to cert!!/ thet this !s a true copy of the original Endorcomcat heving the endersDme 1 t' umber a id being mado part of the CertifiOtto of Insurance besring the number do:gnate herre fer insuranc9 i ccveraga ur icr the NJc:eSr Encrgy Liabili' Pclir- a0ility Wo.Sers i~orm). fio 1 iurtq ,a e g, -

John L Qua, cchi Vico President- Llahunderwriting American Nuctaar Inturors Effective Date of this Endorsement January 1. 1988 Te form a part of Certificate No. NW-116 12:01 A.M. Standard Time Issued to Arkansas Power & Light Company Date of Issue January 22. 1988 For the Su ribing Co anies By

• PRESIDENT Endorsement No. 2 Countersigned I

, NE-W-2 (1/1/88)

Nuclear Energy Liability insurance NUCLEAR ENERGY LIAI11LITY INSURANCE ASSOCIATION INDUSTRY RETROSPECTIVE RATING PLAN PREMIUM ENDORSEMENT It is agreed that:

1. DEFINITIONS ,

With reference to the premium for the Certificate of which this endorsement forms a part:

"Master Worker Policy" means the Master Worker Policy issued by NELIA; "Certificate Holder" means the first Named Insured in a certificate issued to form a part of the Master Worker Policy; "advance premium", for any calendar year, is the esti-mated standard premium for that calendar year; "standard premium", for any calendar year, is the pre-mium for that calendar year computed in accordance with the companies' rules, rates, rating plans (other than the Industry Retrospective Rating Plan), premiums and minimum premiums applicable to this insurance. Standard premium includes elements for premium taxes, expenses, profit and contingencies, guaranteed cost insurance and estimated reserve premium. The elements of standard premium, other than for premium taxes and estimated reserve premium, are not subject to retrospective adjustment; "reserve premium" means that portion of the premium for a certificate (including reserve premium charges paid) that is specifically allocated under the Industry Retro-spective Rating Plan for ratable incurred losses; "industry reserve premium", for any period, is the sum of the reserve premiums for that period for all Certifi-cates issued to form a part of the Master Worker Policy; "retrospective adjustment ratio", for any period, is the ratio of the reserve premium for this Certificate for that period to the industry reserve premium for the same period; 1

"incurred losses" means the sum of all:

(1) losses and expenses paid by NELIA, and (2) reserves for losses and expenses as estimated by l NELIA, i

l NE-W-1 (1/1/88) Page 1

)

because of obligations assumed and expenses incurred in connection with such obligaticas by the members of NELIA under the Master Worker Policy; "ratable incurred losses" means 95% of incurred losses.

Ratable incurred losses are the portion of incurred losses which are not covered by the guaranteed cost insurance element of standard premiums; "non-ratable incurred losses" means 5% of incurred l o.3 s e s . Non-ratable incurred losses are the portion of incurred losses which are covered by the guaranteed cost insurance element of standard premiums; "reserve for refunds", as of any date, is the algebraic difference between:

(1) all industry reserve premium for the period fror January 1, 198c through such date, minus (2) the total for the same period of (a) all ratable incurred losses and (b) all industry reserve pre-mium refunds made under the Industry Retrospective Rating Plan by members of NELIAJ "industry reserve premium charge", for any period, means the amouat determined pursuant to the provisions of Section 4 of this endorsement for payment by the Named Insureds under Certificates; "reserve premium charge" means the portion of an indus-try reserve premium charge payable by the Named Insureds under this certificate; "industry rsserve premium refund", for any period, means the amount determined pursuant to the provisions of Section 4 of this endorsement for return to the Named Insureds under Certificates; "reserve premita refund" means the portion of an indus-try reserve premium refund returnable to the Named In-sureds under this certificate.

2. PAYMENT OF ADVANCE AND STANDARD PREMIUMS The Named Insureds shall pay the companies the advance premium stated in the declarations, for the period from the effective date of this Certificate through December 31 following. Thereafter, at the beginning of each calendar year while this Certificate is in force, the Named Insureds shall pay the advance premium for such 1 year to the companies. l l

The advance premium for each calendar year shall be l stated in the Advance and Standard Premium Endorsement l

NE-W-1 (1/1/88) Page 2

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.- t for the year issued by the companies as soon as pract'.c-able prior to or after the beginning of the year. L As soon as practicable af ter the end of a calendar yeak-or the Certificate Coverage Period, the standard premium for the preceding year shall be finally determined and stated in the Advance and Standard Premium Endorsemont for that year. If the standard premium exceeds the ed-vance premium paid for that year, the Named Insureds shall pay the excess to the companins; if less, the com-panies shall return to the Hared Insureds the. excess portion paid.

• The Named Insureds shall maintain records of the inform-ation necessary for premium computation and shall send copies of such records to the companies as directed, at the end of each calendar year, at the end of the (art 1 -

ficate Coverage Period and at such other times as ;P companies may direct.

3. SPECIAL RESERVE ACCOUNT; USE OF RESLnVE FREMIUMS NELIA shall maintain on behalf of its me'.abers a Special  !

Reserve Account for holding collectivelf all reserve I premiums paid for all Certificates issued to form a part of the Master Worker Policy. Such promiums, together  ;

with any undistributed net incom; realized thereon af ter taxes and investment expenses, shall be used for tite t following purposes only:

(1) to pay ratable incurred losses or, in the event i

ratable incurred losses are paid under the Master ,

Worker Policy from funds advanced by the members of '

NELIA subscribing the policy, to reimburse such members as a matter of first priority for the funds '

advanced; (2) to refund any amounts so held to the Nacol Insureds, as provided in Section 4. i No members of NELIA and no Named Insureds shall have any i

, individual interest in or claim upon amounts held in the Special Reserve Account, ru xcept to participate propor-

]

i tionally in any refund or reimbursement provided for above.

All reserve premiums paid or payable for this Certifi-cate may be used by NELIA to discharge the obligations ,

j of its members under the Master Worker Policy with re- '

) spect to the above purposes and arising out of claims l

made under any Certificate issued to form a part of the i Master Worker Policy.

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1 l 4. PAYMFNT OF RESERVE PREMIUM CHARGES AND REFUNDS As soon a;; practicable after each December 31 the con-canies will review the status of the reserve for refunds and report their findings to all Certificate Holders.

If, at any time, the companies find that there is a negative balance in the reserve for refunds and that such condition is likely to prevail, they shall deter-mine an app opriate industry reserve premium charge.

Similarly, if the companies find that there is a surplus positive balance, they shall determine an appropriate industry reserve premium refund.

The pcrtion of an industry reserve premium charge or an industry reserve premium refund that is:

(1) payable by the Named Insureds as a reserve premium charge, or (2) due such insureds as a reserve premium refund, shall be determined by multiplying the industry reserve '

premium charge or the industry reserve premium refund by i the retrospective adjustment ratio applicable to this  !

Certificate.

The amount of any reserve premium charge shall be stated in a Retrospective Reserve Premium Charge Endorsement.

The charge shall be paid promptly after receipt of the endorsement.

When all claims covered by the Master Worker Policy are closed the companies shall make a final review and re- ,

port, and shall determine a final industry reserve premium charge or industry reserve premium refund equal {

i to the amount of the balance. l

5. FINAL PREMIUM The final premium for this Certificate shall be (a) the sum of the standard premiums for each calendar year, or l portion thereof, during which the Certificate remains in force plus (b) the sum of all reserve premiums, includ-ing all reserve premium charges, minus (c) the sum of {

l all reserve premium refunds. '

6. RESERVE PREMIUM CHARGE AGREEMENT In consideration of (a) the participation of Named Insure t a in other Certificates subject to the Industry Retrospective Rating Plan, (b) the undertaking of such Named Insureds to pay their appropriate share of any industry reserve premium charge and (c) the obligations assumed by the members of NELIA under the Master Worker NE-W-1 (1/1/88) Page 4

Policy, the Named Insureds, by acceptance of the Master Worker Policy, agree:

(1) That the insurance provided by the Master Worker Policy applies collectively to all claims covered by the policy through any and all Certificates issued to forn. a part of the policy.

(2) That the right of each Named Insured under a Cert-ificate to receive reserve premium refunds and the obligation of each such insured to pay reserve premiums charges applies to all claims covered by the Master Worker Policy and continues until all such claims are closed, whether or not such claims were before the inception of the Certificate or after its termination.

(3) To pay all reserve premium charges due promptly after receipt of the Retrospective Reserve Premium Charge Endorsement, whether or not the Certificate is terminated. Any reserve premium charge shall be overdue if not paid within 60 days of the date of the invoice for the charge.

overdue reserve premium charges shall bear interest from the due date until paid at an annual rate equal to the sum of (a) 3% plus (b) a rate of in-tersst equal to Moody'r 'verage Public Utility Bond Yield described in -

issue of Moody's Bond Survey current on the e date. Any reserve pre-mium refund due to Named Insureds under a Certificate shall be used to pay any overdue reserve premium charges to such Named Insureds.

7. RESERVE PREMIUM REFUND AGREEMENT Each member of NELIA subscribing the Master Worker Policy for any calendar year, or portion thereof, with respect to which an industry reserve premium refund is determined to be payable thereby agrees for itself, severally and not jointly, and in the respective pro-portion of its liability assumed under the Master Worker Policy for that calendar year, to return promptly to the Named Insureds that portion of such refund due such Inrureds, as determined in accordance with the provi-sions of this endorsement.

NE-W-1 (1/1/88) page 5

, Page 6 4 .

Accepted and agreed ny the first Named Insured in behalf of itself and every other Named Insured stated in the Declara-tions of the certificate of which this endorsement forms a part.

ARKANSAS POWER & LIGHT C0itPANY (First' Named Insured - Print or Type)

Date // l'i 8 7 By LAl?n ? n (Signt *ge of Authorized Of ficer)

HENRY L. WARREN, Vice-President, Administrative Services (Print or Type Name and Title of Officer) lhic is to cortify that this is a true copy of the original Endorsemont having ihe codorsement number nd being made p:rt of the Certificate of in.rurance bosring the number cecignated tercon for insurance l coverage unc 'r the Nucicar Energy Liabl!!!' olicy (Facility Workets

~

d.. 'W Form), f40 In. :rargaffm John L. Guatti chi, Vica President - Licbihty adorarliing American Nuclocr insuiers l

Effective Date of to form a part of this Endorsement January 1, 1988 of Certificate No. NW-ll6 12:01 A.M. Standard Time Issued to Arkansas Power & Light Company Date of Issue October 19, 1987 For the scribing companies By General Manager Endorsement No, I Countersigned by j ,

NE *n'-l (1/1/88)