Third Party Nuclear Liability Insurance Richard D. Jones Director, Underwriting American Nuclear Insurers.

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Third Party Nuclear Liability Insurance Richard D. Jones Director, Underwriting American Nuclear Insurers Slide 2 Voluntary unincorporated Joint Underwriting Association Nuclear Insurance Pool Located in Glastonbury, Connecticut 28 Staff Members Founded in 1956 2 Slide 3 3 ANI issues insurance policies that provide policyholders coverage for claims for nuclear bodily injury and nuclear property damage from people who live, work, and own homes and businesses near insured nuclear facilities. ANIs Primary Purpose: American Nuclear Insurers Slide 4 Power Reactors - 104 Other Commercial Nuclear Facilities - 125 Suppliers & Transporters - 220 ANI Book of Business 4 Slide 5 6 Slide 6 Price-Anderson Enacted In 1957 To: Encourage The Private Development Of Nuclear Power. Establish A Legal Framework For Potential Liability Claims. Provide A Ready Source Of Funds To Compensated Injured Victims Of A Nuclear Accident. 6 Slide 7 ANI is founded in 1956 Initial Capacity is $60 million Federal Government provides a second layer of coverage of $500 million Nuclear Insurance Pooling System Established 7 Slide 8 Definition of Insured Policy Period and Limits Defense Costs Within Limits Three Fundamental Coverage Concepts 8 Slide 9 9 First Three Renewals 1967 Definition of Extraordinary Nuclear Occurrence (ENO) 1977 Second Layer of Financial Protection Added $ 5 million per operating reactor 1988 Definition of public liability expanded to include some costs of evacuation Price-Anderson Act Slide 10 Liability Coverage D Food Shelter Transportation Police Services 10 Reasonable additional costs for For Time Evacuation Order Is In Effect + 30 Days Slide 11 2005 Price-Anderson renewed for 20 years Maximum Annual Retro increased from $10 million to $15 million Both maximum annual and total retro obligations now subject to inflation adjustment Current Amounts: $117.495 million per reactor payable at $17.5 million per year 11 Slide 12 Evolution of Limits... Financial Protection 12 Slide 13 Growth in Nuclear Liability Limits 1957 - 1977 ANI: $60 Million Govt. Indemnity: $500 Million SFP: $310 Million Govt. Indemnity: $110 Million 19771957 ANI: $140 Million 13 Slide 14 ANI SFP Govt. Indemnity Growth in Nuclear Liability Limits 1977 - 2007 2008 Limit: $12.519 Billion 1977 Limit: $560 Million 14 Slide 15 Accident at Three Mile Island 15 Slide 16 TMI - The first two days... March 28, 1979 0400 Accident Occurs 0730 ANI Notified March 29, 1979 ANI Personnel Arrive In Pennsylvania Local Claims Office Authorized 51 Claims Adjusters Recruited From Member Companies 16 Slide 17 TMI - Evacuation Advisory March 30, 1979 Pennsylvania Governor Richard Thornburgh Issues An Advisory Evacuation Notice 17 Slide 18 TMI - Opening of the Claim Office ANIs claim office is open for business within 20 hours of the Advisory Evacuation Notice. 18 Slide 19 TMI - ANI Response ANI alerts media (television, radio and newspapers) of the location of the claims office. More than $1 million in evacuation claims will be paid. 19 Slide 20 Three Mile Island: Breakdown of Claims Payments and Claims Expense Payments 20 Total Payout: Approx. $71 million Slide 21 Terrorism Coverage ANI Covers Terrorism Losses Subject To The Terms And Conditions Of Our Policies And Certified By The Terrorism Risk Insurance Act Of 2002 (TRIA). An Industry Aggregate Limit Applies To Losses From Terrorism Not Certified By TRIA. 21 Slide 22 Ten Most Common Questions 1. Can evacuated people go to a hotel or motel? 2. How are burglary or looting losses covered if they occur after evacuation? 3. Is loss of business by stores, restaurants, etc. due to evacuation covered? 22 Slide 23 Ten Most Common Questions 4. Do claimants have to hire lawyers? 5. Are volunteers or expenses by volunteers (amateur radio operators, Red Cross, etc.) reimbursed? 6. How are losses to crops or farm products handled? What about product boycotts? 23 Slide 24 Ten Common Questions 7. How does ANI determine where the claims office will be set up? 8. How is the claims office operated? What kind of information will be required of claimants? 9. If there is a vehicle accident during evacuation, how is it covered? 24 Slide 25 Ten Common Questions 10. How will ANI coordinate payments for evacuees with similar payments made by FEMA? 25

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