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

 Voluntary unincorporated Joint Underwriting Association – Nuclear Insurance Pool  Located in Glastonbury, Connecticut  28 Staff Members  Founded in

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. ANI’s Primary Purpose: American Nuclear Insurers

Power Reactors Other Commercial Nuclear Facilities Suppliers & Transporters ANI Book of Business 4

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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

 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

 Definition of Insured  Policy Period and Limits  Defense Costs Within Limits Three Fundamental Coverage Concepts 8

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

Liability Coverage “D”  Food  Shelter  Transportation  Police Services 10 Reasonable additional costs for For Time Evacuation Order Is In Effect + 30 Days

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:  $ million per reactor payable at $17.5 million per year 11

Evolution of Limits... Financial Protection 12

Growth in Nuclear Liability Limits ANI: $60 Million Govt. Indemnity: $500 Million SFP: $310 Million Govt. Indemnity: $110 Million ANI: $140 Million 13

ANI SFP Govt. Indemnity Growth in Nuclear Liability Limits Limit: $ Billion 1977 Limit: $560 Million 14

Accident at Three Mile Island 15

TMI - The first two days...  March 28, 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

TMI - Evacuation Advisory March 30, 1979 Pennsylvania Governor Richard Thornburgh Issues An Advisory Evacuation Notice 17

TMI - Opening of the Claim Office ANI’s claim office is open for business within 20 hours of the Advisory Evacuation Notice. 18

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

Three Mile Island: Breakdown of Claims Payments and Claims Expense Payments 20 Total Payout: Approx. $71 million

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

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

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

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

Ten Common Questions 10. How will ANI coordinate payments for evacuees with similar payments made by FEMA? 25