Managing Nuclear Risks in the United States Marjorie Berger, Esq. Vice President, Liability Claims American Nuclear Insurers 2011 ABA Annual Meeting Section of Public Utility, Communications and Transportation

American Nuclear Insurers ANI is a joint underwriting association of major U.S. insurance and reinsurance companies ANI’s provides third party nuclear liability insurance to U.S. commercial nuclear risks in accordance with the Price Anderson Act (PAA) ANI insures every nuclear power plant in the United States and other facilities that comprise the nuclear fuel cycle

Price Anderson Act The PAA (42 USC § 2210 et seq) is the legal cornerstone for managing nuclear risk in the United States The PAA was enacted in 1957 to encourage the private development of nuclear power The PAA mandated financial protection for commercial nuclear facilities; encouraged the development of a private insurance pool; and established a liability regime for victims of nuclear incidents

Price Anderson Act The PAA applies to NRC licensees involved in the nuclear fuel cycle including: – Production and utilization facilities – Fuel reprocessing plants – Suppliers and transporters

Price Anderson Act Key Provisions of the PAA – Two Layers of Financial Protection Primary layer consisting of liability insurance available from private sources – Currently $375 million Secondary layer (SFP) consisting of an industry retrospective rating plan – Currently $117.5 million/reactor $17.5 million/yr – Government Indemnity Limited to $500 million

Price Anderson Act Key Provisions of PAA – Aggregate Limit on Liability $375 million primary layer $12.2 billion SFP $12.6 billion total – Damages in excess of aggregate liability Congressional action – Appropriation of funds – Approval of compensation plans

Price Anderson Act Key PAA Provisions – Evacuations/Emergency Assistance Initiated by State or political subdivision Immediate financial assistance – Individuals – Businesses – Local government – Compensation plans NRC report to Congress Court approval of plan for distribution – 15% rule

Price Anderson Act PAA Liability Regime – Economic Channeling of Liability to Licensees Other persons indemnified DOE contractors – Federal Court Jurisdiction – Public Liability Action – Waiver of Defenses for an ENO ENO criterion based on NRC regulations – Defense Costs Within Limits

Public Liability Actions A public liability action is any claim asserting legal liability arising our of a nuclear incident A nuclear incident is any occurrence … causing … bodily injury, sickness, disease or death, or … damage to property arising out of or resulting from the radioactive, toxic, explosive or other hazardous properties of source, special nuclear, or by-product material A public liability action is the exclusive federal remedy for a claim arising out of a nuclear incident

Public Liability Actions The majority of federal courts require plaintiffs who assert claims for public liability to establish that: – They were exposed to a dose of radiation greater than NRC permissible dose limits (duty owed), – Such exposure can and more likely than not caused the claimed injury (general and specific causation), and – They have a present physical injury or actual property damage

Price Anderson Act – Presidential Commission on Catastrophic Nuclear Accidents Recommendations Retention of judicial model Federal statutory and common law Premature to modify burden of proof for latent injuries