1. Nuclear Insurance A Global Perspective on Risk Presented by Wendy Hayden, FCIP CRM Nuclear Insurance Association of Canada to Women in Nuclear Golden Horseshoe West September 17, 2015

2. Nuclear Insurance - A Global Perspective on Risk Insurance Risk Characteristics for You and Nuclear Nuclear Conventions around the world –List the major conventions –Purpose of Nuclear Convention –7 Principles common in Nuclear conventions Canadian context and update Nuclear Insurance Pools

3. About NIAC We provide true risk transfer, secure insurance capacity and collaborates with the world’s nuclear experts to create innovative domestic solutions. NIAC has a 55-year history of partnering with Insurers around the globe.

4. Insurance Risk Characteristics You Law of large numbers Claim frequency predictable Low Severity Analytics Low Limits Capacity - reinsured Nuclear Very small number of risks Claim frequency unpredictable Extremely High Severity Risk Managed Account High Limits Capacity – net

5. Major Nuclear Conventions CSC Convention on Supplementary Compensation Price- Anderson Joint Protocol Pari s Vie nna

6. Purpose of Nuclear Conventions 1. Adequate compensation to the public 2. Ensure growth of nuclear industry

7. 7 Principles Common in Nuclear Conventions 1. Liability is channelled exclusively 2. Liability of Operator is absolute 3. Liability is limited in amount 4. Liability is limited in time 5. Operator must maintain financial security 6. Jurisdiction over actions – exclusive territory 7. Non-discrimination of victims

8. Canadian Context Canada’s nuclear industry: –$5Billion in electricity annually –$1Billion in uranium exports annually –30,000 jobs across Canada Canada signs CSC in 2013 –Domestic legislation needs to be updated to comply with CSC requirements Bill C-22 omnibus bill entitled “Energy Safety and Security Act” legislation includes: –NLCA - Nuclear Liability and Compensation Act Bill introduced 2014 Legislation passed 2015 Entry into force, TBA (2016)

9. Canadian Update Nuclear Liability and Compensation Act Key changes 1. Increased limit of liability from $75 million to $1Billion 2. Prescription period extended from 10 to 30 years –Latent injuries 3. Enhanced compensation for victims –Trauma related to bodily injury –Economic loss e.g. loss of wages, business interruption –Damage to the environment

10. How Insurance Pools work for Nuclear Large capacity amassed by many Insurers committing a limited amount –Spread of risk achieved –Net limit, eliminating spirals –Reinsure with other nuclear insurance pools Pools provide a concentration of specialized expertise in the areas of underwriting, risk control engineering and claims handling Pooling System –More than 20 nuclear insurance pools in operation worldwide –> $2Billion USD capacity available –Insures approximately 70% of the reactors in the world

11. Insurance Coverage Available Nuclear Liability Property Course of Construction Machinery Breakdown Business Interruption

12. NIAC Pool Features of the NIAC Pool Only insure nuclear peril risk in Canada Domestic pool –NIAC does not reinsure risk of other pools NIAC members are Property/Casualty Insurers and Reinsurers –Licensed by OSFI to conduct business in Canada Coinsure with Nuclear Risk Insurer –All NIAC capacity is used first, before reinsuring with other pools –NRI is British Nuclear Insurance Pool and does reinsure with other Nuclear Insurance Pools NIAC / NRI can underwrite the full $1Billion limit of liability required by NLCA

13. Questions ?

14. Price-Anderson Act United States Act passed in 1957 –Last renewed in 2005 for 20 years governs liability-related issues for all non-military nuclear facilities constructed in the United States No-fault type system Operator funded, separate from insurance Establishes a capped limit of liability for an Operator Operators are required to purchase maximum insurance available in the marketplace (currently $375million) Price Anderson

15. Paris Convention Organization for Economic Cooperation and Development (OECD) –Nuclear Energy Agency (NEA) Adopted in 1960 –Ratified in 1968 Mostly western European countries NEA today consists of 31 countries in Europe, North America and the Asia-Pacific region –International cooperation –(For example, Canada and USA are members) –Centre of excellence Pari s

16. Vienna Convention United Nations –International Atomic Energy Agency (IAEA) Adopted 1963 –Ratified 1977 Any country not part of Paris Convention (mostly eastern European countries) Vienna

17. Joint Protocol Established in 1988 –Following the Chernobyl accident link between Paris and Vienna conventions Creating one expanded liability regime Joint Protocol

18. CSC – Convention on Supplementary Compensation Adopted in 1997 –Entered into force 2015 Countries adhering to CSC: Argentina, Morocco, Romania, the United Arab Emirates, USA and Japan –Canada plans, see: Canadian Context Increases amount of compensation available in the event of a nuclear accident Funds from Contracting Parties CSC Convention on Supplementary Compensation