I n su ra n c e I n d u s t r y C a t a s t r o p h e M a n a g e m e n t P r a c t i ce s
Nuclear Facilities The commercial nuclear power industry in the United States has the unique potential of a nuclear incident creating catastrophic loss. The industry also has a long-term investment in power generating infrastructure, which by its nature cannot be wound down quickly. The nuclear industry therefore has a critical need for adequate, dependable, third-party liability insurance. Virtually all property insurance policies, whether provided to individuals or businesses, include policy language to exclude coverage for loss by nuclear reaction, radiation, or radioactive contamination, regardless of the cause. Hence, to ensure protection for these individuals and businesses,the federal government also has an incentive to ensure the availability of adequate and dependable thirdparty liability coverage for the nuclear power industry. This awareness led to the Price-Anderson Act, which requires commercial nuclear power plant operators to provide financial protection to the public in an amount equal to the maximum liability insurance capacity available from private sources. Currently this limit is $200 million. To meet the Price-Anderson requirement and ensure that insurance capacity would remain available to operators of nuclear power reactors, a joint underwriting association, American Nuclear Insurers (ANI) was formed. It is an unincorporated association of approximately 60 member insurance companies that pool their financial assets to provide property and liability coverage to the nuclear industry, both in the United States and worldwide. Other counties with significant commercial nuclear power generation have similar organizations, or pools, and frequently these organizations provide reinsurance to each other to increase capacity. Specialized loss prevention engineering services are also an important function of the ANI. The approach taken by the federal government has the advantage of minimizing any federal subsidies and ensures that the costs of providing protection to the public are borne by the commercial nuclear power industry.
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