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