NUCLEAR INSURANCE LEGISLATION RAISES COVERAGE TO $7.4 BILLION

NUCLEAR INSURANCE LEGISLATION RAISES COVERAGE TO $7.4 BILLION

The Senate revamped the nuclear liability law to provide no-fault insurance for accidents at nuclear power plants.

The reconstituted Price-Anderson Act would raise insurance coverage from $700 million to $7.4 billion.While the insurance level is the same as in the House-passed bill, the measure that passed the Senate Friday would extend the law for 20 years rather than the 10 years in the House version.

The vote capped three days of debate on whether the government ought to guarantee another $7 billion third tier of insurance to ensure that victims of a nuclear catastrophe would be compensated. Also in dispute was how long reauthorization should last when the insurance is based on the number of reactors operating.

Other issues involved whether federal contractors, who will receive $7 billion in protection without any private insurance, should be held responsible up to the level of their profit on a contract for gross negligence or willful misbehavior.

In all cases, amendments were rejected.

The legislation maintains the current $160 million primary layer of insurance coverage for nuclear power plants that is provided through two nuclear insurance pools.

The second tier, which is a retrospective premium after an accident, is raised from $5 million for each reactor to $63 million. Insurers taking part in the first tier administer this fund, as well.

Debate over the length of reauthorization centered around the insurance provisions. Sen. James McClure, R-Idaho, sought a 30-year extension, but he was beaten back by arguments that in 30 years there will be so few operating nuclear power plants that insurance levels could not be maintained.

Sen. John Breaux, D-La., pointed out that the Nuclear Regulatory

Commission estimates that after 30 years there would only be a $3.75 billion fund.

Utility companies should be petrified of a 30-year extension, Sen. Breaux said, because faced with the possibility of only a $3.75 billion fund Congress would assess each plant left a lot more money.

But Sen. Breaux also fought against the 10-year extension in the House bill saying that 20 years is a reasonable compromise for an insurance plan.

Sen. Gordon Humphrey, R-N.H., argued for a 10-year extension, saying if we are going to play insurance company to America's nuclear power industry, let us limit our liabilities by reauthorizing this insurance program for 10 years.

The Senate voted, 50-34, for the Breaux proposal.

The Senate debate focused on the liability of government contractors.

Beaten back were attempts to make contractors liable for any portion of accidents due to their own misdeeds. Another idea rejected was to set up an independent oversight group to investigate safety and health violations at weapons-making facilities run by contractors for the Department of Energy.

The basic insurance scheme is unchanged from current law. If an accident occurs, benefits would be paid out on a no-fault basis so victims do not have to prove that anyone was negligent.

If damages exceed the $7 billion level, Congress is supposed to act to devise a system for additional payments.

The Senate bill includes language to require the president to expedite the sending of an additional financing proposal to Congress and for Congress to handle this legislation quickly.

Insurers were pleased that the Senate acted.

The renewal legislation maintains the basic structure of Price-Anderson's no-fault compensation system intact, while dramatically enhancing the amount of financial protection to protect the public and persons who may be liable, Joe Marrone, general counsel of American Nuclear Insurers, commented.

The $160 million primary tier of coverage is provided by companies with membership in this group and those belonging to the Mutual Atomic Energy Liability Underwriters.