June 3, 2018 by David Gambrill, Editor-in-Chief
The Nuclear Insurance Association of Canada (NIAC), a domestic pool of Canadian insurers and reinsurers, has developed a new, made-in-Canada, end-to-end claims administration system to respond to nuclear claims.
Two legislative changes last year prompted the development of NIAC’s innovative claims solution. First, the Nuclear Liability and Compensation Act (NLCA) came into force in January 2017, broadening the heads of damages for eligible claimants and increasing operator’s limits of liability to $1 billion. Second, Canada entered into the Convention on Supplementary Compensation for Nuclear Damage, a multilateral international treaty to establish a global nuclear civil liability regime.
Taken together, these two milestones called for a new approach to claims response.
“Nuclear liability claims are completely unique because they combine the most challenging aspects of a catastrophe-type claim, a class action type claim, and a casualty-type claim,” Wendy Hayden, manager of underwriting and operations for NIAC, said at the 2018 Leadership Forum held on March 1 in Toronto.
Elaborating in response to questions from Canadian Underwriter, Hayden noted that claims related to nuclear incidents would be third-party losses as opposed to first-party losses, which changes the relationship between claimants and the insurers.
“A large number of cat losses are weather related and there would likely be a number of insurers handling claims for their customers,” Hayden says by way of example. “Most commercial, homeowner and automobile policies exclude nuclear peril, so the losses would not be first-party, but rather third-party losses handled by insurers of the nuclear operator.”
Nuclear operators are required to carry insurance using the policy wording approved by Natural Resources Canada in accordance to the Nuclear Liability and Compensation Act [NLCA].
Read the full article in the Digital Edition of the June 2018 Canadian Underwriter.
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