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Emerging nuclear insurance landscape should be communicated to Canadians


August 15, 2014   by Canadian Underwriter


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Canadians should be aware of an emerging nuclear insurance landscape that is putting upward pressure on capacity for the country’s nuclear operators, the Nuclear Insurance Association of Canada (NIAC) suggests.

The landscape is changing in light of recent catastrophic events – including Fukushima and Lac Mégantic – and anticipated changes to federal legislation that propose increasing the liability amount Canadian nuclear power operators would be responsible for in the event of a nuclear incident.

“The liability limit in Canada is set at $75 million, a figure which is generally considered ‘outdated’ at best, but could be raised to $1 billion,” notes a statement this week from NIAC, a voluntary, non-profit, unincorporated association of insurers providing property and liability insurance to nuclear installations operating in Canada.

In addition, NIAC reports that the number of categories under which compensation is available is expected to be broadened, and improvements made to the procedures for delivering compensation.

Proposed legislative changes, detailed in Bill C-22, are currently progressing through Parliament. Previous legislative attempts to increase the 45-year-old limit to $650 million, in addition to providing the minister responsible with the authority to increase the limit in the future, have proved unsuccessful.

In June 2013, however, federal natural resources minister Joe Oliver commented publicly about making plans to increase the liability cap for the nuclear industry, a cap that would “continue to require that the liability of the operator be absolute and exclusive,” notes the NIAC statement.

“The increase in liability limits should be communicated to all Canadians so they are aware of the new landscape,” NIAC general manager Colleen DeMerchant says in the statement.

In light of the recent incidents and the progress of Bill C-22, NIAC has prepared for an expected increase of nuclear liability from $50 million to $1 billion.

Part of the association’s preparedness is new branding and communications, as well as the launch of a new website. NIAC’s new identity tagline, Experience Matters, reflects the “pool” having been around for more than five decades.

“We believe that we bring the value of experience to the nuclear industry and that does matter,” DeMerchant says in a video.

“With the limit increasing so substantially, we obviously want to have more Canadian capacity. So, we felt we want to have a proper and consistent message about who we are, and what we do. Then we can go out to the various stakeholders – our current stakeholders and also maybe people who participated in the past or companies that haven’t participated before,” she adds.

While access to cheap safe energy is essential to the functioning of modern economies, DeMerchant notes in the statement, this energy “must not only be secure, but safe during the delivery to the end-users; it must also be insured.”

Speaking at a NIAC luncheon in May, Jacques Henault, an analyst of nuclear liability and emergency preparedness for Natural Resources Canada, said Canada is “no longer are in line with international standards.”

While many principles will remain the same should Bill C-22 be passed, Henault suggested one key difference in the proposed legislation is that it would allow Canada to become a party to the Convention on Supplementary Compensation for Nuclear Damage, which Canada signed in December 2013.

“It’s important that we as a country join one of these conventions because it addresses liability and compensation for transboundary and transportation incidents,” he explained.

“The benefits of joining a convention are really to address liability compensation for transboundary and transport nuclear installation incidents and provide more universal protection for citizens in terms of adequate funds and not having to prove negligence. And it’s very important for encouragement the participation of suppliers and contractors in worldwide nuclear development,” Henault added.


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