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Nuclear Energy pp 373-379 | Cite as

Insurance and Nuclear Power

The Price-Anderson Act
  • Chris Whipple

Abstract

The Price—Anderson Act, which establishes procedures for insuring nuclear facilities (including nuclear power plants), was enacted with the dual purpose of protecting the public and encouraging the development of a private nuclear energy industry. As with most aspects of commercial nuclear power, this insurance system has become a target of criticism in recent years, criticisms that can generally be grouped into four categories: that the Price—Anderson Act provides a federal subsidy to the nuclear power industry [1], that the public would be inadequately compensated in the event of a nuclear accident [2–4], that the exclusion from coverage of damage caused by nuclear accidents from all homeowners insurance policies represents a lack of confidence in nuclear power by private insurers [1], and that the Price—Anderson Act removes incentives for safe operation of nuclear power plants [5]. These criticisms have been reviewed in several publications [6–8], and a brief synopsis of these reviews, coupled with the most recent and authoritative review available, that of the Supreme Court (see Note 4), will be given following a description of nuclear insurance as practiced under the Price—Anderson Act.

Keywords

Nuclear Power Plant Reactor Operator Nuclear Accident Liability Insurance Nuclear Power Industry 
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References and Footnotes

  1. 1.
    Public Interest Report, The Price–Anderson Act and the Nuclear Industry: The Attempt to Insure the Uninsurable, a joint project of the Environmental Alert Group ( Los Angeles) and the Environmental Education Group, undated paper, likely published sometime in 1975. The paper opens with a reprint of a standard nuclear exclusion clause from a homeowners insurance policy.Google Scholar
  2. 2.
    H. S. Denenberg, Nuclear power: Uninsurable, Progressive Magazine (Nov. 1974).Google Scholar
  3. 3.
    The California Nuclear Initiative (Proposition 15, June 8, 1976 ballot, defeated) contained, under section 67503(a), the requirement that “after one year from the date of passage of this measure, the liability limits assured, either by law or waiver, as determined by a California court of competent jurisdictioGoogle Scholar
  4. 4.
    The Carolina Environmental Study Group, the Catawba Central Labor Union, and 40 individuals sued Duke Power and the Nuclear Regulatory Commission. This action, which commenced in 1973, sought among other things a declaration that the Price—Anderson Act was unconstitutional. On April 5, 1977, the U.S. District Court for the Western District of North Carolina ruled that the Act was unconstitutional in two respects: (1) it violated the Due Process Clause of the Fifth Amendment because it allowed injuries to occur without assuring adequate compensation to the victims; (2) the Act offended the equal protection component of the Fifth Amendment by forcing the victims of nuclear incidents to bear the burden of injury, whereas society as a whole benefits from the existence and development of nuclear power. This ruling was overturned by a unanimous vote of the Supreme Court on June 26, 1978.Google Scholar
  5. 5.
    J. M. Marshall and L. I. Lieb, Liability and Safety in Nuclear Power Plants, UCLA Report UCLA-ENG-7724 (Feb. 1977).Google Scholar
  6. 6.
    C. Whipple, Insurance of Nuclear Power Plants, EPRI Report (June, 1976 ).Google Scholar
  7. 7.
    K. Solomon and D. Okrent, Catastrophic Events Leading to De Facto Limits on Liability, UCLA Report UCLA-ENG-7732 (May 1977). [See also Some Comments on De Facto Limits on Liability, Rand P-5885 (June 1977) by the same authors.]Google Scholar
  8. 8.
    C. Whipple, K. Solomon, and D. Okrent, Insurance and Catastrophic Events: Can We Expect De Facto Limits on Liability Recoveries?, Rand P-5940 (March 1978). Also published in Proceedings of the ANS Topical Meeting on Probabilistic Analysis of Nuclear Reactor Safety, Los Angeles, May 8–10, 1978.Google Scholar
  9. 9.
    Public Law 94–197, 94th Congress, H.R. 8631, December 31, 1975, 89 STAT. 1113.Google Scholar
  10. 10.
    Public Law 94–197, 94th Congress, H.R. 8631, December 31, 1975, 89 STAT. 1112.Google Scholar
  11. 11.
    American Nuclear Insurers Letter, Vol. 3, No. 6 (June 1979); available from American Nuclear Insurers, The Exchange, Building 3, Farmington Avenue, Farmington, Conn. 06032.Google Scholar
  12. 12.
    NEL—PIA Reports, Report No. 3, Revised 9/77. NEL—PIA is the Nuclear Energy Liability—Property Insurance Association, a pool of liability and property insurance companies that combine their resources to insure nuclear facilities and supplies.Google Scholar
  13. 13.
    H.R. Rep. No. 89–883, 89th Congress, 1st Session 6–7 (1965).Google Scholar

Copyright information

© Plenum Press, New York 1985

Authors and Affiliations

  • Chris Whipple
    • 1
  1. 1.Electric Power Research InstitutePalo AltoUSA

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