10 C.F.R. Subpart B—Provisions Applicable Only to Applicants and Licensees Other Than Federal Agencies and Nonprofit Educational Institutions
Title 10 - Energy
This subpart applies to applicants for and holders of licenses issued pursuant to 10 CFR parts 50 and 54 of this chapter authorizing operation of nuclear reactors, except licenses for the conduct of educational activities issued to, or applied for, by persons found by the Commission to be nonprofit educational institutions and except persons found by the Commission to be Federal agencies. This subpart also applies to persons licensed to possess and use plutonium in a plutonium processing and fuel fabrication plant. [56 FR 64980, Dec. 13, 1991] (a) Each licensee is required to have and maintain financial protection: (1) In the amount of $1,000,000 for each nuclear reactor he is authorized to operate at a thermal power level not exceeding ten kilowatts; (2) In the amount of $1,500,000 for each nuclear reactor he is authorized to operate at a thermal power level in excess of ten kilowatts but not in excess of one megawatt; (3) In the amount of $2,500,000 for each nuclear reactor other than a testing reactor or a reactor licensed under section 104b of the Act which he is authorized to operate at a thermal power level exceeding one megawatt but not in excess of ten megawatts; and (4) In an amount equal to the sum of $300,000,000 and the amount available as secondary financial protection (in the form of private liability insurance available under an industry retrospective rating plan providing for deferred premium charges equal to the pro rata share of the aggregate public liability claims and costs, excluding costs payment of which is not authorized by section 170o.(1)(D) of the Act, in excess of that covered by primary financial protection) for each nuclear reactor which is licensed to operate and which is designed for the production of electrical energy and has a rated capacity of 100,000 electrical kilowatts or more: Provided, however, that under such a plan for deferred premium charges for each nuclear reactor which is licensed to operate, no more than $95,800,000 with respect to any nuclear incident (plus any surcharge assessed under subsection 170o.(1)(E) of the Act) and no more than $15,000,000 per incident within one calendar year shall be charged. Except that, where a person is authorized to operate a combination of 2 or more nuclear reactors located at a single site, each of which has a rated capacity of 100,000 or more electrical kilowatts but not more than 300,000 electrical kilowatts with a combined rated capacity of not more than 1,300,000 electrical kilowatts, each such combination of reactors shall be considered to be a single nuclear reactor for the sole purpose of assessing the applicable financial protection required under this section. (b) In any case where a person is authorized pursuant to part 50 of this chapter to operate two or more nuclear reactors at the same location, the total primary financial protection required of the licensee for all such reactors is the highest amount which would otherwise be required for any one of those reactors: Provided, That such primary financial protection covers all reactors at the location. [25 FR 2944, Apr. 7, 1960, as amended at 34 FR 706, Jan. 17, 1969; 37 FR 3423, Feb. 16, 1972; 39 FR 5310, Feb. 12, 1974; 40 FR 7082, Feb. 19, 1975; 42 FR 49, Jan. 3, 1977; 42 FR 20140, Apr. 18, 1977; 44 FR 20632, Apr. 6, 1979; 54 FR 24158, June 6, 1989; 58 FR 42852, Aug. 12, 1993; 63 FR 39016, July 21, 1998; 68 FR 46930, Aug. 7, 2003; 70 FR 61888, Oct. 27, 2005] (a) Each licensee is required to have and maintain financial protection for each nuclear reactor for which the amount of financial protection is not determined in §140.11, in an amount determined pursuant to the formula and other provisions of this section: Provided, That in no event shall the amount of financial protection required for any nuclear reactor under this section be less than $4,500,000 or more than $74,000,000. (b)(1) The formula is: x=B times P (2) In the formula:
x=Amount of financial protection in dollars. B=Base amount of financial protection. P=Population factor. (3) The base amount of financial protection is equal to $185 times the maximum power level, expressed in thermal kilowatts, as authorized by the applicable license. (4) The population factor (P) shall be determined as follows: (i) Step 1. The area to be considered includes all minor civil divisions (as shown in the 1950 Census of Population, Bureau of the Census, or later data available from the Bureau) which are wholly or partly within a circle with the facility at its center and having a radius in miles equal to the square root of the maximum authorized power level in thermal megawatts. (ii) Step 2. Identify all minor civil divisions according to the same census which are in whole or in part within the circle determined in Step 1. Determine the population of each such minor civil division (according to the same census or later data available from the Bureau of the Census). For each minor civil division, divide its population by the square of the estimated distance to the nearest mile from the reactor to the geographic center of the minor civil division: Provided, That no such distance shall be deemed to be less than one mile. If the sum of the quotients thus obtained for all minor civil divisions wholly or partly within the circle is 1,000 or less, the population factor is 1. If the sum of these quotients is more than 1,000 but not more than 3,000, the population factor is 1.2. If the sum of these quotients is more than 3,000 but not more than 5,000, the population factor is 1.4. If the sum of these quotients is more than 5,000 but not more than 7,000, the population factor is 1.6. If the sum of these quotients is more than 7,000 but not more than 9,000, the population factor is 1.8. If the sum of these quotients is more than 9,000 the population factor is 2.0. (c) In any case where a person is authorized pursuant to part 50 of this chapter to operate two or more nuclear reactors at the same location, the total financial protection required of the licensee for all such reactors is the highest amount which would otherwise be required for any one of those reactors: Provided, That such financial protection covers all reactors at the location. (d) Except in cases where the amount of financial protection calculated under this section is a multiple of $100,000, amounts determined pursuant to this section shall be adjusted to the next highest multiple of $100,000. [25 FR 2944, Apr. 7, 1960, as amended at 26 FR 1397, Feb. 17, 1961; 32 FR 8125, June 7, 1967] Each holder of a construction permit under part 50 of this chapter authorizing construction of a nuclear reactor, who is also the holder of a license under part 70 of this chapter authorizing ownership possession and storage only of special nuclear material at the site of the nuclear reactor for use as fuel in operation of the nuclear reactor after issuance of an operating license under part 50 of this chapter, shall (during the period prior to issuance of the license authorizing operation of the reactor) have and maintain financial protection in the amount of $1,000,000. Proof of financial protection shall be filed with the Commission in the manner specified in §140.15 prior to issuance of the license under part 70 of this chapter. [25 FR 2944, Apr. 7, 1960, as amended at 32 FR 2563, Feb. 7, 1967] (a) Each holder of a license issued pursuant to part 70 of this chapter to possess and use plutonium at a plutonium processing and fuel fabrication plant is required to have and maintain financial protection in the form specified in §140.14 in the amount of $200,000,000. Proof of financial protection shall be filed with the Commission in the manner in §140.15 prior to issuance of the license under part 70 of this chapter. (b) In any case, when a person is authorized pursuant to part 70 of this chapter to possess and use plutonium at two or more plutonium processing and fuel fabrication plants at the same location, the total financial protection required of the licensee for all such plants is the highest amount which would otherwise be required for any one of those plants: Provided, however, That such financial protection covers all such plants at the location. [42 FR 49, Jan. 3, 1977, as amended at 42 FR 20140, Apr. 18, 1977; 44 FR 20632, Apr. 6, 1979; 54 FR 24158, June 6, 1989] Each holder of a license issued under Parts 40 or 70 of this chapter for a uranium enrichment facility that involves the use of source material or special nuclear material is required to have and maintain liability insurance. The liability insurance must be the type and in the amounts the Commission considers appropriate to cover liability claims arising out of any occurrence within the United States that causes, within or outside the United States, bodily injury, sickness, disease, death, loss of or damage to property, or loss of use of property arising out of or resulting from the radioactive, toxic, explosive, or other hazardous properties of chemical compounds containing source material or special nuclear material. Proof of liability insurance must be filed with the Commission as required by §140.15 before issuance of a license for a uranium enrichment facility under parts 40 and 70 of this chapter. [57 FR 18394, Apr. 30, 1992] (a) The amounts of financial protection required under this part may be furnished and maintained in the form of: (1) An effective policy of liability insurance from private sources; or (2) Adequate resources to provide the financial protection required by §§140.11, 140.12; 140.13 or §140.13a; or (3) Such other type of financial protection as the Commission may approve; or (4) Any combination of the foregoing. (b) In any case where the Commission has approved proof of financial protection filed by a licensee the licensee shall not substitute one type of financial protection for another type without first obtaining the written approval of the Commission. [25 FR 2944, Apr. 7, 1960, as amended at 42 FR 49, Jan. 3, 1977] (a)(1) Licensees who maintain financial protection in whole or in part in the form of liability insurance shall provide proof of financial protection that consists of a copy of the liability policy (or policies) together with a certificate by the insurers issuing the policy stating that the copy is a true copy of the currently effective policy issued to the licensee. The licensee may furnish proof of financial protection in the form of the nuclear energy liability insurance policy set forth in §140.91 or in any other form acceptable to the Commission. (2) Such proof may alternatively, consist of a copy of the declarations page of a nuclear energy liability policy in the form set forth in §140.91 and issued to the licensee: Provided, That such policy form has been filed by the insurers with the Commission. The declarations page shall be accompanied by a certificate by the insurers stating that said copy is a true copy of the declarations page of a currently effective policy and identifying the policy (including endorsements) by reference to the policy form which has been filed by them with the Commission. (3) The Commission will accept any other form of nuclear energy liability insurance as proof of financial protection if it determines that the provisions of such insurance provide financial protection under the requirements of the Commission's regulations and the Act. (b) Proof of financial protection in the case of licensees who maintain financial protection in whole or in part in the form specified in §140.14(a)(2) shall consist of a showing that the licensee clearly has adequate resources to provide the financial protection required under this part. For this purpose the applicant or licensee shall file with the Commission: (1) Annual financial statements for the three complete calendar or fiscal years preceding the date of filing, together with an opinion thereon by a certified public accountant. The financial statements shall include balance sheets, operating statements and such supporting schedules as may be needed for interpretation of the balance sheets and operating statements. (2) If the most recent statements required under paragraph (b)(1) of this section have been prepared as of a date more than 90 days prior to the date of filing, similar financial statements, prepared as of a date not more than 90 days prior to the date of filing, should be included. These statements need not be reviewed by a certified public accountant. (c) The Commission may require any licensee to file with the Commission such additional proof of financial protection or other financial information as the Commission determines to be appropriate for the purpose of determining whether the licensee is maintaining financial protection as required under this part. (d) Proof of financial protection shall be subject to the approval of the Commission. (e) The licensee shall promptly notify the Commission of any material change in proof of financial protection or in other financial information filed with the Commission under this part. [25 FR 2944, Apr. 7, 1960, as amended at 33 FR 15999, Oct. 31, 1968; 49 FR 11148, Mar. 26, 1984] The Commission will review proof of financial protection filed by any licensee or applicant for license. If the Commission finds that the licensee or applicant for license is maintaining financial protection in accordance with the requirements of this part, approval of the financial protection will be evidenced by incorporation of appropriate provision in the license. In any case where a licensee undertakes to maintain financial protection in the form of liability insurance for all or part of the financial protection required by this part, (a) The Commission may require proof that the organization or organizations which have issued such policies are legally authorized to issue them and do business in the United States and have clear ability to meet their obligations; and (b) At least 30 days prior to the termination of any such policy, the licensee shall notify the Commission of the renewal of such policy or shall file other proof of financial protection. In any case where a licensee undertakes to maintain financial protection in the form specified in §140.14(a)(2) for all or part of the financial protection required by this part, the Commission may require such licensee to file with the Commission such financial information as the Commission determines to be appropriate for the purpose of determining whether the licensee is maintaining financial protection as required by this part. [42 FR 43385, Aug. 29, 1977] In any case where the Commission finds that the financial protection maintained by a licensee is not adequate to meet the requirements of this part, the Commission may suspend or revoke the license or may issue such order with respect to licensed activities as the Commission determines to be appropriate or necessary in order to carry out the provisions of this part and of section 170 of the Act. (a) The Commission will execute and issue agreements of indemnity pursuant to the regulations in this part or such other regulations as may be issued by the Commission. Such agreements, as to any licensee, shall be effective on: (1)(i) The effective date of the license (issued pursuant to part 50 of this chapter) authorizing the licensee to operate the nuclear reactor involved; or (ii) the effective date of the license (issued pursuant to part 70 of this chapter) authorizing the licensee to possess and store special nuclear material at the site of the nuclear reactor for use as fuel in operation of the nuclear reactor after issuance of an operating license for the reactor, whichever is earlier. No such agreement, however, shall be effective prior to September 26, 1957; or (2) August 1, 1977 or the effective date of the license (issued pursuant to part 70 of this chapter) authorizing the licensee to possess and use plutonium at the site of the plutonium processing and fuel fabrication plant for processing in that plant, whichever date is later. (b) If the licensee fails to pay assessed deferred premiums, the Commission reserves the right to pay those premiums on behalf of the licensee and to recover the amount of such premiums from the licensee. (c) The Commission shall require the immediate submission of financial statements by those licensees who indicate, after an assessment of the retrospective premium by the insurance pools, that they will not pay the assessment. Such financial statements shall include, as a minimum, exhibits indicating internally generated funds from operations and accumulated retained earnings. Subsequent submission of financial statements by such licensees may be requested by the Commission, as required. (d) If premiums are paid by the Commission as provided in paragraph (b) of this section, payment by the Commission shall create a lien in the amount paid in favor of the United States upon all property and rights to property, whether real or personal, belonging to such licensee. The lien shall arise at the time payment is made by the Commission and shall continue until the liability for the amount (or a judgment against the licensee arising out of such liability) is satisfied or becomes unenforceable. The Commission will issue a certificate of release of any such lien if it finds that the liability for the amount has been fully satisfied or has become legally unenforceable. (e) If the Commission determines that the licensee is financially able to reimburse the Commission for a deferred premium payment made in its behalf, and the licensee, after notice of such determination by the Commission fails to make such reimbursement within 120 days, the Commission will take appropriate steps to suspend the license for 30 days. The Commission may take such further action as is necessary if reimbursement is not made within the 30-day suspension period including but not limited to termination of the operating license. (f)(1)(i) The general form of indemnity agreement to be entered into by the Commission with reactor licensees who furnish financial protection in the form of the nuclear energy liability insurance policy set forth in appendix A is contained in §140.92, appendix B. The general form of indemnity agreement to be entered into by the Commission with reactor licensees who furnish financial protection in the form specified in §140.14(a)(2) is set forth in §140.93, appendix C. (ii) The general form of indemnity agreement to be entered into by the Commission with persons licensed to possess and use plutonium in a plutonium processing and fuel fabrication plant and who furnish financial protection in the form of the nuclear energy liability insurance policy set forth in appendix A2 2 The form of the nuclear energy liability insurance policy for these licensees will be the subject of pertinent endorsements after discussion with the insurance pools. (2) The form of indemnity agreement to be entered into by the Commission with any particular licensee under this subpart shall contain such modifications of the applicable form in §§140.92, 140.93, 140.107 and 140.108, appendices A, B, C, G and H, as are provided for in applicable licenses, regulations or orders of the Commission. (3) Each licensee who has executed an indemnity agreement under this subpart shall enter into such agreements amending such indemnity agreement as are required by applicable licenses, regulations, or orders of the Commission. [42 FR 49, Jan. 3, 1977] Each licensee required to have and maintain financial protection for each nuclear reactor as determined in §140.11(a)(4) shall at the issuance of the license and annually, on the anniversary of the date on which the indemnity agreement is effective, provide evidence to the Commission that it maintains one of the following types of guarantee of payment of deferred premium in an amount of $15 million for each reactor he is licensed to operate: (a) Surety bond, (b) Letter of credit, (c) Revolving credit/term loan arrangement, (d) Maintenance of escrow deposits of government securities, (e) Annual certified financial statement showing either that a cash flow (i.e., cash available to a company after all operating expenses, taxes, interest charges, and dividends have been paid) can be generated and would be available for payment of retrospective premiums within three (3) months after submission of the statement, or a cash reserve or a combination of cash flow and cash reserve, or (f) Such other type of guarantee as may be approved by the Commission. [42 FR 50, Jan. 3, 1977, as amended at 71 FR 15012, Mar. 27, 2006] Each licensee required to have and maintain financial protection for each nuclear reactor as determined in §140.11(a)(4) shall execute an indemnity agreement with the Commission that provides for the payment by the Commission of deferred premiums not paid by the licensee and reimbursement of the Commission by the licensee. The general forms of agreement to be entered into by the Committee and licensees are set forth in §140.92, appendix B and §140.93, appendix C. [42 FR 50, Jan. 3, 1977]
Title 10: Energy
PART 140—FINANCIAL PROTECTION REQUIREMENTS AND INDEMNITY AGREEMENTS
Subpart B—Provisions Applicable Only to Applicants and Licensees Other Than Federal Agencies and Nonprofit Educational Institutions
§ 140.10 Scope.
§ 140.11 Amounts of financial protection for certain reactors.
§ 140.12 Amount of financial protection required for other reactors.
§ 140.13 Amount of financial protection required of certain holders of construction permits.
§ 140.13a Amount of financial protection required for plutonium processing and fuel fabrication plants.
§ 140.13b Amount of liability insurance required for uranium enrichment facilities.
§ 140.14 Types of financial protection.
§ 140.15 Proof of financial protection.
§ 140.16 Commission review of proof of financial protection.
§ 140.17 Special provisions applicable to licensees furnishing financial protection in whole or in part in the form of liability insurance.
§ 140.18 Special provisions applicable to licensees furnishing financial protection in whole or in part in the form of adequate resources.
§ 140.19 Failure by licensees to maintain financial protection.
§ 140.20 Indemnity agreements and liens.
§ 140.21 Licensee guarantees of payment of deferred premiums.
§ 140.22 Commission guarantee and reimbursement agreements.
