Up & Atom


In a final rule published in the Federal Register on October 19, 2023, the NRC amended its regulations at 10 CFR 140.11 to increase the amount of third-party liability coverage required under the Price-Anderson Act, Section 170 of the Atomic Energy Act (42 USC 2210) (Price-Anderson) for large reactor licensees (i.e., reactors with a rated capacity of ≥100 MWe) from $450 million to $500 million per incident.

This comes just over a month after the NRC’s once-every-five-year adjustment for inflation to the maximum total and annual deferred premium amounts for the “secondary layer” of offsite liability coverage. Licensees will need to ensure that their liability insurance coverage is updated before January 1, 2024, when the rule goes into effect.

Price-Anderson and the NRC’s implementing regulations require large commercial power reactors to maintain two layers of financial protection. The primary layer comes from third-party liability insurance coverage, while the secondary layer is provided through a privately administered deferred premium assessment pool that all operating reactor licensees must contribute to in the unlikely event that damages for offsite liability exceed the amount provided by the primary layer.

Section 170b(1) of Price-Anderson specifically requires that the primary layer of coverage be equal to the “maximum amount available at reasonable cost and on reasonable terms from private sources.” The NRC’s regulations at 10 CFR 140.11(a)(4) currently define the maximum liability insurance available from private sources as $450 million per incident.

US large reactor licensees typically meet their primary layer obligation by purchasing liability insurance from American Nuclear Insurers (ANI). In July, ANI notified the NRC that it would be increasing the maximum amount of insurance available under its nuclear liability policy from the current $450 million to $500 million per incident, effective January 1, 2024.

Because Price-Anderson requires that reactor operators maintain the maximum amount of coverage available from private sources, the NRC also updated 10 CFR 140.11(a)(4) to specifically match this increased policy coverage maximum. The agency issued the adjustment as a final rule without prior public notice or opportunity for public comment under the “good cause” exception provided in the Administrative Procedure Act (5 USC 553(b)(B)).

Effective January 1, 2024, the total coverage available under the primary and secondary layers of insurance required by the Price-Anderson will be approximately $16.6 billion per incident.

Morgan Lewis routinely advises nuclear industry participants on issues involving Price-Anderson and nuclear insurance in general and will continue to track developments on these topics.