Executive Summary

• Author: Directorate-General for Energy (European Commission), ENCO
• Pages: 1-6

Final Report - MOVE/ENER/SRD/2016-498 Lot 2

Study on the insurance, private and financial markets in the field of nuclear third party liability

Page 1

EXECUTIVE SUMMARY

In the 1950s, recognising that the possible cross-border consequences of a nuclear accident required an

international nuclear liability regime, a special third-party liability regime was developed to cover nuclear sites.

Today three Conventions (the Paris/Brussels Conventions, the Vienna Convention and the Convention on

Supplementary Compensation  CSC) share similar principles and provide the foundations for the nuclear liability

arrangements. Nuclear liability is limited in time and amount by these international Conventions and by national

legislation that largely follows the principles established by the Conventions, so that beyond the financial

security limits imposed on nuclear operators, the state can accept responsibility as insurer of last resort, as in

many other aspects of industrial society. The nuclear site operators are liable for any and all nuclear damage

caused by them, regardless of fault. They therefore normally take out insurance for this nu clear third-party

liability (NTPL); in most countries they are required to do so.

The 1992 United Nations Conference on Environment and Development (UNCED) in Rio de Janeiro (the Earth

Summit) witnessed the unveiling of the Rio Declaration1, a short document that laid out guiding principles for

global sustainable development; among the 27 principles are two of particular relevance to the nuclear sector.

P   states shall develop national law regarding liability and compensation for the victims of

     and principle 16 states that    

to promote the internalisation of environmental costs and the use of economic instruments, taking into account

the approach that the pollu         Although the main nuclear liability

Conventions pre-dated this Earth Summit by decades, the major nuclear accident at Fukushima in 2011 and

those prior to the Rio Declaration demonstrated that the nuclear liability regimes in place at the time fell short

when measured against these principles; in both cases the polluters may not have borne the full cost of the

pollution caused and the regimes provided only limited compensation amounts for victims.

A principal reason for the limited compensation following the above noted major nuclear incidents was the lack

of adequate insurance capacity to cover the full scope of the site     

broadening of the coverage demanded by the revised nuclear liability Conventions2 presents traditional insurers

with difficulties, as the new cover requirements apparently push at the boundaries of insurability even more.

This study is focused on nuclear third-party liability and it was commissioned to investigate ways of i) closing the

insurability gaps, where the full financial security amount is not attainable because of a lack of capacity for the

full scope of cover required and ii) developing additional capacity, in order to increase private coverage for NTPL

in case of a severe nuclear accident. The study researches the state of the nuclear liability insurance market

            C  oses new

solutions to encourage the deployment of more nuclear liability capacity (including for the full scope of the

liability). The study has five main objectives:

A. Provide a description of the different providers of nuclear third-party liability (NTPL) insurance which

operate in the EU;

B. Provide an estimate of the NTPL insurance capacity available at the global and EU level and identify

the factors that constrain the availability of this capacity;

C. Identify the currents gaps in the provision of NTPL insurance as well as possible private sector

solutions to cover these gaps;

D. Provide an estimate of NTPL insurance capacity to provide for increased coverage and identify possible

solutions to be set up for that purpose;

E. Assess the main impacts of the different solutions and mechanisms identified and indicate which

solutions would be more effective for covering the gaps of the insurance.

1 See: https://www.un.org/geninfo/bp/enviro.html

2 The 1997 Revised Vienna Convention and the 2004 Revised Paris and Brussels Conventions.