The Secondary Financial Protection (SFP) Policy is used by the operators of nuclear power plants to meet financial protection requirements under the Price-Anderson Act. The policy provides “following form” coverage for losses that exceed the maximum primary limit available under the Facility Form Policy.
Under the Price-Anderson Act, if the damages from a nuclear incident may exceed the financial protection amounts required under the Act, the Act requires each reactor to pay an additional 5% of its retrospective premium. This effectively results in the maximum retrospective premium of $127.318 million per reactor. This, multiplied by the number of operating plants, amounts to a total of $13.2 billion available for a nuclear incident.
The limit under this policy is equal to the amount of retrospective premium actually collected from participating insureds. In addition to administering this program, ANI has a contingent liability if retrospective premiums are not paid when due. However, under the terms of a bonding agreement, ANI will be reimbursed with interest for any monies we advance.
If the ANI primary liability limit of $375 million and the SFP liability limit of $13.2 billion is exceeded, Congress is required under the Price-Anderson Act to “take whatever action is determined to be necessary… to provide full and prompt compensation” for claims resulting in damages that exceed the aggregate public liability.