In 1957, the US Congress enacted the Price-Anderson Act as an amendment to the Atomic Energy Act of 1954. Its purpose was to encourage the commercial development of nuclear energy and to establish a framework for handling potential liability claims.
The Act requires the operators of nuclear power plants to provide financial protection against public liability caused by a nuclear incident. The amount of financial protection required by the Act is equal to the maximum liability insurance available from private insurance sources.
At the same time, Congress encouraged the insurance industry to develop a means by which power plant operators could meet their financial protection responsibilities. This would, in turn, assist in the commercial development of the nuclear industry.
Insurers rose to the occasion and stock insurance companies created what became American Nuclear Insurers (ANI), to respond to the needs of a then-fledgling nuclear industry.
The pooling concept provided a mechanism to amass the large amounts of insurance capacity needed to insure the nuclear risk and to spread the risk of a relatively small number of exposure units over a large number of insurance companies.
Today, much of the financial protection is provided by the US property and casualty insurance companies who are members of ANI. They represent some of the largest insurers and reinsurers in the country. The total amount of funds pledged by these companies in support of our insurance is called “capacity.” Capacity is also provided by numerous foreign reinsurers around the world, many of whom are themselves pools that underwrite nuclear risks in their own countries. In addition, a significant amount of reinsurance is provided to ANI by Nuclear Electric Insurance Limited (NEIL), which is a U.S. utility mutual.