Nuclear Risk Insurers (NRI), the lead reinsuring pool to the Ukraine Nuclear Insurance Pool (UNIP), renewed the nuclear third-party liability policy for Energoatom, the Ukrainian nuclear power operator, on 29 July 2022.
The cover renewed is for three of the Energoatom nuclear power plant (NPP) sites at Rivne, Khmelnytska and Yuzhnoukrainsk, which are all within the direct control and oversight of nuclear safety operators.
Since 24 February 2022, when Russia invaded Ukraine, UNIP has continued to provide nuclear liability cover to Energoatom with the support of NRI and the nuclear insurance pools. This includes an extension of the original policy that incepted on 29 April 2021 for a period of three months.
Key to providing this cover and the renewal has been UNIP and NRI’s close collaboration with Energoatom and the continuous monitoring of the sites, to assure our members that the “controlling mind” remains with Energoatom and that there has been no “material change in risk”.
Additionally, UNIP, at NRI’s request, negotiated a more clearly defined war exclusion in the policy. The Vienna Convention 1963 (VC63), which determines the strict liability on Energoatom in Ukraine, allows for a war exclusion but that is the only exception, with all other triggers for an offsite release of ionising radiation being covered by the strict liability and channelling of liability and compensation to victims to Energoatom.
The criteria above were used to conclude that the Chernobyl and Zaporizhzhia NPPs were no longer capable of being insured and, as a result, they have now become subject to a Ukrainian government indemnity in the absence of an insurance or alternative finance solution for their liability.
NRI’s engineers worked closely with UNIP’s engineer to develop the criteria that sit behind the two main concerns noted above, and these criteria continue to be in force under the renewed insurance cover.
UNIP and NRI have in turn been supported by the international nuclear insurance pooling community which has provided the supporting reinsurance capacity to the UNIP programme, in addition to NRI.
As part of the renewal, UNIP has been in constant dialogue with Energoatom and the Ukrainian government. With a shortfall of nuclear insurance pools capacity, UNIP has successfully negotiated a government indemnity that sits alongside the nuclear insurance pools, which in turn helps provide the full SDR150m (circa USD200m) required by the national law and the VC63.
Mark Popplewell, Managing Director of NRI, said: “It is humbling to have seen how our colleagues in Ukraine have continued to work so professionally under such extreme circumstances, and to have also been supported by our Lloyd’s of London and insurance market members, who have backed our decisions to stay on risk and have shown continued faith in our engineering and underwriting expertise.
We are also grateful for the support we have received from the reinsurance pools who have collaborated with NRI on the technical challenges encountered. It is a true demonstration of the solidarity the international nuclear insurance pooling system has with UNIP and with Ukraine during their time of need.”
Dimitry Rasshyvalov, Managing Director of the UNIP, said: “The contract with Energоatom has been successfully renewed through cooperation with the international nuclear insurance pooling system. We appreciate the support of our colleagues from NRI, the leader of UNIP’s reinsurance programme.”