Insurance Needs

Information about Insurance Needs

Published on April 16, 2008

Author: Danielle

Source: authorstream.com

Content

Slide1:  Brian M. Murdock, ARM AIG Environmental Regional Manager, National Accounts Atlanta, GA 770-671-2171 or [email protected] General Overview:  General Overview Who is AIG Environmental? Policies for Contaminated Property How are governments using Environmental Insurance What local governments can do with Environmental Insurance to promote redevelopment AIG Environmental:  AIG Environmental AIG Environmental has been providing environmental insurance, claims management, and environmental loss control services for 25 years AIG Environmental is the largest environmental insurer and the leader in product innovation AIG Environmental - Regional offices are staffed by professionals with backgrounds in environmental law, engineering and other technical disciplines Environmental Insurance Policies for Cleanup:  Environmental Insurance Policies for Cleanup Pollution Legal Liability Cleanup Cost Cap Environmental Protection Program Pollution Legal Liability (PLL) Select®:  Pollution Legal Liability (PLL) Select® PLL Select provides environmental coverage for: On and off-site pollution conditions for both unknown pre-existing and new contamination Coverage for known and unknown pollution conditions not expected or required to be remediated Third party bodily injury, property damage First party Business Interruption & Diminution in value due to pollution conditions Defense Coverage and Transported cargo Non-owned disposal site liability Clean-Up Cost Cap:  Remedial Plan work area Known Contamination Clean-Up Cost Cap P r o p e r t y L i n e Clean-Up Cost Cap:  Clean-Up Cost Cap Actual Contamination Remedial Plan work area Clean-Up Cost Cap:  Clean-Up Cost Cap Actual Contamination P r o p e r t y L i n e Clean-Up Cost Cap:  Optional New Found Contamination Coverage: discovered pursuant to the actual RAP:New contaminants Clean-Up Cost Cap Does not cover new found contamination that is discovered due to activities outside of the action plan. Clean-Up Cost Cap:  Remedial Plan New Found Contamination Clean-Up Cost Cap Clean-Up Cost Cap:  Remedial Plan New Found Contamination X Clean-Up Cost Cap Clean-Up Cost Cap:  Actual contamination greater than estimated. Clean-up costs, above the SIR, within the RAP on and off-site. Off-site clean-up costs for pollutants considered within the RAP that are emanating from the covered site. Governmental / Regulatory changes to the RAP that are required during the policy term. Covers Remediation Cost Overruns for: Clean-Up Cost Cap Clean-Up Cost Cap:  Clean-Up Cost Cap C O I N S Cost Overrun Coverage Self-Insured Retention (SIR) Limit of Liability AIGE’s Expected Costs Clean-Up Cost Cap:  Clean-Up Cost Cap Underwriting (CCC) Contractor provides AIGE their costs for the known contamination - AOC/RAP’s Detailed AIGE (Internal) engineering review of the contractors proposed scope of works and costs AIGE Risk Profiles these costs establishing a risk model that evaluates Optimistic costs Most Likely costs Pessimistic costs Clean-Up Cost Cap:  Clean-Up Cost Cap Underwriting (CCC) Underwriting teams are set up for each contractor Each underwriting team has a dedicated: Underwriter Engineer Home office consists of a Product Line Manager and a QA/QC Engineer Combining CCC and PLL:  Known Clean-Up Cost Cap Site Boundaries Unknown Unknown Known But Not Actionable Pollution Legal Liability Select Combining CCC and PLL PLL/CCC Combined:  PLL/CCC Combined PLL/CCC Combined Form First Party Clean-Up and Liability Coverage - Clean-Up Costs / Bodily Injury / Property damage / off site disposal / transportation PLL portion addresses re-opener issues - post clean up Full “wrap around” coverage for known clean up issues. PLL coverage for the remaining parts of the site - the extent of this coverage is dependant on both the proposed end-use and the level of site specific data PLL/CCC Combined:  PLL/CCC Combined PLL/CCC Combined Form Policy Term for a PLL/CCC - 10 years maximum Limits available up to $35m - Excess limits subject to Reinsurance Guaranteed Fixed-Price Contracts:  Guaranteed Fixed-Price Contracts What is a Fixed-Price Contract? Many Forms: Contract between a contractor and site owner guaranteeing a fixed cost for a specific scope of work Known AOC Site Boundary Contractor: “We will remove the known AOC and any other discovered contamination to achieve a predetermined standard - for no more than X$$$.” Environmental Protection Programs:  Individually Tailored Insurance Programs Provides Long Term Solutions May be used to support a complete release from liability. Insurance terms of up to 15 years may be available, with Guarantied Investment Contracts or annuities used to pay for the actual cleanup costs beyond 15 years. Environmental Protection Programs Environmental Protection Programs:  Expected Costs Cost Overrun Coverage Environmental Protection Programs Environmental Protection Programs:  Example Environmental Protection Programs EPP Examples :  Iron Mountain Mine December 13, 2000 EPP Examples Site History:  Site History Located in Redding California More than 100 years of mining operations for Iron, Gold, Silver, Copper, Zinc and Pyrite Mined underground with miles of tunnels, and at the surface in the form of open pit and sidehill mining. Declared an NPL Superfund Site in 1983 Operated by Stauffer Chemical Company which was absorbed by Rhone-Poulenc which merged with Hoechst to form Aventis. Site History:  Site History One PRP (Potential Responsible Party) - SMC: Operator Mining exposed the mountains mineral deposits to oxygen, water and certain bacteria, and altered the mountain’s hydrology. The combination of these events acidic mine drainage to flow from the mine and into nearby waterways. Environmental Problems:  Environmental Problems Largest source of the acidic mine drainage (AMD) in the world. Largest source of toxic metals in the country. Site dumped the equivalent of 150 tanker cars full of toxic metals into the Sacramento River each day during winter storms. pH is less than 1. Discharge is so toxic that “when workers left a shovel in the green liquid flowing from one of its portals, the next day half the shovel had been eaten away completely”. Environmental Remediation:  Environmental Remediation Objective: Collect and treat AMD that will be produced at the site. Long term operation and maintenance (O&M) of the water treatment plant, estimated to be required for the next 1,000 to 3,000 years. Low Tech remediation - treating the AMD with Lime. Transaction Hurdles:  Transaction Hurdles SMC was looking for a complete release of any current or future liabilities as part of the settlement The EPA needed to know that they would have insurance protection for O&M for the next 30 years, and that they would have the required funds to pay for the operation and maintenance beyond 30 years. IT, the contractor that was awarded the 30 year contract, needed to show that they had the financial capability to perform the required cleanup for the next 30 years. Parties that Needed to Approve the Transaction:  Parties that Needed to Approve the Transaction United States Federal Government United States Environmental Protection Agency United States Department of Justice (NRD) State of California California Department of Toxic Substances Control California Regional Water Quality Control Board State Water Resources Control Board Department of Fish and Game State Lands Commission Governor Insurance Program:  Insurance Program Combined 30 year insurance program (CCC & PLS) with GIC payment due at the end of the 30 year term. One policy that provided 30 years of insurance protection, along with a guaranteed payment of $514 million at the end of 30 years which will be used to pay the for the expected O&M in perpetuity. Based upon our engineering review, the estimated cleanup cost for the first 30 years was $203 million. The policy provides coverage for up to $303 million. Types of Sites (Applications):  Types of Sites (Applications) NPL/Brownfield RCRA CA Mining (Reclamation & C/PC) Landfills (C&D) (Reclamation & C/PC) Nuclear Decommissioning (approved by NRC) Sites that are difficult to use insurance: Radioactively contaminated sites UXO site (concussive risk) Concepts to Explore:  Concepts to Explore Use of CCC on NPL Fund Lead sites where state purchases CCC in lieu of 10% cost share Pooling of sites (local/county level) Encouraging Divestment of Contaminated Property by Owners (“Mothballing”) Mass BRAC:  Mass BRAC Massachusetts Brownfield Redevelopment Access to Capital Created by legislation in 1999 with a $15 million fund Run by MASS Business - a state agency Pre-Negotiated Policies and Rates AIG Environmental is selected carrier Mass BRAC (Con’t.):  Mass BRAC (Con’t.) Offers PLL, and CCC State provides a 50% Subsidy on all premiums issued through program (Now lowered to 25% or $25,000 due to overall state budget issues) Tremendously Successful: 1999 - 4 Sites 2000 - 36 Sites 2001 - 40 Sites 2002 - 83 Sites 2003 - 44 Sites 2004 - 34 Sites Mass BRAC (Con’t.):  Mass BRAC (Con’t.) Cost to State in 4 years $4,720,000 Cleanup Leveraged by programs: $142,000,000 Funds Leveraged - Over $1.9 Billion ($1.1B in loans & $ 800M in investments) Jobs Created in Commonwealth: 24,600 Wisconsin – How it works:  Wisconsin – How it works State has non-degradation groundwater policy State’s PLL coverage begins when developer purchases property with remaining Contamination after the source is removed Monitor for One-year If Contamination does not worsen after one year, Developer pays a fee to state (Ranges from $7,000 to $18,000) and is released from liability for GW Cleanup State uses fee to “attach” that site to its policy If Cleanup needed of GW, State files a claim against its PLL for cleanup – this way State’s budget is protected California FAIR:  California FAIR Cal EPA implement in 2004 AIG Environmental conditionally selected as Carrier Law allows the State to pay 50% of EI premium for SC, CCC, PLL Up to 80% SIR of CCC Slide38:  Brian M. Murdock, ARM AIG Environmental Regional Manager, National Accounts Atlanta, GA 770-671-2171 or [email protected] Slide39:  The scenarios summarized above are offered only as examples. Coverage depends on the actual facts of each case and the terms, conditions and exclusions of each individual policy. Anyone interested in the above product(s) should request a copy of the policy itself for a description of the scope and limitations of coverage. Policy terms may vary based on individual state requirements and may not be available in all states. Insurance underwritten by member companies of American International Group, Inc. The description herein is summary only. It does not include all term, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverage and exclusions. Coverage may not be available in all states. Issuance of coverage is subject to underwriting review and approval. Non-insurance products may be provided through independent third parties.

Related presentations


Other presentations created by Danielle

American Culture
07. 11. 2007
0 views

American Culture

Seminar Dec 05 06 EvansS
07. 05. 2008
0 views

Seminar Dec 05 06 EvansS

9071
02. 05. 2008
0 views

9071

cas loutraki
02. 05. 2008
0 views

cas loutraki

26904 1
30. 04. 2008
0 views

26904 1

01TaxationNaturalRes ources
28. 04. 2008
0 views

01TaxationNaturalRes ources

UC1006
22. 04. 2008
0 views

UC1006

corpsponsorprogram
18. 04. 2008
0 views

corpsponsorprogram

Diameter Credit Check Mironov
17. 04. 2008
0 views

Diameter Credit Check Mironov

EventPlanning
05. 10. 2007
0 views

EventPlanning

MURI NOAAPAP
05. 10. 2007
0 views

MURI NOAAPAP

Chapter3 Overexploitation
10. 10. 2007
0 views

Chapter3 Overexploitation

NSFWkshp10 KoganGPS
12. 10. 2007
0 views

NSFWkshp10 KoganGPS

2006 PC chap1 5
12. 10. 2007
0 views

2006 PC chap1 5

CultureoftheCIS
15. 10. 2007
0 views

CultureoftheCIS

ICCOA IOMDP PP
15. 10. 2007
0 views

ICCOA IOMDP PP

2006BiochemA chap3
15. 10. 2007
0 views

2006BiochemA chap3

CS 595 Presentation
17. 10. 2007
0 views

CS 595 Presentation

landnav
19. 10. 2007
0 views

landnav

GlobalInsightSupplyC hain
22. 10. 2007
0 views

GlobalInsightSupplyC hain

ProfRaulBraes
22. 10. 2007
0 views

ProfRaulBraes

masjid
24. 10. 2007
0 views

masjid

walk21
17. 10. 2007
0 views

walk21

2006 Footwear Conf
25. 10. 2007
0 views

2006 Footwear Conf

protws2 4572
29. 10. 2007
0 views

protws2 4572

0611
30. 10. 2007
0 views

0611

ContactCanberra1
04. 10. 2007
0 views

ContactCanberra1

robert engle
08. 10. 2007
0 views

robert engle

PO Workbenches Data Clean up
22. 10. 2007
0 views

PO Workbenches Data Clean up

Noel Final
12. 10. 2007
0 views

Noel Final

Traina
15. 10. 2007
0 views

Traina

The End of the Cold War
23. 12. 2007
0 views

The End of the Cold War

billah
23. 10. 2007
0 views

billah

CHAPTER 18 1
05. 01. 2008
0 views

CHAPTER 18 1

Constructed Wetlands
07. 01. 2008
0 views

Constructed Wetlands

US invlovemnet in ww2
13. 11. 2007
0 views

US invlovemnet in ww2

usits2001 talk 1
29. 10. 2007
0 views

usits2001 talk 1

Supercomputing
02. 10. 2007
0 views

Supercomputing

Cine y filosofia
24. 10. 2007
0 views

Cine y filosofia

open economy
04. 10. 2007
0 views

open economy

IHEP in EGEE ver4
27. 09. 2007
0 views

IHEP in EGEE ver4

PACS
15. 10. 2007
0 views

PACS

Project Gini
14. 02. 2008
0 views

Project Gini

1Unit 8
24. 02. 2008
0 views

1Unit 8

Slides Louis
24. 02. 2008
0 views

Slides Louis

Management Structure Syria
07. 01. 2008
0 views

Management Structure Syria

DHS COPLINK Data Mining 2003
07. 03. 2008
0 views

DHS COPLINK Data Mining 2003

0815 Branch 0730
12. 03. 2008
0 views

0815 Branch 0730

trudel and nelson
01. 10. 2007
0 views

trudel and nelson

national holocaust memorial day
18. 03. 2008
0 views

national holocaust memorial day

Chapter 14 Powerpoint
26. 11. 2007
0 views

Chapter 14 Powerpoint

viniciuscatao inclusao
02. 11. 2007
0 views

viniciuscatao inclusao

nile climatology
21. 10. 2007
0 views

nile climatology

Roman Spring 2006
31. 12. 2007
0 views

Roman Spring 2006

OPSPanama 1
22. 10. 2007
0 views

OPSPanama 1

FunNight
23. 11. 2007
0 views

FunNight

COrlandi ANCI
24. 10. 2007
0 views

COrlandi ANCI

VisitingUCSF
30. 10. 2007
0 views

VisitingUCSF

Portfolio INFANZIA
02. 11. 2007
0 views

Portfolio INFANZIA

Rejmanek Honza Poster 20061110
03. 10. 2007
0 views

Rejmanek Honza Poster 20061110

Session 2 Mr Hotta ENUM 07
09. 10. 2007
0 views

Session 2 Mr Hotta ENUM 07

embrapa1
23. 10. 2007
0 views

embrapa1

6 ApocaplyticLiterature
01. 10. 2007
0 views

6 ApocaplyticLiterature

dissolving
04. 01. 2008
0 views

dissolving

UUpresEng0706
15. 10. 2007
0 views

UUpresEng0706

ICOPS agarwal 2007 v6
04. 12. 2007
0 views

ICOPS agarwal 2007 v6

Druckman flu presentation
26. 03. 2008
0 views

Druckman flu presentation