TEPCO N-plant to get foreign insurer
The premium for the new insurance policy is expected to jump more than 10-fold from the current amount. -The Yomiuri Shimbun/ANN
Tokyo Electric Power Co. will likely conclude a new contract with a foreign insurer for the crippled Fukushima No. 1 nuclear power plant, as Japanese firms have refused to renew the current arrangement, according to sources.
The premium for the new insurance policy is expected to jump more than 10-fold from the current amount of between 200 million yen and 300 million yen a year per plant.
Electric power companies are obligated to obtain damage insurance for each nuclear power plant in case of an accident and other irregularities.
The Japan Atomic Energy Insurance Pool, a group of Japanese insurance companies that provide coverage for nuclear power plants, refused to renew the existing policy contract with the Fukushima plant after it expires Jan. 15 next year.
The Law on Compensation for Nuclear Damage prohibits operating nuclear power plants and decommissioning reactors without insurance.
This means that without insurance TEPCO might have been forced to halt decommissioning the reactors, unless the company deposited 120 billion yen, equivalent to the amount of insurance benefits, with the Justice Ministry's Fukushima District Legal Affairs Bureau.
The law obliges all nuclear power plants to sign a compensation contract, which allows the government to pay for damage caused by a nuclear accident due to an earthquake or tsunami.
The law also obliges utilities to sign insurance contracts with private companies to cover ordinary accidents that might happen during normal operations or decommissioning. For the crisis at the Fukushima plant, TEPCO has already received 120 billion yen from the government.
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