(a) An owner or operator may satisfy the requirements of financial
assurance by obtaining insurance which conforms to the requirements of this
section, in addition to the requirements specified in Subchapters A and B
of this chapter (relating to General Financial Assurance Requirements and
Financial Assurance Requirements for Closure, Post Closure, and Corrective
Action), and submitting an originally signed certificate to the executive
director.
(b) At a minimum, the insurer must be licensed to transact
the business of insurance, or eligible to provide insurance as an excess or
surplus lines insurer, in one or more states.
(c) The wording of the certificate of insurance must be identical
to the wording specified in §37.341 of this title (relating to Certificate
of Insurance).
(d) The insurance policy must be issued for a face amount at
least equal to the current cost estimate for closure, post closure, or corrective
action, except when a combination of mechanisms are used in accordance with §37.41
of this title (relating to Use of Multiple Financial Assurance Mechanisms)
or §37.52 of this title (relating to Use of a Universal Financial Assurance
Mechanism for Multiple Facilities and Program Areas). Actual payments by the
insurer shall not change the face amount, although the insurer's future liability
shall be lowered by the amount of the payments.
(e) The insurance policy must guarantee that funds shall be
available to provide for closure, post closure, or corrective action of the
facility. The policy shall also guarantee that once closure, post closure,
or corrective action begins, the issuer shall be responsible for paying out
funds, up to an amount equal to the face amount of the policy, upon the direction
of the executive director, to such party or parties as the executive director
specifies.
(f) An owner or operator or any other person authorized to
perform closure, post closure, or corrective action may request reimbursement
for closure, post closure, or corrective action expenditures by submitting
itemized bills to the executive director. The request shall include an explanation
of the expenses and all applicable itemized bills. The owner or operator may
request reimbursement for partial closure only if the remaining value of the
policy is sufficient to cover the maximum costs of closing the facility over
its remaining operating life. Within 60 days after receiving bills for closure,
post closure, or corrective action activities, the executive director shall
determine whether the closure, post closure, or corrective action expenditures
are in accordance with the approved closure, post closure, or corrective action
activities or are otherwise justified, and if so, shall instruct the insurer
to make reimbursement in such amounts as the executive director specifies
in writing. If the executive director has reason to believe that the maximum
cost of closure, post closure, or corrective action over the remaining life
of the facility will be greater than the face amount of the policy, the executive
director may withhold reimbursement of such amounts as deemed prudent until
the executive director determines, in accordance with Subchapters A and B
of this chapter, that the owner or operator is no longer required to maintain
financial assurance requirements for closure, post closure, or corrective
action of the facility. If the executive director does not instruct the insurer
to make such reimbursements, the executive director shall provide the owner
or operator with a detailed written statement of reasons.
(g) The owner or operator must maintain the policy in full
force and effect until the executive director consents to termination of the
policy. Failure to pay the premium, without substitution of alternate financial
assurance as specified in this subchapter, shall constitute a violation of
these regulations, warranting such remedy as the executive director deems
necessary. Such violation shall be deemed to begin upon receipt by the executive
director of a notice of future cancellation, termination, or failure to renew
due to nonpayment of the premium, rather than upon the date of expiration
of the policy.
(h) The policy must provide that the insurer may not cancel,
terminate, or fail to renew the policy except for failure to pay the premium.
The automatic renewal of the policy shall, at a minimum, provide the insured
with the option of renewal at the face amount of the expiring policy. If there
is a failure to pay the premium, the insurer may elect to cancel, terminate,
or fail to renew the policy by sending notice by certified mail to the owner
or operator and the executive director. Cancellation, termination, or failure
to renew may not occur, however, during 120 days beginning with the date of
receipt of the notice by both the executive director and the owner or operator,
as evidenced by the return receipts.
(i) Cancellation, termination, or failure to renew may not
occur and the policy shall remain in full force and effect in the event that
on or before the date of expiration:
(1) the executive director deems the facility abandoned; or
(2) the permit expires, is terminated, is revoked, or
a new or renewal permit is denied; or
(3) closure is ordered by the executive director of the
commission or by a United States district court or other court of competent
jurisdiction; or
(4) the owner or operator is named as debtor in a voluntary
or involuntary proceeding under Title 11 (Bankruptcy), United States Code;
or
(5) the premium due is paid.
(j) Each policy must contain a provision allowing assignment
of the policy to a successor owner or operator. Such assignment may be conditional
upon consent of the insurer, provided such consent is not unreasonably refused.
(k) For insurance policies providing coverage for post closure,
commencing on the date that liability to make payments pursuant to the policy
accrues, the insurer will thereafter annually increase the face amount of
the policy. Such increase must be equivalent to the face amount of the policy,
less any payments made, multiplied by an amount equivalent to 85% of the most
recent investment rate or of the equivalent coupon issue yield announced by
the United States Treasury for 26-week Treasury securities.
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