Nuclear protocols
GAD has supported the government to help ratify the 2004 Protocols which increase the scope of operator liabilities in the area of nuclear energy.
Actuaries have supported the government to help enable the . This project, from the Government Actuary鈥檚 Department (GAD) related to third-party liabilities in the field of nuclear energy.
GAD worked with the Department for Business, Energy & Industrial Strategy (BEIS) on the 2004 Protocols, that came into force in January 2022. These build on the 鈥樷€� and the 鈥樷€�.
The challenge
The 2004 Protocols increase the scope of operator liability in terms of the:
- financial limits of compensation
- heads of damage
- geography
- period during which personal injury claims can be made
For power plants and similar nuclear sites, operators鈥� liability levels have increased. These have risen from 拢140 million to 鈧�700 million, increasing by 鈧�100 million per year to a maximum of 鈧�1.2 billion.
The commercial market has been able to cover most of the extension of cover. However, there is currently insufficient commercial capacity to cover all the increased personal injury liabilities for the 10-to-30-year period. GAD supported BEIS in developing temporary measures to address this gap in the market.
Analysis and data
GAD advised BEIS on how its modelling could be adapted to allow for a risk-sharing arrangement between industry and government. GAD undertook the analysis and BEIS gathered data to feed into GAD鈥檚 modelling.
As part of this project, the Contingent Liability Central Capability used loss estimates provided by GAD to advise BEIS and HM Treasury. This included advice on practical ways of dealing with the contingent liabilities, including fair allocation of risk and reward between private sector insurers and the government.
Looking forward
GAD is supporting an ongoing review of the current approach with a view of creating a long-term market solution that does not require government intervention.