1. Insurance account as a financial assurance mechanism. The insurance account shall offer financial assurance for a qualified owner or operator under the terms and conditions provided for under this section. Coverage may be provided to the owner or the operator, or to each separately. The board is not required to resolve whether the owner or operator, or both are responsible for a release under the terms of any agreement between the owner and operator.
The source of funds for the insurance account shall be from the following:
a. Moneys allocated to the board or moneys allocated to the account by the board according to the fund budget approved by the board.
b. Moneys collected as an insurance premium including service fees, if any, and investment income attributed to the account by the board.
2. Limits of coverage available. An owner or operator required to maintain proof of financial responsibility may purchase coverage up to the federally required levels for that owner or operator subject to the terms and conditions under this section and those adopted by the board.
3. Eligibility of owners and operators for insurance account coverage. An owner or operator, subject to under- writing requirements and such terms and conditions deemed necessary and convenient by the board, may purchase insurance coverage from the insurance account to provide proof of financial responsibility provided that a tank to be insured satisfies one of the following conditions:
a. Satisfies performance standards for new underground storage tank systems as specified by the federal environmental protection agency in 40 C.F.R. § 280.20, as amended through January 1, 1989.
b. Has satisfied on or before the date of the application standards for upgraded underground storage tank systems as specified by the federal environmental protection agency in 40 C.F.R. § 280.21, as amended through January 1, 1989.
c. The applicant certifies in writing to the board that the tank to be insured will be brought into compliance with either paragraph "a" or "b", on or before December 22, 1998, provided that prior to the provision of insurance account coverage, the tank site tests release free. An owner or operator who fails to comply as certified to the board on or before December 22, 1998, shall not insure that tank through the insurance account unless and until the tank satisfies the requirements of paragraph "a" or "b". An owner or operator who fails to comply with either paragraph "a" or "b" by October 26, 1993, or who fails to enter into a contract on or before October 26, 1993, which, upon completion, will bring the owner or operator into compliance with either paragraph "a" or "b" by December 22, 1998, may be eligible for financial assurance under this section but shall be subject to an additional surcharge of eight hundred dollars per tank in addition to payment of a premium that is equal to two times the cost of the premium required under subsection 4, paragraph "g", per insured time period.
d. The applicant either:
(1) Is maintaining financial responsibility pursuant to current or previously applicable federal or state financial responsibility requirements on petroleum underground storage tanks within the state.
(2) Complies with the applicable following date for financial responsibility:
(a) On or before April 26, 1990, for a petroleum marketing firm owning at least thirteen, but no more than ninety-nine petroleum underground storage tanks.
(b) On or before October 26, 1990, for an owner or operator not described in subparagraph subdivision (a), and not currently or previously required to maintain financial responsibility by federal or state law on tanks within the state.
4. Actuarially sound premiums based on risk factor adjustments after five years. The annual premium for insurance coverage shall be:
a. For the year July 1, 1989, through June 30, 1990, one hundred dollars per tank.
b. For the year July 1, 1990, through June 30, 1991, one hundred fifty dollars per tank.
c. For the year July 1, 1991, through June 30, 1992, two hundred dollars per tank.
d. For the year July 1, 1992, through June 30, 1993, two hundred fifty dollars per tank.
e. For the year July 1, 1993, through June 30, 1994, in accordance with the following:
(1) For a tank satisfying subsection 3, paragraph "a" or "b", three hundred dollars per tank.
(2) For a tank qualifying under subsection 3, paragraph "c", six hundred dollars per tank.
f. For the period from July 1, 1994, through December 31, 1994, in accordance with the following:
(1) For a tank satisfying subsection 3, paragraph "a" or "b", three hundred fifty dollars per tank.
(2) For a tank qualifying under subsection 3, paragraph "c", seven hundred dollars per tank.
g. For subsequent time periods, an owner or operator applying for coverage shall pay an annually adjusted insurance premium for coverage by the insurance account. The board may only approve fund coverage through the payment of a premium established on an actuarially sound basis. Risk factors shall be taken into account in establishing premiums. It is the intent of the general assembly that an actuarially sound premium reflect the risk to the insurance account presented by the insured. Risk factor adjustments should reflect the range of risk presented by the variety of tank systems, monitoring systems, and risk management practices in the general insurable tank population. Premium adjustments for risk factors should at minimum take into account lifetime costs of a tank and monitoring system and insurance account premiums for that tank system so as to provide a positive economic incentive to the owner or operator to install the more environmentally safe option so as to reduce the exposure of the insurance account to loss. Actuarially sound is not limited in its meaning to fund premium revenue equaling or exceeding fund expenditures for the general tank population.
Tanks receiving financial assurance pursuant to subsection 3, paragraph "c", shall not be included in the general tank population for purposes of determining actuarially sound premiums under this paragraph.
If coverage is purchased for any part of a year the purchaser shall pay the full annual premium.
h. The insurance account may offer, at the buyer's option, a range of deductibles. A ten thousand dollar deductible policy shall be offered.
5. Future repeal. The future repeal of this section shall not terminate the following obligations or authorities necessary to administer the obligations until these obligations are satisfied:
a. The payment of claims filed prior to the effective date of any future repeal, against the insurance account until moneys in the account are exhausted. Upon exhaustion of the moneys in the account, any remaining claims shall be invalid.
b. The resolution of a cost recovery action filed prior to the effective date of the repeal.
6. Installer's and inspector's insurance coverage.
a. Coverage. The board shall offer insurance coverage under the fund's insurance account to installers and inspectors of certified underground storage tank installations within the state for an environmental hazard arising in connection with a certified installation as provided in this subsection. Coverage shall be limited to environmental hazard coverage for both corrective action and third-party liability for a certified tank installation within the state in connection with a release from that tank.
b. Annual premiums. The annual premium shall be:
(1) For the year July 1, 1991, through June 30, 1992, two hundred dollars per insured tank.
(2) For the year July 1, 1992, through June 30, 1993, two hundred fifty dollars per insured tank.
(3) For the year July 1, 1993, through June 30, 1994, three hundred dollars per insured tank.
(4) For the period from July 1, 1994, through December 31, 1994, three hundred fifty dollars per insured tank.
(5) For subsequent time periods, installers and inspectors shall pay an annually adjusted insurance premium to maintain coverage on each tank previously installed or newly insured by the insurance account. The board may only approve fund coverage through the payment of a premium established on an actuarially sound basis. The premium paid shall be fully earned and is not subject to refund or cancellation. If coverage is purchased for any part of a year the purchaser shall pay the full annual premium.
(6) The board may offer coverage at rates based on sales if the qualifying installer or inspector cannot be rated on a per tank basis, or if the work the installer or inspector performs involves more than tank installation. The rates to develop premiums shall be based on the premium charged per tank under subparagraphs (1), (2), (3), and (4).
c. Limits of coverage available. Installers and inspectors may purchase coverage up to one million dollars per occurrence and two million dollars aggregate, subject to the terms and conditions under this section and those adopted by the board.
d. Deductible. The insurance account may offer, at the buyer's option, a range of deductibles. A ten thousand dollar deductible policy shall be offered.
e. Excess coverage. Installers and inspectors may purchase excess coverage of up to five million dollars upon such terms and conditions as determined by the board.
f. Certification of tank installations. The board shall adopt certification rules requiring certification of a new tank installation as a precondition to offering insurance to an owner or operator or an installer or inspector. The board shall set in the rule the effective date for the certification requirement. Certification rules shall at minimum require that an installation be personally inspected by an independent licensed engineer, local fire marshal, state fire marshal's designee, or other person who is unaffiliated with the tank owner, operator, installer or inspector, who is qualified and authorized by the board to perform the required inspection and that the tank and installation of the tank comply with applicable technical standards and manufacturer's instructions and warranty conditions. An inspector may be an owner or operator of a tank, or an employee of an owner, operator, or installer.
7. Coverage alternatives. The board shall provide for insurance coverage to be offered to installers and inspectors for a tank installation certified pursuant to subsection 6, through both of the following methods:
a. Directly through the fund with premiums and deductibles as provided in subsection 6.
b. In cooperation with a private insurance carrier with excess or stop loss coverage provided by the fund to reduce the cost of insurance to such installers or inspectors, and including such other terms and conditions as the board deems necessary and convenient to provide adequate coverage for a certified tank installation at a reasonable premium. An installer or inspector obtaining insurance coverage pursuant to this paragraph, may purchase excess coverage of up to five million dollars, subject to the terms and conditions as determined by the board.
The insurance coverage offered pursuant to this subsection shall, at a minimum, cover environmental hazards for both corrective action and third-party liability.
8. Account expenditures. Moneys in the insurance account may be expended to take corrective action for and to compensate a third party for damages, including but not limited to payment of a judgment for bodily injury or property damage caused by a release from a tank, where coverage has been provided to the owner or operator from the insurance account, up to the limits of coverage extended. A personal injury is not a compensable third-party liability damage.
9. Conditions to receive premium discount. A person engaged in the wholesale or retail sale of petroleum shall receive a discount of eight percent on that person's annual insurance premium for all tanks located at a site which meets all of the following conditions:
a. The person maintains a tank for the purpose of storing waste oil.
b. The person accepts waste oil from the general public.
c. The person posts a notice at the site in a form and manner approved by the administrator advertising that the person will accept waste oil from the general public.
10. Property transfer insurance.
a. Additional cleanup requirements. An owner, operator, landowner, or financial institution may purchase insurance coverage under the insurance account to cover environmental damage caused by a tank in the event that governmental action requires additional cleanup beyond that which was required at the time a no further action certificate or a monitoring certificate was issued under section 455B.474, subsection 1, paragraph "h".
b. Eligibility for coverage. An owner, operator, landowner, or financial institution, subject to underwriting requirements and such terms and conditions deemed necessary and convenient by the board, may purchase insurance coverage from the insurance account to provide proof of financial responsibility if the following conditions are satisfied:
(1) A no further action certificate or a monitoring certificate has been issued for the site under section 455B.474, subsection 1, paragraph "h". Property transfer coverage shall be effective on a monitored site only for the time period for which monitoring is allowed as specified in the monitoring certificate. A site which has not been issued a no further action certificate or a monitoring certificate shall not be eligible for property transfer coverage.
(2) The tank location is not covered by other environmental hazard liability insurance coverage, or is eligible for remedial benefits as provided under section 455G.9.
(3) The environmental damage is not caused by a new release.
(4) The additional cleanup is mandated by governmental action requiring cleanup beyond that which was required at the time a no further action certificate or a monitoring certificate under section 455B.474, subsection 1, paragraph "h", was issued for a site.
c. Premiums. The annual premium for insurance coverage shall be two hundred fifty dollars per party, per location, with an overall limit of liability per site of five hundred thousand dollars. The premiums are fully earned. Each party purchasing coverage at that site will have the total limit of liability prorated over the total limit among the policies issued, so as to avoid stacking beyond the total coverage limit of five hundred thousand dollars. If coverage is purchased for any part of a year, the purchaser shall pay the full annual premium.
After December 31, 1994, an owner, operator, landowner, or financial institution applying for coverage shall pay an annually adjusted insurance premium for coverage by the insurance account. The board may only approve fund coverage through the payment of a premium established on an actuarially sound basis.
d. Coverage exclusions. Property transfer insurance coverage offered under this subsection does not include coverage of the following:
(1) Third-party liability.
(2) Cleanup beyond the actual costs associated with the site.
(3) Loss of use of the property and other economic damages.
(4) Costs associated with additional remediation required by a voluntary change in usage of the site.
e. Annual monitoring. Annual monitoring is required for any site for which coverage is purchased. Failure to comply with monitoring as prescribed by the board will invalidate insurance coverage under this subsection. For a site which has been issued a monitoring certificate, the annual monitoring requirements imposed under this paragraph shall be satisfied by the annual monitoring requirements imposed under the corrective action rules for a site which is allowed to monitor in place.
f. Transfer of coverage. Coverage may be transferred upon payment of a transfer fee.
g. Rules. The board shall adopt rules pursuant to chapter 17A as necessary to implement this subsection.
11. Limitations on third-party liability. To the extent that coverage under this section includes third-party liability, third-party liability specifically excludes any claim, cause of action, or suit, for personal injury including, but not limited to, loss of use or of private enjoyment, mental anguish, false imprisonment, wrongful entry or eviction, humiliation, discrimination, or malicious prosecution.
89 Acts, ch 131, § 52; 90 Acts, ch 1235, § 33--;39; 91 Acts, ch 252, § 26--;30; 92 Acts, ch 1217, § 8; 93 Acts, ch 155, §6--;9; 95 Acts, ch 215, §19--;25
Referred to in § 101.28, 455G.3, 455G.8, 455G.17
Section repealed effective July 1, 2004, subject to the qualifications of subsection 5; 89 Acts, ch 131, § 61
Iowa General Assembly
Search: Iowa Code 1997
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