1. Underground storage tank insurance fund.
a. An Iowa underground storage tank insurance fund is created as a separate fund in the state treasury on July 1, 1998, consisting of all moneys held in the insurance account of the comprehensive petroleum underground storage tank fund.
Notwithstanding section 8.33, moneys remaining in the underground storage tank insurance fund at the end of each fiscal year shall not revert to the general fund but shall remain in the underground storage tank insurance fund. Notwithstanding section 12C.7, interest or earnings on moneys in the underground storage tank insurance fund shall be credited to the underground storage tank insurance fund in addition to any other income specifically allocated to the underground storage tank insurance fund.
b. Amounts in the underground storage tank insurance fund shall not be subject to appropriation for any purpose by the general assembly, but shall be used only for the purposes set forth in this section. The treasurer of state shall act as custodian of the underground storage tank insurance fund and disburse moneys contained in it as directed by the board. The treasurer of state is authorized to invest the moneys deposited in the underground storage tank insurance fund at the discretion of the board. The income from such investments shall be credited to and deposited in the underground storage tank insurance fund. The underground storage tank insurance fund shall be administered by the board which shall make expenditures from the underground storage tank insurance fund consistent with the purposes of the programs provided for in this chapter without further appropriation.
c. No later than July 1, 2004, all moneys in the underground storage tank insurance fund shall be transferred to the insurance board when restructured as an independent nonprofit entity organized to provide an allowable mechanism to demonstrate financial responsibility as required in 40 C.F.R. pts. 280 and 281, owned and operated by insureds, as determined by the comprehensive petroleum underground storage tank fund board.
2. Underground storage tank insurance board.
a. An underground storage tank insurance board is established and shall consist of the following members:
(1) The treasurer of state or the treasurer of state's designee serving for a two-year term. The treasurer of state or the treasurer of state's designee shall serve as a nonvoting member of the insurance board.
(2) The auditor of state or the auditor of state's designee serving for a three-year term. The auditor of state or the auditor of state's designee shall serve as a nonvoting member of the insurance board.
(3) A representative of a governmental subdivision which owns an underground storage tank system which is insured through the insurance account and was insured through the insurance account of the comprehensive petroleum underground storage tank fund beginning on or before October 26, 1990, appointed by the governor and serving a six-year term.
(4) Two owners or operators appointed by the governor who have been petroleum systems insureds through the insurance account and were insured through the insurance account of the comprehensive petroleum underground storage tank fund on or before October 26, 1990. The insurance board members appointed under this subparagraph shall serve a term of six years and shall be eligible to serve subsequent terms pursuant to paragraph "b".
b. After the initial terms served by the insurance board members designated in paragraph "a", subparagraphs (1), (2), (3), and (4), all subsequent insurance board members shall be a part of and elected by the population of private insureds who have been petroleum systems insureds through the underground storage tank insurance fund and were insured through the insurance account of the comprehensive petroleum underground storage tank fund. The subsequent insurance board members elected pursuant to this paragraph shall serve for three-year terms and are eligible to serve an unlimited number of terms.
c. Members of the insurance board are entitled to receive reimbursement of actual expenses incurred in the discharge of their duties within the limits of the moneys appropriated to the insurance board or made available to the underground storage tank insurance fund.
d. Members of the insurance board shall elect a voting chairperson from among the members who are privately insured owners and operators.
3. Recommendations for restructuring. Prior to the restructuring of the insurance board as an independent nonprofit entity, the insurance board shall provide recommendations to the comprehensive petroleum underground storage tank fund board relating to all of the following:
a. Relating to rules, practices, procedures, underwriting criteria, premium determinations, organizational structure, procedures for investigating and settling claims, determining appropriate deductibles, benefits offered, and otherwise implementing and administering the underground storage tank insurance fund.
b. Confirming that the insurance board has established a process to independently provide the following:
(1) Long-term insurability based upon competitive rates for insureds who are in compliance with technical regulatory requirements.
(2) Elimination of any lapse in coverage between state insurance coverage and private insurance coverage.
(3) Ease in transition from state underwriting criteria, application process, claims handling, and premium determinations.
(4) Participation of insureds in establishing underwriting, application, claims, and premium determinations.
(5) Continued approval as an acceptable financial assurance mechanism as required in 40 C.F.R. pts. 280 and 281.
c. Determining a date specific upon which all assets and liabilities of the insurance fund will be transferred to the insurance board as an independent nonprofit entity organized to provide an allowable mechanism to provide financial responsibility as required by 40 C.F.R. pts. 280 and 281, owned and operated by insureds, on or before July 1, 2004.
4. Transfer of insurance board moneys.
a. If the insurance board dissolves or ceases to function as an acceptable financial assurance mechanism as required in 40 C.F.R. pts. 280 and 281, any unencumbered and unobligated moneys transferred to the insurance board pursuant to subsection 1, paragraph "c", shall be transferred to the comprehensive petroleum underground storage tank fund, or if the comprehensive petroleum underground storage tank fund is no longer in existence, the unencumbered and unobligated moneys shall be transferred to the general fund of the state.
b. If a person or persons purchase the ownership rights of the assets of the underground storage tank insurance board, any unencumbered and unobligated moneys transferred to the insurance board pursuant to subsection 1, paragraph "c", shall be transferred to the comprehensive petroleum underground storage tank fund, or if the comprehensive petroleum underground storage tank fund is no longer in existence, the unencumbered and unobligated moneys shall be transferred to the general fund of the state.
5. Insurance fund as a financial assurance mechanism. The insurance fund 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 fund 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.
6. 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.
7. Eligibility of owners and operators for insurance fund coverage. An owner or operator, subject to underwriting requirements and such terms and conditions deemed necessary and convenient by the board, may purchase insurance coverage from the insurance fund 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. Is in compliance with all technical requirements of the department.
8. Insurance account premiums. An owner or operator applying for coverage shall pay an annually adjusted insurance premium for coverage by the insurance fund. Premiums paid shall be credited to and deposited in the insurance fund. 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 fund 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 fund 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 fund to loss. Actuarially sound is not limited in its meaning to fund premium revenue equaling or exceeding fund expenditures for the general tank population.
If coverage is purchased for any part of a year the purchaser shall pay the full annual premium.
The insurance fund may offer, at the buyer's option, a range of deductibles. A ten thousand dollar deductible policy shall be offered.
9. 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 fund until moneys in the fund are exhausted. Upon exhaustion of the moneys in the fund, any remaining claims shall be invalid.
b. The resolution of a cost recovery action filed prior to the effective date of the repeal.
10. Installer's and inspector's insurance coverage.
a. Coverage. The board may offer insurance coverage under the insurance fund 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 fund. 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 fund 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.
g. The board may cease offering insurance coverage under this subsection if the board determines that competitive private market alternatives exist.
11. Coverage alternatives. The board shall provide for insurance coverage to be offered to installers and inspectors for a tank installation certified pursuant to subsection 10, through both of the following methods:
a. Directly through the underground storage tank insurance fund with premiums and deductibles as provided in subsection 10.
b. In cooperation with a private insurance carrier with excess or stop loss coverage provided by the underground storage tank insurance 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.
12. Account expenditures. Moneys in the insurance fund 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 fund, up to the limits of coverage extended. A personal injury is not a compensable third-party liability damage.
13. 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.
14. 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.
15. The board may cease offering insurance coverage under this subsection if the board determines that competitive private market alternatives exist and if the board determines that all of the following conditions are met:
a. Long-term insurability based upon competitive rates for insureds who are in compliance with technical regulatory requirements.
b. Elimination of any lapse in coverage between state insurance coverage and private insurance coverage.
c. Ease in transition from state underwriting criteria, application process, claims handling, and premium determinations.
d. Participation of insureds in establishing underwriting, application, claims, and premium determinations.
e. Continued approval as an acceptable financial assurance mechanism as required in 40 C.F.R. pts. 280 and 281.
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; 98 Acts, ch 1068, §7-11; 99 Acts, ch 114, §32-35
Referred to in § 101.28, 455G.2, 455G.3, 455G.17
Section repealed effective July 1, 2004, subject to the qualifications of subsection 9; 89 Acts, ch 131, § 61
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