Current through September 18, 2024
Authority: IC 13-14-8; IC 13-22-2-4
Affected: IC 13-22-2;
40 CFR
265.147
Sec. 24.
(a) After
July 1, 1982, an owner or operator of a hazardous waste treatment, storage, or
disposal facility, or a group of such facilities, shall demonstrate financial
responsibility for bodily injury and property damage to third parties caused by
sudden accidental occurrences arising from operation of the facility or group
of facilities. The owner or operator shall have and maintain liability coverage
for sudden accidental occurrences in the amount of at least one million dollars
($1,000,000) per occurrence with an annual aggregate of at least two million
dollars ($2,000,000), exclusive of legal defense costs. This liability coverage
may be demonstrated in one (1) of the following six (6) ways:
(1) An owner or operator may demonstrate the
required liability coverage by having liability insurance as follows:
(A) Each insurance policy must be amended by
attachment of the hazardous waste facility liability endorsement or evidenced
by a certificate of liability insurance. The wording of the endorsement must be
identical to the wording specified in section 35 of this rule. The wording of
the certificate of insurance must be identical to the wording specified in
section 36 of this rule. The owner or operator shall submit a signed duplicate
original of the endorsement or the certificate of insurance to the
commissioner. If requested by the commissioner, the owner or operator shall
provide a signed duplicate original of the insurance policy.
(B) Each insurance policy must be issued by
an insurer that, at a minimum, is licensed to transact the business of
insurance, or eligible to provide insurance as an excess or surplus lines
insurer, in one (1) or more states.
(2) An owner or operator may meet the
requirements of this section by passing a financial test for liability coverage
as specified in subsection (f) or by using the guarantee for liability coverage
as specified in subsection (g).
(3)
An owner or operator may meet the requirements of this section by obtaining a
letter-of-credit for liability coverage as specified in subsection
(h).
(4) An owner or operator may
meet the requirements of this section by obtaining a surety bond for liability
coverage as specified in subsection (i).
(5) An owner or operator may meet the
requirements of this section by establishing a trust fund for liability
coverage as specified in subsection (j).
(6) An owner or operator may demonstrate the
required liability coverage through the use of a combination of insurance,
financial test, guarantee, letter-of-credit, surety bond, or trust fund except
that the owner or operator may not combine a financial test covering part of
the liability coverage requirement with a guarantee unless the financial
statement of the owner or operator is not consolidated with the financial
statement of the guarantor. The amounts of coverage demonstrated must total at
least the minimum amounts required by this subsection. If the owner or operator
demonstrates the required coverage through the use of a combination of
financial assurances under this subsection, the owner or operator shall specify
at least one (1) such assurance as primary coverage and shall specify other
assurance as excess coverage.
An owner or operator shall notify the commissioner in writing
within thirty (30) days whenever a claim results in a reduction in the amount
of financial assurance for liability coverage provided by a financial
instrument authorized in this subsection, a certification of valid claim for
bodily injury or property damage caused by a sudden or nonsudden accidental
occurrence arising from the operation of a hazardous waste treatment, storage,
or disposal facility is entered between the owner or operator and third party
claimant for liability coverage under this subsection, or a final court order
establishing a judgment for bodily injury or property damage caused by a sudden
or nonsudden accidental occurrence arising from the operation of a hazardous
waste treatment, storage, or disposal facility is issued against the owner or
operator or an instrument that is providing financial assurance for liability
coverage under this subsection.
(b) An owner or operator of a surface
impoundment, landfill, or land treatment facility that is used to manage
hazardous waste or a group of such facilities shall demonstrate financial
responsibility for bodily injury and property damage to third parties caused by
nonsudden accidental occurrences arising from operation of the facility or
group of facilities. The owner or operator shall have and maintain liability
coverage for nonsudden accidental occurrences in the amount of at least three
million dollars ($3,000,000) per occurrence with an annual aggregate of at
least six million dollars ($6,000,000), exclusive of legal defense costs. An
owner or operator who meets the requirements of this subsection may combine the
required per occurrence coverage levels for sudden and nonsudden accidental
occurrences into a single per occurrence level and combine the required annual
aggregate coverage levels for sudden and nonsudden accidental occurrences into
a single annual aggregate level. Owners or operators who combine coverage
levels for sudden and nonsudden accidental occurrences shall maintain liability
coverage in the amount of at least four million dollars ($4,000,000) per
occurrence and eight million dollars ($8,000,000) annual aggregate. This
liability coverage may be demonstrated in one (1) of the following six (6)
ways:
(1) An owner or operator may demonstrate
the required liability coverage by having liability insurance as follows:
(A) Each insurance policy must be amended by
attachment of the hazardous waste facility liability endorsement or evidenced
by a certificate of liability insurance. The wording of the endorsement must be
identical to the wording specified in section 35 of this rule. The wording of
the certificate of insurance must be identical to the wording specified in
section 36 of this rule. The owner or operator shall submit a signed duplicate
original of the endorsement or the certificate of insurance to the
commissioner. If requested by the commissioner, the owner or operator shall
provide a signed duplicate original of the insurance policy.
(B) Each insurance policy must be issued by
an insurer that, at a minimum, is licensed to transact the business of
insurance, or eligible to provide insurance as an excess or surplus lines
insurer, in one (1) or more states.
(2) An owner or operator may meet the
requirements of this section by passing a financial test for liability coverage
as specified in subsection (f) or by using the guarantee for liability coverage
as specified in subsection (g).
(3)
An owner or operator may meet the requirements of this section by obtaining a
letter-of-credit for liability coverage as specified in subsection
(h).
(4) An owner or operator may
meet the requirements of this section by obtaining a surety bond for liability
coverage as specified in subsection (i).
(5) An owner or operator may meet the
requirements of this section by establishing a trust fund for liability
coverage as specified in subsection (j).
(6) An owner or operator may demonstrate the
required liability coverage through the use of a combination of insurance,
financial test, guarantee, letter-of-credit, surety bond, or trust fund except
that the owner or operator may not combine a financial test covering part of
the liability coverage requirement with a guarantee unless the financial
statement of the owner or operator is not consolidated with the financial
statement of the guarantor. The amounts of coverage demonstrated must total at
least the minimum amounts required by this subsection. If the owner or operator
demonstrates the required coverage through the use of a combination of
financial assurances under this subsection, the owner or operator shall specify
at least one (1) such assurance as primary coverage and shall specify other
assurance as excess coverage.
An owner or operator shall notify the commissioner in writing
within thirty (30) days whenever a claim results in a reduction in the amount
of financial assurance for liability coverage provided by a financial
instrument authorized in this subsection, a certification of valid claim for
bodily injury or property damages caused by a sudden or nonsudden accidental
occurrence arising from the operation of a hazardous waste treatment, storage,
or disposal facility is entered between the owner or operator and third party
claimant for liability coverage under this subsection, or a final court order
establishing a judgment for bodily injury or property damage caused by a sudden
or nonsudden accidental occurrence arising from the operation of a hazardous
waste treatment, storage, or disposal facility is issued against the owner or
operator or an instrument that is providing financial assurance for liability
coverage under this subsection.
(c) If an owner or operator demonstrates to
the satisfaction of the commissioner that the levels of financial
responsibility required by subsection (a) or (b) are not consistent with the
degree and duration of risk associated with treatment, storage, or disposal at
the facility or group of facilities, the owner or operator may obtain an
exemption from the commissioner. The request for an exemption must be submitted
in writing to the commissioner. If granted, the exemption will take the form of
an adjusted level of required liability coverage, with such level to be based
on the commissioner's assessment of the degree and duration of risk associated
with the ownership or operation of the facility or group of facilities. The
commissioner may require an owner or operator who requests an exemption to
provide such technical and engineering information as is deemed necessary by
the commissioner to determine a level of financial responsibility other than
that required by subsection (a) or (b). The commissioner shall process an
exemption request as if it was a permit modification request under
329
IAC 3.1-13-7 and subject to the procedures of
329
IAC 3.1-13-7. Notwithstanding any other provision, the
commissioner may hold a public hearing whenever the commissioner finds, on the
basis of requests for a public hearing, a significant degree of public interest
in a decision to grant an exemption.
(d) If the commissioner determines that the
levels of financial responsibility required by subsection (a) or (b) are not
consistent with the degree and duration of risk associated with treatment,
storage, or disposal at the facility or group of facilities, the commissioner
may adjust the level of financial responsibility required under subsection (a)
or (b) as may be necessary to protect human health and the environment. This
adjusted level will be based on the degree and duration of risk associated with
the ownership or operation of the facility or group of facilities. In addition,
if the commissioner determines that there is a significant risk to human health
and the environment from nonsudden accidental occurrences resulting from the
operation of a facility that is not a surface impoundment, landfill, or land
treatment facility, the commissioner may require that an owner or operator of
the facility comply with subsection (b). An owner or operator shall furnish to
the commissioner, within ninety (90) days, any information that the
commissioner requests to determine whether cause exists for such adjustments of
level or type of coverage. The commissioner shall process an adjustment of the
level of required coverage as if it was a permit modification request under 329
IAC 3.1-13 subject to the procedures of 329 IAC 3.1-13. Notwithstanding any
other provision, the commissioner may hold a public hearing whenever the
commissioner finds, on the basis of requests for a public hearing, a
significant degree of public interest in a decision to adjust the level or type
of required coverage.
(e) Within
sixty (60) days after receiving certifications from the owner or operator and
an independent registered professional engineer that final closure has been
completed in accordance with the approved closure plan, the commissioner shall
notify the owner or operator in writing that the owner or operator is no longer
required by this section to maintain liability coverage for that facility,
unless the commissioner has reason to believe that closure has not been in
accordance with the approved closure plan.
(f) The requirements for the financial test
for liability coverage are as follows:
(1) An
owner or operator may satisfy the requirements of this section by demonstrating
that the owner or operator passes the financial test. To pass this test, the
owner or operator shall meet the criteria of either clause (A) or (B) as
follows:
(A) The owner or operator shall have
the following:
(i) Net working capital and
tangible net worth each at least six (6) times the amount of liability coverage
to be demonstrated by this test.
(ii) Tangible net worth of at least ten
million dollars ($10,000,000).
(iii) Assets located in the United States
amounting to at least:
(AA) ninety percent
(90%) of the total assets; or
(BB)
six (6) times the amount of liability coverage to be demonstrated by this test.
(B) The
owner or operator shall have the following:
(i) A current rating for the most recent bond
issuance of:
(AA) AAA, AA, A, or BBB as issued
by Standard and Poor's; or
(BB)
Aaa, Aa, A, or Baa as issued by Moody's.
(ii) Tangible net worth of at least ten
million dollars ($10,000,000).
(iii) Tangible net worth of at least six (6)
times the amount of liability coverage to be demonstrated by this
test.
(iv) Assets located in the
United States amounting to at least:
(AA)
ninety percent (90%) of his the total assets; or
(BB) six (6) times the amount of liability
coverage to be demonstrated by this test.
(2) As used in this
subsection, "amount of liability coverage" refers to the annual aggregate
amounts for which coverage is required under subsections (a) through
(b).
(3) To demonstrate that the
owner or operator meets this test, the owner or operator shall submit the
following to the commissioner:
(A) A letter
signed by the owner's or operator's chief financial officer and worded as
specified in section 32 of this rule. If an owner or operator is using the
financial test to demonstrate both assurance for closure or post-closure care,
as specified by sections 9 and 19 of this rule, and liability coverage, the
owner or operator shall submit the letter specified in section 32 of this rule
to cover both forms of financial responsibility. A separate letter as specified
in section 31 of this rule is not required.
(B) A copy of the independent certified
public accountant's report on examination of the owner's or operator's
financial statements for the latest completed fiscal year.
(C) A special report from the owner's or
operator's independent certified public accountant to the owner or operator
stating the following:
(i) The independent
certified public accountant has compared the data that the letter from the
chief financial officer specified as having been derived from the independently
audited, year-end financial statements for the latest fiscal year with the
amounts in such financial statements.
(ii) In connection with that procedure, no
matters came to the attention of the independent certified public accountant
that caused the independent certified public accountant to believe that the
specified data should be adjusted.
(4) After the initial submission of items
specified in subdivision (3), the owner or operator shall send updated
information to the commissioner within ninety (90) days after the close of each
succeeding fiscal year. This information must consist of all three (3) items
specified in subdivision (3).
(5)
If the owner or operator no longer meets the requirements of subdivision (1),
the owner or operator shall obtain insurance, a letter-of-credit, a surety
bond, a trust fund, or a guarantee for the entire amount of required liability
coverage as specified in this section. Evidence of liability coverage must be
submitted to the commissioner within ninety (90) days after the end of the
fiscal year for which the year-end financial data reflects that the owner or
operator no longer meets the test requirements.
(6) The commissioner may disallow use of this
test on the basis of qualifications in the opinion expressed by the independent
certified public accountant in the report on examination of the owner's or
operator's financial statements. An adverse opinion or a disclaimer of opinion
is cause for disallowance. The commissioner shall evaluate other qualifications
on an individual basis. The owner or operator shall provide evidence of
insurance for the entire amount of required liability coverage as specified in
this section within thirty (30) days after notification of
disallowance.
(g) The
requirements for guarantee for liability coverage are as follows:
(1) Subject to subdivision (2), an owner or
operator may meet the requirements of this section by obtaining a written
guarantee, hereinafter referred to as a guarantee. The guarantor shall be the
direct or higher tier parent corporation of the owner or operator or a firm
whose parent corporation is also the parent corporation of the owner or
operator. The guarantor shall meet the requirements for owners or operators in
subsection (f)(1) through (f)(6). The wording of the guarantee must be
identical to the wording specified in section 34 of this rule. A certified copy
of the guarantee must accompany the items sent to the commissioner as specified
in subsection (f)(3). One (1) of these items must include the letter from the
guarantor's chief financial officer. If the guarantor's parent corporation is
also the parent corporation of the owner or operator, the letter must describe
the value received in consideration of the guarantee. The terms of the
guarantee must provide the following:
(A) If
the owner or operator fails to satisfy a judgment based on a determination of
liability for bodily injury or property damage to third parties caused by
sudden or nonsudden accidental occurrences, or both as the case may be, arising
from the operation of facilities covered by this guarantee, or fails to pay an
amount agreed to in settlement of claims arising from or alleged to arise from
such injury or damage, the guarantor shall satisfy the judgment or pay the
amount agreed to in settlement of claims up to the limits of
coverage.
(B) The guarantee must
remain in force unless the guarantor sends notice of cancellation by certified
mail to the owner or operator and to the commissioner. This guarantee may not
be terminated unless and until the commissioner approves in writing alternate
liability coverage complying with
329 IAC
3.1-15-8 or this section.
(2) In the case of the corporations
incorporated in the United States, a guarantee may be used to satisfy the
requirements of this section only if:
(A) the
attorney general or insurance commissioner of the state in which the guarantor
is incorporated; and
(B) the
attorney general or insurance commissioner of Indiana;
have submitted a written statement to the commissioner that a
guarantee executed as described in this section and section 34 of this rule is
a legally valid and enforceable obligation in that state.
(3) In the case of the
corporations incorporated outside the United States, a guarantee may be used to
satisfy the requirements of this section only if:
(A) the non-U.S. corporation has identified a
registered agent for service of process in Indiana and in the state in which it
has its principal place of business; and
(B) the attorneys general or insurance
commissioners of Indiana and the state in which the guarantor corporation has
its principal place of business have submitted a written statement to the
commissioner that a guarantee executed as described in this section and section
34 of this rule is a legally valid and enforceable obligation in that
state.
(h)
The requirements for letter-of-credit for liability coverage are as follows:
(1) An owner or operator may satisfy the
requirements of this section by obtaining an irrevocable standby
letter-of-credit that conforms to the requirements of this section and by
submitting a copy of the letter-of-credit to the commissioner.
(2) The financial institution issuing the
letter-of-credit must be an entity that has the authority to issue
letters-of-credit and whose letter-of-credit operations are regulated and
examined by a federal or state agency.
(3) The wording of the letter-of-credit must
be identical to the wording specified in section 37 of this rule.
(4) An owner or operator who uses a
letter-of-credit to satisfy the requirements of this section may also establish
a standby trust fund. Under the terms of such a letter-of-credit, all amounts
paid pursuant to a draft by the trustee of the standby trust must be deposited
by the issuing institution into the standby trust in accordance with
instructions from the trustee. The trustee of the standby trust fund must be an
entity that has the authority to act as a trustee and whose trust operations
are regulated and examined by a federal or state agency.
(5) The wording of the standby trust fund
must be identical to the wording specified in section 40 of this
rule.
(i) The
requirements for surety bond for liability coverage are as follows:
(1) An owner or operator may satisfy the
requirements of this section by obtaining a surety bond that conforms to the
requirements of this section and by submitting a copy of the bond to the
commissioner.
(2) The surety
company issuing the bond must be among those listed as acceptable sureties on
federal bonds in the current Circular 570 of the U.S. Department of the
Treasury.
(3) The wording of the
surety bond must be identical to the wording specified in section 38 of this
rule.
(4) A surety bond may be used
to satisfy the requirements of this section only if:
(A) the attorney general or insurance
commissioner of the state in which the surety is incorporated; and
(B) the attorney general or insurance
commissioner of Indiana;
have submitted a written statement to the commissioner that a
surety bond executed as described in this subsection and section 38 of this
rule is a legally valid and enforceable obligation in that state.
(j) The
requirements for trust fund for liability coverage are as follows:
(1) An owner or operator may satisfy the
requirements of this section by establishing a trust fund that conforms to the
requirements of this section and by submitting an originally signed duplicate
of the trust agreement to the commissioner.
(2) The trustee shall be an entity that has
the authority to act as a trustee and whose trust operations are regulated and
examined by a federal or state agency.
(3) The trust fund for liability coverage
must be funded for the full amount of the liability coverage to be provided by
the trust fund before it may be relied upon to satisfy the requirements of this
section. If at any time after the trust fund is created the amount of funds in
the trust fund is reduced below the full amount of the liability coverage to be
provided, the owner or operator, by the anniversary date of the establishment
of the fund or within one hundred twenty (120) days of the reduction, whichever
is sooner, shall either add sufficient funds to the trust fund to cause its
value to equal the full amount of the liability coverage to be provided or
obtain other financial assurance as specified in this section to cover the
difference. As used in this subsection, "the full amount of the liability
coverage to be provided" means the amount of coverage for sudden, nonsudden, or
sudden and nonsudden occurrences required to be provided by the owner or
operator by this subsection, less the amount of financial assurance for
liability coverage that is being provided by other financial assurance
mechanisms being used to demonstrate financial assurance by the owner or
operator.
(4) The wording of the
trust fund must be identical to the wording specified in section 39 of this
rule.
