TOKYO (majirox news) — The Tokyo Electric Power Company (TEPCO) was recently informed by the Japan Atomic Energy Insurance Pool, which is comprised of Japan’s leading 23 insurance companies, that they would not be renewing TEPCO’s liability insurance. It will be due for renewal this coming January.
“Without liability insurance, it’s feared that the entire work of decommissioning the Fukushima reactors will come to a halt,” the Asahi newspaper reported.
Under Japanese law, any company running a nuclear reactor and handling radioactive fuel must have liability insurance fixed at the equivalent of 1.2 billion dollars. Even this amount is simply a drop in the bucket compared to the liabilities that TEPCO has so far run up.
TEPCO initially floated the idea of putting 1.2 billion dollars in escrow with the Japanese government, but considering that they are going to require that cash to purchase fuel this winter, the limitation of this choice were recognized. Instead, the company began to feel out foreign insurers.
Apparently it finally found an insurer willing to offer the company a policy. The insurer remains unnamed. Only the cost of the premiums has been hinted at: supposedly they will be 10 times higher than the premiums previously offered by the Japan Atomic Energy Insurance Pool.
“TEPCO used to be paying around $3 million a year,” says a foreign insurance broker knowledgeable about the situation. “Rumor now puts their premiums in the $30 million a year range. And guess who is going to pay for that? The consumer.”
Maybe even $30 million isn’t quite enough. Whoever the foreign insurer is, they’re betting that the next big earthquake will follow the pattern of the previous earthquakes and tsunamis in the Tohoku region, coming only several hundred years from now.
However, such an event could just as easily arrive again tomorrow.