Section 1. As used in this chapter, the following words, unless the context otherwise requires, shall have the following meanings:—
“Cede”, to contractually transfer, pursuant to the provisions of this chapter, all or part of the financial responsibility for pollution liability claims from an entity providing insurance or reinsurance to another reinsuring entity.
“Ceding entity” or “entity obtaining reinsurance”, an entity issuing pollution liability insurance policies for which the Pollution Liability Reinsurance Corporation established herein provides reinsurance. Such entity shall be a reciprocal insurance exchange as licensed under sections ninety-four A to ninety-four M, inclusive, of chapter one hundred and seventy-five.
“Commissioner”, the commissioner of insurance.
“Corporation” or “Reinsurance Corporation”, the Pollution Liability Reinsurance Corporation established herein.
“Pollution liability”, liability for any claim made against an insured which arises out of, relates to, or is based upon the dispersal, discharge, escape, or release of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids, gases, wastes including materials to be recycled, reconditioned or reclaimed, or any other material, irritant, contaminant or pollutant in or into the atmosphere or on, onto, upon, in or into surface or subsurface: (i) soil or land, (ii) water, waterway or watercourse, (iii) objects, (iv) tangible or intangible matter.
“Pollution liability insurance policies acceptable for reinsurance under this chapter”, those policies of pollution liability insurance providing coverage for bodily injury and property damage to third parties caused by either unintended and unanticipated releases or by releases whose consequences were unintended and unanticipated, but shall not include first party clean-up costs, or the clean-up of any waste facility whether owned or operated by the insured or by a third party, even if ordered by a governmental agency, except as part of property damage liability to a third party; provided, however, that policies accepted for reinsurance by the Corporation shall contain a prevention of loss provision substantially equivalent to the following:
In the event the insured becomes aware of incidents or conditions which may result in a claim covered by this policy, it shall undertake such operations as are necessary to alleviate such incidents or conditions and shall notify the insurer within forty-eight hours of commencing such operations. If the insured fails to undertake such operations, this policy shall not afford coverage for such claim. The insurer shall have no liability for or duty to reimburse the insured for the costs of such operations undertaken to prevent a claim covered by this policy.
In the discretion of the Corporation, pollution liability insurance policies acceptable for reinsurance under this chapter may include policies providing completed operations liability coverage for pollution clean-up contractors licensed by the department of environmental protection; provided that such policies shall be issued only on a job-by-job site-specific basis subject to strict underwriting standards and inspections of completed work.
Pollution liability insurance policies acceptable for reinsurance under this chapter shall be limited to policies covering only claims against the insured arising within the commonwealth resulting from disposal, discharge, release or escape of materials from an insured site of an approved waste facility in the commonwealth. Claims for injuries or damage to persons or property outside the commonwealth resulting from release or escape of materials within the commonwealth will be deemed claims arising within the commonwealth. Claims for injuries or damage arising out of wastes originating within the commonwealth but shipped by, or on behalf of, an insured within the commonwealth to an approved waste facility outside the commonwealth will be deemed claims arising within the commonwealth; but in any claim seeking to recover against such an insured and others under joint and several liability, the reinsurance shall extend only to that portion of the claim bearing the same proportion to the entire claim against the insured and others claimed against that the amount of insured’s waste in the site, originating in the commonwealth and causing the injury or damage complained of, bears to the total amount of waste causing the injury or damage complained of. Said policies shall exclude coverage related to radioactive waste facilities. Said policies shall also contain a nuclear exclusion similar to that approved by the commissioner of insurance for use by the insurance services office in commercial general liability insurance policies.
The Pollution Liability Reinsurance Corporation established herein shall, consistent with its plan of operation and any applicable regulations of the commissioner of insurance, determine the acceptability of pollution liability policies, including the coverage definitions and terms of such policies, for purposes of providing reinsurance pursuant to this chapter.
“Reinsure” or “provide reinsurance” or “assume reinsurance”, to contractually accept all or part of the financial responsibility for pollution liability claims, in exchange for the allocable premium charges, subject to the provisions of this chapter.
“Reinsurance fund”, the fund established pursuant to section two.
“Waste facility”, any facility operated by any person or organization for the storage, treatment, processing or disposal of waste materials. The Corporation shall require that pollution liability policies acceptable for reinsurance under this chapter shall exclude all coverage for claims arising out of or in connection with a waste facility unless such waste facility is on an approved list established by the Corporation.