20.9.10.17

INSURANCE. An owner or operator may demonstrate financial assurance for closure, post-closure care, and phase I and phase II assessments by obtaining insurance which conforms to the requirements of 20.9.10 NMAC. In the case of closure, post-closure care, and phase I and phase II assessments, the insurance shall be effective prior to the initial receipt of waste. In the case of corrective action, the insurance shall be effective no later than 120 days after the corrective action remedy has been approved by the secretary.

1. A. The insurer shall be authorized to transact the business of insurance in the state of New Mexico and:

   (1) have assets of one hundred million dollars ($100,000,000) or more; or

   (2) be an admitted carrier, a licensed carrier or a registered carrier of surplus lines of insurance or reinsurance in one or more states and have either a surplus of not less than twenty-five million dollars ($25,000,000) above undiscounted actuarial reserves (including incurred but not reported (IBNR) claims), or have an A.M. best rating of not less than a B+ or the equivalent rating of other recognized rating companies.

2. B. The certificate of insurance shall be worded as in a form supplied by the department.
3. C. The insurance policy shall guarantee that funds will be available for closure post-closure care, phase I and phase II assessments, and corrective action, as applicable. The policy shall also guarantee that the insurer will, as necessary, provide funds up to the face amount of the policy to persons authorized by the secretary to conduct activities covered by the policy. The face amount of the policy shall be at least equal to the most recent cost estimate for each of the covered activities.
4. D. Each policy shall contain a provision allowing assignment of the policy to a successor owner or operator. Such assignment may be conditional upon consent of the insurer, provided that such consent is not unreasonably refused.

5. E. The insurance policy shall provide that the insurer may not cancel, terminate or fail to renew the policy except for failure to pay the premium. The automatic renewal of the policy shall provide the insured with the option of renewal at the face amount of the expiring policy. If there is a failure to pay the premium, the insurer may cancel the policy by sending notice of cancellation by certified mail to the owner or operator, and to the secretary, 120 days in advance of cancellation. If the insurer notifies the owner or operator that it plans to cancel the policy, the owner or operator shall obtain alternate financial assurance at least 60 days prior to cancellation of the policy. Cancellation, termination, or failure to renew may not occur and the policy will remain in full force and effect in the event that on or before the date of expiration:

   (1) the secretary deems the facility abandoned;

   (2) the permit is terminated or revoked or a new permit is denied;

   (3) closure is ordered by the secretary or a court of competent jurisdiction;

   (4) the owner or operator is named a debtor in a voluntary or involuntary bankruptcy proceeding;

   (5) the premium due is paid.

6. F. For insurance policies providing coverage for post-closure care, commencing on the date that liability to make payments pursuant to the policy accrues, the insurer shall thereafter annually increase the face amount of the policy. Such increase shall be equivalent to the face amount of the policy, less any payments made, multiplied by an amount equivalent to 85 percent of the most recent investment rate or of the equivalent coupon-issue yield announced by the U.S. treasury for 26-week treasury securities.
7. G. The owner or operator may cancel the insurance policy only if alternate financial assurance is substituted or if the secretary notifies the owner or operator that financial assurance is no longer required.
8. H. The owner or operator shall file a copy of the certificate of insurance and insurance policy with the department. The owner or operator shall report any changes in either surplus or rating to the secretary. In addition, a copy of the latest annual rating (if applicable) and a copy of the latest audited financial statements shall be forwarded by the insurer to the owner or operator and the secretary.

[20.9.10.17 NMAC - Rp, 20 NMAC 9.1.IX.906, 8/2/2007]