R 299.9708 Closure or postclosure insurance.

Rule 708. (1) An owner or operator may satisfy the requirements of R 299.9703 by obtaining closure or postclosure insurance, or both, which conforms to the requirements of this rule and by submitting both of the following to the director: (a) A certificate of insurance that uses wording approved by the director. (b) A certified true and complete copy of the insurance policy. (2) An owner or operator of a new facility shall submit the certificate of insurance and insurance policy to the director not less than 60 days before the date on which hazardous waste is first received for treatment, storage, or disposal. The insurance must be effective before this initial receipt of hazardous waste. (3) The insurer shall satisfy all the following requirements: (a) The insurer shall be licensed to transact the business of insurance, or eligible to provide insurance as an excess or surplus lines insurer, in this state. (b) The insurer shall have a minimum of $7,000,000.00 of unimpaired surplus funds. (c) The insurer shall assume financial responsibility for the accepted risk, pursuant to the terms of the policy, using its own pool of resources that is independent, separate, and unrelated to that of the owner or operator. (4) The closure or postclosure insurance policy must be issued for a face amount not less than the current closure or postclosure cost estimate, except as provided in R 299.9703(2). Actual payments by the insurer must not change the face amount, although the insurer's future liability will be lowered by the amount of the payments. (5) The closure insurance policy must guarantee that funds will be available to close the facility when final closure occurs. The postclosure insurance policy must guarantee that funds will be available to provide postclosure care of the facility when the postclosure period begins. The policy must also guarantee that, once final closure begins, the insurer will be responsible for paying out funds, up to an amount equal to the face amount of the policy, on the direction of the director, to the person or persons as the director specified. (6) After beginning partial or final closure, an owner or operator or another person authorized to perform closure or postclosure care may request reimbursements for closure or postclosure expenditures by submitting itemized bills to the director. The owner or operator may request reimbursements for partial closure only if the remaining value of the policy is sufficient to cover the maximum costs of closing the facility over its remaining operating life. Within 60 days after receiving bills for closure or postclosure activities, the director shall determine if the expenditures are in accordance with the closure or postclosure plan or otherwise justified, and, if so, the director shall instruct the insurer to make reimbursement in the amounts the director specified in writing. If the director has reason to believe that the maximum cost of closure over the remaining life of the facility will be significantly more than the face amount of the policy, the director may withhold reimbursement of the amounts as the director determines prudent until the director determines, in accordance with R 299.9703(5), that the owner or operator is no longer required to maintain financial assurance for closure of the facility. If the director does not instruct the insurer to make the reimbursements, then the director shall provide the owner or operator with a detailed written statement of reasons. (7) The owner or operator shall maintain the policy in full force and effect until the director consents to termination of the policy by the owner or operator as specified in subrule (12) of this rule. In addition, failure to pay the premium without substitution of alternate financial assurance as specified in this part constitutes a significant violation of these rules and warrants other remedies as the director determines necessary. The violation begins on receipt, by the director, of a notice of future cancellation, termination, or failure to renew due to nonpayment of the premium, rather than upon the date of expiration. (8) Each policy must contain a provision allowing assignment of the policy to a successor owner or operator. The assignment may be conditional on consent of the insurer if the consent is not unreasonably refused. (9) The policy must provide that the insurer shall not cancel, terminate, or fail to renew the policy except for failure to pay the premium. The automatic renewal of the policy must, at a minimum, 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, then the insurer may elect to cancel, terminate, or fail to renew the policy by sending notice, by certified mail, to the owner or operator and the director. The policy must unconditionally provide for all the following: (a) If the owner or operator fails to renew the policy or provide alternate financial assurance as approved by the director not less than 60 days before the expiration date of the policy, then the insurer shall immediately pay, to the director, the full amount of closure and postclosure coverage under the policy if requested, in writing, by the director before the expiration date of the policy. (b) Cancellation, termination, or failure to renew must not occur during the 120 days beginning with the date of receipt of the notice by both the director and the owner or operator, as evidenced by the return receipts. (c) Cancellation, termination, or failure to renew must not occur, and the policy must remain in full force and effect, if, on or before the date of expiration, any of the following occurs: (i) The director determines that the facility is abandoned. (ii) The operating license is terminated or revoked, or a new operating license is denied. (iii) Closure is ordered by the director, or a United States district court or other court of competent jurisdiction. (iv) The owner or operator is named as debtor in a voluntary or involuntary proceeding under the provisions of the bankruptcy reform act of 1978, Public Law 95-598. (v) The premium due is paid. (10) The policy must unconditionally provide that the insurer shall, after the hearing, immediately pay to the director any amount requested by the director up to the full value of the appropriate closure or postclosure policy to correct the closure or postclosure violations following issuance of a notice of violation or other order by the director that does both of the following: (a) Alleges that the owner or operator has failed to perform closure or postclosure care, or both, in accordance with the closure plan, postclosure plan, or other requirements of part 111, these rules, or the operating license. (b) Provides 7 days notice and opportunity for hearing. (11) If the current closure or postclosure cost estimate increases to an amount more than the face amount of the policy, then the owner or operator, within 60 days after the increase, shall either cause the face amount to be increased to an amount not less than the current closure or postclosure cost estimate and submit evidence of the increase to the director or obtain other financial assurance as specified in this part to cover the increase. If the current closure or postclosure cost estimate decreases, then the face amount may be reduced to the amount of the current closure or postclosure cost estimate following written approval by the director. (12) The director shall give written consent to the owner or operator that the owner or operator may terminate the insurance policy when either of the following occurs: (a) An owner or operator substitutes alternate financial assurance as specified in this rule. (b) The director releases the owner or operator from the requirements of this part in accordance with R 299.9703(5).