An Edison Electric Institute (EEI) committee receives a report on the formation of an industry-owned insurance company for insuring first-party property risks at nuclear sites. Facing challenges with insuring their nuclear sites through the commercial insurance industry, collective large nuclear power companies pursue this opportunity. They are encouraged by the prospect of being able to offer premium savings, and more importantly, the ability to self-determine the direction of the insurance being offered. After attempts to develop a shared approach with the commercial insurance industry falter, the Utility executives agree to form a self-insurance mutual insurer in Bermuda.

The Bermuda Parliament passes enabling legislation, clearing the way for NML to be formed. On June 1, 1972, the NML Board of Directors holds its first official meeting. That summer and fall involve a steady stream of meetings with individual utilities, to secure a sufficient number of participants, and state public service commissions and other legislative bodies to secure approvals and clear the path to start business. NML officially issues its first policies on January 1, 1973, covering 18 sites for its 14 Members. Each policy provides $100 million in limits and each Member accepts a risky retrospective premium, equal to 14 times the annual premium per policy, that NML could call if a full-limit loss occurs.

The founding Members of NML were:

• Alabama Power Company
• Carolina Power & Light Company
• Commonwealth Edison Company
• Consolidated Edison Company of New York
• Consumers Power Company
• Duke Power Company
• Florida Power & Light Company
• Georgia Power Company
• Iowa-Illinois Gas & Electric Company
• Pacific Gas and Electric Company
• Public Service Electric and Gas Company
• San Diego Gas & Electric Company
• Southern California Edison Company
• Wisconsin Electric Power Company

A landmark moment in the history of any insurance company is its first paid claim. For NEIL, this was the company’s second claim - a March 6, 1973 fire at Duke Power’s Oconee Station that results in NML making a $400,000 payment.

1973 also marks the first year NML pays a Policyholder Distribution: $3,872,730. This number equals 47% of earned premium for the year. Policyholder Distributions continue to be an important aspect of NEIL’s value proposition to its Members, and is a key indicator of the company’s overall success.

On March 28, 1979, Unit 2 at GPU’s Three Mile Island (TMI) Nuclear Station experiences perhaps the most significant (and famous) incident in the history of the U.S. commercial nuclear power industry. The accident forever changes the nuclear industry, the insurance of nuclear plants, and how the country views nuclear energy as a resource.

As to NEIL, this unfortunate event is notable for two reasons:

First — the commercial insurance market refuses to provide coverage to GPU, the owner of the site, for the undamaged TMI Unit 1, which is approved to restart. In response, GPU seeks coverage from NML. In a show of mutuality toward the greater good for the industry, NML agrees to insure TMI’s Unit 1 and accept GPU as a new Member.

Second — the TMI event reveals gaps and shortfalls in insurance coverage for the industry. 

Coverage shortfalls identified after the TMI accident leads to the formation of Nuclear Electric Insurance Limited (NEIL).

In the aftermath of the TMI event and the units being offline, GPU experiences severe financial difficulties related to its need to purchase power to replace that supplied by the TMI units. No insurance product exists to cover this risk, and NML is asked to explore whether an insurance mechanism can be developed to cover it. Following the blueprint from NML’s formation, NEIL was formed in Bermuda as a sister company to NML.

NEIL issues its first policies on September 15, 1980. Those policies, now known as our Accidental Outage Policies, covered excess replacement power costs incurred by insurers.

NEIL’s original Members include 11 of NML’s original Members, plus the following companies:

• AEP
• BG&E
• Boston Edison
• Cleveland Elec. Illuminating Co.
• Florida Power Corp.
• GPU
• Iowa Electric Light & Power
• Middle South Utilities
• Municipal Electric Authority of Georgia
• Northeast Utilities
• Northern States Power
• Philadelphia Electric Company
• Portland General Electric
• Rochester Gas & Electric
• Toledo Edison Company
• Virginia Electric and Power Company

NML and NEIL make a momentous move to Delaware. The companies choose The First State due to its corporate and insurance sophistication, and geographic convenience. In addition, Delaware’s Captive Insurance Code allows NML and NEIL to be licensed as Industrial Insured Captives without having to re-form as Delaware corporations. Today, NEIL remains a Bermuda Mutual Insurance Company that is licensed by the Delaware Department of Insurance to conduct business within the State.

Throughout the 1980s, the U.S. Nuclear Regulatory Commission (NRC) reviewed and modified its requirements pertaining to licensees maintaining specified amounts of property damage insurance on their nuclear sites. In August 1987, the NRC implements a rule requiring a minimum of $1.06 billion in property damage insurance, and that this coverage be prioritized toward costs for stabilization, decontamination and cleanup of a site after a nuclear event. In response, NML and NEIL begin a lengthy process to develop language for the Primary and Excess Property policies that satisfies the NRC requirements, and is acceptable to the Members and the companies who lent money to build the plants. In 1989, after months of discussions, that included input from the NRC, NML and NEIL modify all relevant policy forms to provide a unique "Nuclear Liability Coverage" that directly responds to NRC requirements. This coverage remains a key component of NEIL’s property damage coverage today.

Over the course of the 1990s, NML and NEIL Membership continue to grow to the point where the Member rosters become nearly the same. During this time, deregulation changes heavily impact the industry. As a result, the Members of each company agree to merge NML into NEIL. The key reasons for this decision are: present a single entity to the outside world; create the strongest possible insurance company to serve the industry moving forward; provide more flexibility in the purchase of reinsurance; achieve administrative benefits. 

On December 31, 1997, 25 years after NML issued its first policies, NML merges into NEIL, NML’s Members become NEIL Members, and NML ceases to exist. 

With consolidation of the U.S. industry, NEIL turns its attention to Europe, and the potential to offer insurance to non-U.S. companies operating commercial nuclear sites. In 1998, NEIL forms Overseas NEIL Limited or ONEIL in Dublin, Ireland (now NEIL Overseas dac). On January 1, 1999, Electrabel, the company that owns the 7 nuclear units (on 2 sites) in Belgium, becomes NEIL’s first International Member and ONEIL’s first Insured. Today, Electrabel, now known as Engie, remains an active Member. 

Between 2003 and 2008, the Spanish companies that own all the operating nuclear plants in Spain become insureds of NEIL Overseas and Members of NEIL. Today, those Members are EDP España, S.A., Endesa Generación, S.A., Iberdrola Generación Nuclear, S.A., Naturgy Generación,, S.L.U., and Nuclenor, S.A.

In the late 1990s, a number of NEIL Members began to leave the nuclear industry, closing or selling their nuclear plants. Some Members left the Mutual as a result, but others wanted to remain Members of NEIL. To do so though, they needed to maintain an insurance relationship with NEIL to support their Membership. So in 2000, NEIL begins to offer capacity to support our Members’ conventional asset programs.

This capacity is available to all Members. NEIL’s support of our Members’ conventional programs continues to grow and fills an important need for the Members that participate.
 

Over the last decade, significant changes occurred in the nuclear industry and the commercial insurance market for the larger energy industry. In 2020, NEIL decides to separate its growing conventional insurance business from the core nuclear business and forms a new subsidiary insurer to manage the conventional insurance programs. Cedar Hamilton Limited is formed and and licensed as a Bermuda Class 3 Insurer in December. Cedar Hamilton is also listed on the National Association of Insurance Commissioners Quarterly List of Alien Insurers, allowing Cedar Hamilton to serve NEIL’s Members as a Surplus and Excess Lines insurer in all 50 U.S. States.