Federal Register / VoL 54. No. 216 /.Tharaday. November 9.. 1989 / Rules and Regulations 47077
Dated: November 3,1989.
Lauro F. Cavazos,
Secretary of Education.
[FR Doc. 89-26383 Filed ll-*-89; 8:45 am]'
BILLMM CODE 40MMn-M
ENVIRONMENTAL PROTECTION
AGENCY
40CFRPAHT52 • .. .
[FRL-3644-3 KY-057]
Approval and Promulgation of
Implementation Pians
AGENCY: Environmental Protection
Agency (EPA).
ACTION: final rule.
SUMMARY: Pursuant to procedures
described at 54 FR 2214 (Janaary 18,
1989). EPA recently approved a minor
State Implementation Plan (SIP]
revision. This notice identifies tiie
revision EPA approved and incorporates
the relevant material into the Code of
Federal Regulations. Kentucky amended
401KAR 50:015 to incorporate by
reference Supplement A to the
Guidelines on Air Quality Models.
These modeling procedures are used in
processing prevention of significant
deterioration permits.
DATE This action will be effective
November 9.1989.
ADDRESSES: Copies of the material
submitted by the State may be
examined during normal business hours
at the-following locations:
Public Information Reference Unit.
Environmental Protection Agency, 401
M Street SW., Washington, DC 20460.
Environmental Protection Agency,
Region IV, Air Programs Branch. 345
Courtiand Street NE., Atlanta.
Georgia 03065.
Natural Resources and Environmental'
Protection Cabinet, Division for Air
Quality, 18 Reilly Road, Frankfort
Office Park, Frankfort, Kentucky
40801.
FOR FURTHER INFORMATION CONTACT:
Richard Schutt of the EPA Region IV Air
Program* Branch at the above address,
telephone (404) 347-2884 or FTS 257-p
2864..
SUPPLEMENTARY INFORMATION: EPA
Region IV has approved the following
minor SIP revision request under section
110(a) of the Clean Air Act (CAA):
StaSt
Kentucky
PoNutant
AH enter* PtrifatMt.. _.„,„..
Subf«ct,RMtMr
Suppfomtnt A to ttw GiirtaNnM tut
MrOut&r UodoM.
StvMirirta
March 23, 1989.
EPA has determined that this SEP
revision complies with all applicable
requirements of the CAA and EPA
policy and regulations concerning such
revision*. Due to the minor nature of this
revision, EPA concluded that conducting
notice-and-comment rulemaking prior to
approving the revision would have bees
^'unnecessary and contrary to the public
interest," and hence was not required by
the Administrative Procedure Act, 5
U.S.C. section 553{b). This SIP approval
became final and effective on the date
of EPA approval as listed in the chart
above.
The Office of Management and Budget
has exempted all SIP approvals from the
requirements of section 3 of Executive
Order 12291.
Under 5 U.S.C 805(b). I certify that
this SIP revision will not have a
significant impact on a substantial
number of small entities. See 46 FR 8709.
Under section 307(b)(l) of the CAA, as
amended, judicial review of this action
is available only be filing a petition for
review in the United States Court of
Appeals for the appropriate circuit
within 60 days of today. This action may
not be challenged later in proceedings to
enforce their requirements. See section
307(b)(2).
Ust of Subjects in 40 CFR Part 52
Air pollution control. Carbon
monoxide. Hydrocarbons, Incorporation
by reference, Intergovernmental
relations. Lead, Nitrogen dioxide.
Particulate matter. Ozone and sulfur
oxide.
Note: Incorporation by reference of the SIP
for the Commonwealth of Kentucky WM
approved by thr Director of the Federal
Register on July 1,1962.
Dated: August 25.1989.
L»« A. DeHihn* HI,
Acting Regional Administrator.
Part 52 of chapter I, title 40, Code of -
Federal Regulations, is amended as
follows:
PART 52—{AMENDED]
SubpartS—Kentucky
1. The authority citation for part 52
continues to read as follows:
Authority; 42 UAC 7401-7B42.
2. Section S2JS2O is amended by
adding paragraph (c)(62) to read as
follows:
§52*20 Identification of plan.
,«":•»••' > • -
(C) * **
(82) Revision to Kentucky Regulation
401 KAR 50:015, Documents
incorporated by reference submitted on
February 9,1989, by the Kentucky
Natural Resources and Environmental
Protection Cabinet Section 5(l)(a) was
amended to incorporate by reference
Supplement A to the Guideline on Air
Quality Models (Revised), July 1987.
Supplement A became effective
Februarys, 1988. Section 12(4) was
amended to reflect the current phone
number for the Florence Regional Office.
The revisions to 50&15 became state
effective October 28,1988.
(i) Incorporation by Reference.
(A) Kentucky Regulation 401 KAR
509015, Documents incorporated by
reference. Section 12(4) was amended
on October 28,1988.
(B) Supplement A to the Guideline on
Air Quality Models EPA-450/2-78-027R
that became effective February 5,1988.
(ii) Other material
(A) Letter of February fl, 1989, from
the Kentucky Natural Resources and
Environmental Protection Cabinet
[FR Doc. 89-28017 Tiled ll-ft-89: 8:45 am]
BOXUM CODC «sao-«o-H
40CFR Part 280
[FRli-3877-4]
Underground Storage Tanks
Containing Petroleum; Financial
Responsibility Requirements
AGENCY: Environmental Protection
Agency (EPA).
ACTION: Interim final rule.
SUMMARY: EPA is today publishing an
interim final rule amending the financial
responsibility requirements for
underground storage tanks containing
petroleum which appeared in the
Federal Register on October 28,1988 [53
FR 43322). Specifically, EPA is
interpreting the required language of
endorsements to existing insurance
policies under 40 CFR 2C0.97(b)(l) and
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47078 Federal Register / VoL 54. No. 216 / Thursday. November 9. 1989 / Rules and
certificates of insurance under 40 CFR
280.97(b)(2). The provisions interpreted
and amended include the requirement
that all endorsements and certificates
include a six-month extended reporting
period for claims-made policies and that
cancellations or terminations of
insurance by insurers will be effective
60 days aftsr written notice of such
termination is received by the insured.
The amendments nublished today will
bnng the financial responsibility
requirements into greater conformity
with insurance industry practices
concerning cancellation and extended
reporting and thus avoid possible
impacts on the availability and
affordability of such insurance.
DATES: The amendments to 40 CFR part
280 contained in this rulemaking
published today were effective on
October 26,1989. EPA will accept
comments on today's rulemaking that
are submitted on or before December 11.
1989,
ADDRESSES: Comments may be mailed
to the Docket Clerk (Docket No. UST-3),
Office of Underground Storage Tanks
(WH-582A), U.S. Environmental
Protection Agency, 401M Street SW.,
Washington, DC 20460. Comments
received by EPA. and all references
used in this document, may be inspected
in the public docket, located in Room
LG—100, U.S. Environmental Protection
Agency, 401M Street SW., Washington,
DC 20460, from ftOO a jn. to 4:00 p jn.,
Monday through Friday, excluding
Federal holidays.
FOR RiaTHEH INFORMATION CONTACT:
The RCRA/Superfund Hotline at (800)
424-3346 (toll free) or (202) 382-3000 hi .
Washington, DC.
SUPPLEMENTARY INFORMATION: On
October 25,1988, EPA promulgated
financial responsibility requirements
applicable to owners and operators of
underground storage tanks containing
petroleum (53 FR 43322). The final rules
permitted the owner or operator of a
petroleum underground storage tank to
satisfy'the requirements by obtaining
liability insurance from a qualified ,
insurer or risk retention group.
Section 280.97 of the rules specified.
certain coverage terms that must be
included in any new insurance policy or
in any endorsement to an existing
insurance policy. Except for limited
opportunities to supply information'
regarding the parties to the contract,
addresses, types of tanks, the scope of
coverage, and so forth, the insurer and
insured are not allowed to vary the
language of the policy or the
endorsement. Language in the
endorsement and certificate of
insurance found in § 280.97(b) require
that the insurer attest to the fact that the
language of the endorsement and
certificate of insurance is identical to,
the form specified hi the' regulations.
The Agency believes that the
requirement of uniform language would
ensure the availability of insurance to
cover corrective action or third psirty
damage payments. '
Through meetings with insurers and
segments of the regulated community,
EPA has subsequently learned of the
prevalence of certain interpretations of
the required language of the certificate
of insurance and endorsement not
intended by EPA. EPA has received
information indicating that insurers are
reluctant to issue policies or to enter the
underground storage tank insurance
market so long as these interpretations
are not refuted by EPA. Thus EPA is
today setting forth its intended
interpretations of the required language
of the certificate of insurance and the
endorsement as well as amending the
certificate and endorsement to require
that insurers use alternative language
that more explicitly reflects the intended
meaning of these provisions. EPA is not
changing the requirements that the
language of all endorsements and,
certificates of insurance be identical to
that language found in the regulations.
Instead, EPA is changing the exact
nature of that mandatory identical
language in accordance with the 'wishes
of insurers and insureds.
EPA is not soliciting comments prior
to the effective date of today's
rulemaking. Under section 3(b) of the -
Administrative Procedures Act S U.S.C.
553(b), the Agency may for good cause
or where the rule is interpretative!, omit
• notice and comment procedures. The
Agency believes that it has good cause
to omit notice and comment prior to the
effective date of today's technical
amendments. First with the exception of
changes to S § 280.97(b)(l)(d),
280.S7(b)(2)(d) and 280.105(a)(2), the
Agency believes that notice and
comment are unnecessary due to the
non-substantive nature of the changes.
These changes do not impose new.
• substantive standards upon the
regulated community, but rather require
only that insurers substitute in future . •
endorsements and certificates of
insurance language that more carefully
reflects the intended meaning of the
currently required provisions.
Second, the Agency believes that it is
in the public interest to omit notice and
comment procedures with respect to all
. of the regulatory amendments made .
today, including those to
55 280.97(b)(l)(d), 280.97(b)(2)(d) and
280.97(b)(2)(e), which govern
termination due to non-payment of
premium. The Agency has received
information to the effect that these
amendments may increase the
availability of insurance policies to
owners and operators of 100-999 tanks
required to comply with the financial
responsibility rule by October 26,1989,
as required by 40 CFR 280.91(b). At the
same time, the Agency has received
information that greater availability of
insurance-may ease the burden of
compliance with the financial
responsibility requirements among those
owners and operators subject to' the
October 26,1989, deadline. Finally, the
information referred to was received too
late to prepare and publish regulatory
changes in response to this information
before today. Thus the Agency has
concluded that due to the delays
involved hi such procedures, providing
notice and comment on these
amendments is contrary to the public
interest The delays consequent to
soliciting and responding to public
comments are likely to prevent these
amendments from becoming effective hi
time for insurers entering the
underground storage tank insurance
market because of these amendments to
prepare policies and for owners and
operators to obtain these new policies
by the October 26,1989, deadline.
However, the Agency is soliciting
comment on today's regulatory
amendments. Comments may be
submitted on-or before December 11,
1989. Comments will be considered by
the Agency and, if necessary, the
Agency will issue a final rule changing
today's amendments to respond to these
comments. •
The amendments to 40 CFR part 280
contained in today's rulemaking and
effective today apply only to those
insurance policies, endorsements and
certificates of insurance that are issued
or renewed after today's date. Thus
policies, endorsements and certificates
of insurance-that were issued prior to
today's date and in compliance with 40
CFR part 280 as written prior to today's
rule will continue to be valid until such
time as they are cancelled or
terminated, or must be renewed.
L Authority
•These regulations are issued under the
authority of sections 2002, 9001, 9002,
9003, 9004, 9005, 9006, 9007, and 9009 of
the Solid Waste Disposal Act as
amended. The principal amendments to
this Act have been under the Resource
Conservation and Recovery Act of 1976,
the Hazardous and Solid Waste
Amendments of 1984 (Pub. L. 98-616)
and the Superfund Amendments and
Reauthorization Act of 1986 (Pub. L. 99-
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Federal Register / Vol. 54, No. 216 / Thursday, November 9, 1989 /Rules and Regulations 47079
499) (42 U.S.C. 6921. 6991, 6991(a),
6991(b) 6991(c), 6991(d). 8991(e), 6991(f),
and6991(h)).
n. Background •
A. Six-month Extended Reporting
Requh-ement for Claims-Made Policies
Mandatory language in the
endorsement and certificate of
insurance requires that a claims-made
insurance contract cover claims for any
.occurrence that commenced during the
term of the policy and that is discovered
and reported to the insurer within six
months of the effective date of the -
cancellation or other termination of the
policy. The language of 40 CFR 2B0.97(b),
Endorsement paragraph 2.e; S 280.97(b),
Certification paragraph 2-e. reads: "The
insurance covers claims for any
occurrence that commenced during the
term of the policy that is discovered and
reported to the ['Insurer' or 'Group']
within six months of the effective date
of the cancellation or termination of the
policy.]" This provision was meant to
' address concerns that a claims-made
policy might leave a gap in coverage, if,
for example, a claim is reported after the
expiration of a policy for a release that
began prior to the policy expiration
date. Such claims might not be covered
by the usual claims-made policy that is
issued in the insurance industry. This is
discussed in the preamble to the
October 26,1988, final rule. 53 FR 43350-
51. .
Through discussions with -
representatives of the insurance
industry, however, EPA has learned that
the industry generally interprets EPA's
extended reporting period provision to •
require that every claims-made policy
issued, regardless of what retroactive
date is incorporated, contain an
extended reporting period. Because
charging a fee for the extended reporting
period is a widespread practice within
the industry, this interpretation has
caused insurance companies to routinely
request payment for the extended
reporting period at the start of the policy
period. Due to a reluctance on the part
of insured* to pay for this coverage at
the beginning of a policy period when
they expect to renew their policy or
otherwise purchase a new policy with
the same retroactive; date as their prior
policy, this interpretation is apparently
impinging upon the availability of UST
insurance.
As explained below; however, this
prevalent interpretation of the extended
reporting period is not intended by the
Agency, and is in fact unnecessary to
the protection of human health and the
environment EPA intends that insurers
provide extended reporting period
coverage only where the termination or
non-renewal of the policy results in the
owner or operator having no coverage
for releases that occurred during the
time period of the previous policy and
which are reported within six months
after the termination or non-renewal of
that policy. For discussion purposes,
EPA .has labelled this predicament as a
"gap" in coverage. Because a "gap" in '
coverage-will not always exist at the
termination or other non-renewal of
every insurance policy, interpreting the
EPA regulation to require every
insurance policy to have an extended
reporting period results in the provision
of unnecessary coverage and,
considering Jhe industry's standard fee
practice, an unnecessary restraint upon
die availability of UST insurance. For
instance, a "gap" in coverage will not
normally occur where ah existing policy
is renewed. According to standard
insurance industry practice, a renewed
policy incorporates the retroactive date.
of the previous policy. Thus should the
insured who renews his policy report a
. release that occurred during tide time
period of the previous policy, the release
would be covered by the renewed
policy. It may also be true that no "gap"
will exist even when the insured
purchases a new policy from a different
insurance company. Many companies
will incorporate the retroactive date of
the insured's previous policy (as well as
the same type of insurance coverage as
provided by the previous policy) for ;
releases that are reported during the
time period of the new policy but which
occurred during the time of the previous
policy. Here, as in the case of renewed
policies, die requirement to obtain an
extended reporting period at the end of
the first policy period would not be of
any benefit to human health and the -
environment since the new policy
provides the same coverage as that
provided by the extended reporting
period. -
EPA .believes that there are only two
situations where the termination of a
policy results in a "gap" in coverage and
thus only two situations where die
insured whose policy is terminated must
obtain extended reporting period
coverage. The first situation occurs
where the insured renews his existing
policy or purchases a new policy and
the renewed or new policy contains a
retroactive date subsequent to the
retroactive date of the insured's
previous insurance policy. The second
situation occurs where the policy is
terminated or is otherwise not renewed
and the insured elects a financial
assurance mechanism other than
insurance (such as a guarantee, surety
bond, etc.) as a replacement EPA is
today promulgating revised language to
clarify EPA's intended interpretation of
paragraph 2.e. of the Endorsement
contained in 5 280.97(b)(l) and of
paragraph 2.e. of the Certification
- contained in § 280.97(b}(2).
. In addition, EPA is also revising the
language of these two paragraphs to
state explicitly what it had previously
believed to be self-evident: that claims
reported to the insurer during the six-
month reporting period are subject to all
of the terms, limits and conditions that
existed during the'policy period that it
modifies. Because die Agency has
received questions on this matter since
promulgating, die October 26,1988, rule,
the Agency decided to add clarifying
language on this point in addition to the
more important changes to S 280.97(b)
described above.
The language of paragraph 2.e. of the
Endorsement and Certification in
S 280.97(b) now reads: ,
The insurance coven claims otherwise •
covered by the policy that are reported to the
["Insurer" or "Group"] within six months of
the effective date of cancellation or non-
renewal of the policy except where the new
or renewed policy has the same retroactive
date or a retroactive date earlier than that of
the prior policy, and which arise but of any
covered occurrence that commenced after the
policy retroactive date, if applicable, and
.prior to such policy renewal or termination
date. Claims reported during such extended
reporting period are subject to the terms.
conditions, limits, including limits of liability,
and exclusion* of the policy.
Because EPA expects that these
regulatory changes will result in owners
and operators purchasing extended •
reporting period coverage, where
needed, at die end, rather than the
beginning of tiieir policy period, EPA
wishes to clarify exactly when such
coverage must be obtained for
compliance purposes. Where extended
'reporting period coverage is necessary,
such coverage must be obtained before
the time and date of die expiration of
the prior policy;
A related issue raised by insurers
concerns die possibility of double
coverage-through an expansive
interpretation of what constitutes
"termination" of the claims-made policy
under^i 280.97(b)(l) Endorsement
paragraph fe), and § 28Q.97(bl(2)
Certification paragraph (e),—the act that
triggers the six-month extended
reporting requirement discussed above.
For example, under some state
insurance laws, .the mere addition or
deletion of retail outlets from a
company's insurance policy may
constitute a "termination" of die policy.
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47080
Federal Register / Vol. 54. No. 216 / Thursday. November 9, 1989 / Rules and Regulations
Such a change would not constitute a
"termination" under EPA's
interpretation of that term. EPA
interprets "termination" to encompass
only those changes that could result in a
gap in coverage as where .the insured
has not obtained substitute coverage or
haa obtained substitute coverage with a
different retroactive date than the
retroactive date of the original pokey.
Finally, the Agency wishes to clarify
its position witn respect to the current
insurance industry practice of charging
insureds for the six month extended
reporting period. EPA's regulations
require that owners and operators
obtain a six-month extended reporting
period whenever a gap in their
insurance coverage may exist EPA's
regulations go to owners and operators
and not to those providing the insurance
required under the rules. Therefore,
whether insurers choose to provide the
extended reporting period to insureds
only for an additional cost is of no
concern to the Agency with respect to
compliance with the financial
responsibility requirements. Insurers are
free to provide the extended reporting
period only for an additional cost;
however, insureds who fail to obtain
•uch coverage due to non-payment of
this added cost will be out of
compliance with EPA's financial
responsibility requirements.
B. Sixty Days Required Coverage
Following Cancellation or Termination
by Insurer
Mandatory language in the
endorsement and certificate of
insurance requires that cancellation or
any other termination of the insurance
by the insurer will be effective only
upon written notice and only after
expiration of 60 days after written
notice is received by the insured. 40 CFR
280.97(b](l) Endorsement paragraph d
and 280.97(b)(2) Certification paragraph
d. A-separate provision of the
regulations restates this requirement for
cancellation of insurance. 40 CFR
280.105(a)(2). Additionally, the insurer
must provide a six-month extended
reporting period following cancellation.
These provisions were meant to ensure
that an owner or operator whose
insurance was cancelled or terminated
would have sufficient time to obtain an
alternative assurance mechanism,
thereby avoiding eny unacceptable gaps
in coverage. These provisions did not
distinguish between the effective date of
cancellation where the cancellation was
due to non-payment of premium or
misrepresentation as opposed to
cancellation for any other cause.
Subsequent discunioas with insurers
and segments of the regulated
community that are seeking insurance
have persuaded the Agency that the
provision for extended coverage fcir
sixty days following cancellation of
coverage for non-payment of premium or
misrepresentation is reducing the
availability of insurance. The Agency
has received indications that some
insurers have decided against entering
the market because of concerns that
they might be forced to pay claims
without ever having received any
premiums or where the insured hais
made a misrepresentation. The Agency
has also been informed that other
insurers have increased premiums to
protect against situations in which the
insurer would have to pay for losses for
which it has never collected a premium.
EPA is today amending the language
of S 280.97(b)(l) Endorsement paragraph
d, §.280.97fb)(2) Certification paragraph
d and § 280.10S(a)(2) to allow an insurer
to terminate an insurance contract for
non-payment of premium or
misrepresentation by the insured after a
10 day notice period. EPA does not;
intend for this shortening of the
coverage period from 60 to 10 dayi to
apply to termination for any reason
other than non-payment of premium or
misrepresentation. The Agency is uware
that some state insurance laws mandate
a longer notice period following
cancellation. In order to accomnuxlate
these state-specific situations, the
amended language of 5 28O57{b)(l|
Endorsement paragraph d. S 280.97'(b)(2)
Certification paragraph d and
5 2S0.105(a)(2j specifies that the
mandatory coverage period following
termination for non-payment of pntmium
or misrepresentation shall be a
"minimum of 10 days." The insurer it
still bound to provide the owner or
operator with written notice of
cancellation with the 10 day period
beginning upon receipt of notice by the
owner or operator.
When the final rule was promulgated,
the Agency believed that a 60-day
cancellation coverage period was
•necessary to allow the insured owner or
operator to. obtain an alternative
assurance mechanism, and thus avoid
any unacceptable gap in coverage. The
Agency thought that this requirement
would not have a serious impact oil .
insurance providers since insurers could
protect themselves by establishing an
appropriate schedule of premium
payment For example, insurers could
require payment 90 days before the
. expiration date of coverage for
maintenance or renewal of the policy.
The insurer could then terminate tine
policy with 00 days notice if an insiured
does not meet the schedule of payment
within 30 days of the premium due date.
Subsequently, the Agency has come to
a better understanding of the economic
impact on insurers of not allowing more
than a 10-day cancellation period for
non-payment of premium or
misrepresentation. Insurers currently
covering USTs have found restructuring
premium payment schedules to be costly
and impractical primarily because the
practice is a major departure from
existing industry practices. An
important consequence of the 60-day
cancellation requirement for non-
payment of premium or
misrepresentation has been the
deterrence of new insurers from entering
the UST market
Although the Agency continues to be
concerned about the adequacy of the 10-
day cancellation in terms of finding
alternative financial assurance after
cancellation for non-payment EPA does
not want this requirement to have an
impact on the availability and
affordability of UST insurance. The
Agency believes that today's
amendment will bring the financial
responsibility requirements into greater
conformity with insurance industry
practices concerning cancellation and
thus avoid possible impacts upon the
availability and affordability of such
insurance. Generally, EPA believes that
the insurance industry should be paid
for bearing the risks of corrective action
and third-party liability costs. In the
cases of non-payment the industry is
unfairly undertaking risks without
rightful compensation. For those
insurers resisting entry into the market
the threat of insuring risks without ever
receiving any premium is apparently a
serious concern. Thus, today's change
should remove a serious obstacle to the
supply of insurance to owners and
operators of underground storage tanks.
The Agency is not amending the
requirement for a six-month extended
reporting period following cancellation
for non-payment of premium or
misrepresentation. As noted in the
previous section, the Agency believes
that such a reporting period must be
mandatory for all claims-made
insurance contracts used to demonstrate
financial assurance, regardless of the
reason for termination. The six-month
extended reporting period is essential to
avoiding gaps in coverage that could
threaten human health and environment
especially in.cases where the owner or
operator .may have as few as 10 days
upon receipt of notice of cancellation to
obtain substitute coverage. The
distinction between the two provisions,
extended reporting period and the
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Federal Register / Vol. 54. No. 216 / Thursday. November 9. 1989 / Rules and Regulations
47081
effective date of cancellation, is that
even if a policy is cancelled for non-
payment of premium, the extended
reporting period merely extends tha time
during which an insured may report
occurrences covered by the policy for
which he or she has already paid. Thus
the extended reporting provision does
not provide the- insured with a benefit
for which he or she has not paid. In
contrast, any delay in the effective date
of a policy cancellation or termination
due to regulatory requirements provides
insureds who failed to pay their
premiums coverage for which they have
not paid.
C. Other Regulatory Changes , -
Today's action makes three other
regulatory changes hi the requirements
for the language in the endorsement and
certificate of insurance. As noted above,
EPA is not changing the requirement
that the language of all endorsements
and certificates of insurance be identical
to that language found in the
regulations. Instead, EPA is changing the
mandatory language itself to meet the
needs of insurers -and insureds.
While insurance policies issued in
connection with the financial
, responsibility requirements must be
amended by attaching the endorsement
or evidenced by the certificate of
insurance, the endorsement and
certificate do not stand apart from the
insurance policy. Some insurers were
concerned that the existing mandatory
language did not allow the parties to
make the relationship between the
scope of the policy and the requirements
of the certificate and endorsement clear.
The first two technical amendments
made today are intended to make that
connection.
First the phrase "in accordance with
the subject to the limits of liability,
exclusions, conditions, and other terms,
of the policy" is being added to the first
paragraph of both the endorsement and
certification after the explanation of
what the endorsement and certificate
provide to clarify that these instruments
do not narrow or broaden the scope of
coverage provided in the policy itself.
This correction also brings the required
regulatory language into conformity with
standard UST insurance industry
practices. The amendment should
reduce any confusion on- the part of
insureds concerning the coverage they
are purchasing and also mi
insurers' concerns about potential
conflicts with insureds over the scope of
coverage. The second phrase, "which
are subject to a separate limit under the
policy," is inserted in the language of the
certificate and endorsement to modify
the phrase "exclusive of legal defense
costs" in paragraph 1 of the
endorsement and certification where the
limits of liability found in the policy are
discussed. While the language of the
endorsement and the certification
prevent the insurer from describing any
existing limits upon legal defense costs,
EPA did not intend to indicate that such
limitations are not allowable or that
such limitations that may be present in
.the policy are not valid. The Agency
does not want the mandatory language
concerning legal defense costs to
inerfere with the parties' understanding
of the policy itself. Third, the phrase
"after the policy retroactive date" is
being added to specify the beginning of
the period when occurrences are
covered under the policy. It is common
for insurers to establish such a date in a
policy and use that date to determine
when to divide coverage between
policies when a second policy is coming
into effect. Each of the above phrases
being added conform to standard UST
insurance industry usage and are not •
intended to change the requirements for
the certificate and endorsement These
technical changes are effective
immediately.
List of Subjects in 40 CFR Part 280
Administrative practice and
procedure, Environmental protection,
Hazardous materials insurance. Surety •
bonds. Underground storage tanks.
Dated: October 28,1989.
Jonathan g. Cannon.
Acting Assistant Administrator, Office of
Solid Waste and Emergency Response.
Accordingly, title 40 of the Code of
Federal Regulations is amended as set
forth below.
PART 280—TECHNICAL STANDARDS
AND CORRECTIVE ACTION
REQUIREMENTS FOR OWNERS AND
OPERATORS OF UNDERGROUND
STORAGETANKS
1. The authority citation for part 280
continues to read as follows:
Authority: 42 U.S.C. 6912. 6991, 6S91(a),
6991(b), 6891{o). 6991(d), 8991(e}, 8991(f), and
9991(h).
2. Section 280.92 is amended to add
the following new definition:
§ 280.92 Definition of terms.
(o) Termination under 5 280.97(b)(l]
and 5 280.97(b)(2) means only those
changes that could result in a gap in.
coverage as where the insured has-not-
obtained substitute coverage or has
obtained substitute coverage with a
different retroactive date than the
retroactive date of the original policy.
S 230.97 [Amended]
3. In | 280.97(b)(l), under
"Endorsement", the first paragraph of 1.
: is amended by removing " 'accidental
releases'; if' and adding " 'accidental
release'; in accordance with and subject
to the limits of liability, exclusions,
conditions, and other terms of the policy;
4. In 5 280.97[b](l). under
"Endorsement.-", in the second
paragraph of J., after "exclusive of legal
defense costs." insert ", which are
subject to a separate limit under the
policy."
5. In S 26U97(b)(l}. under
"Endorsement", in paragraph 2.d^ after
"['Insurer' or 'Group']" insert ", except
for non-payment of premium or
misrepresentation by the insured,"
6. In § 280.97(b)(l), under
"Endorsement-", -in paragraph 2.dM after
"received by the insured." insert
"Cancellation for non-payment of
premium or misrepresentation by the
insured will be effective only upon
written notice and only after expiration
of a minimum of 10 days after a copy of
such written notice is received by the
insured."
7. In, § 2SO.fl7(b}(l), under
"Endorsement", the first paragraph of
2.e., ia revised to read as follows:
e. The insurance coven claims otherwise
covered by the policy that are reported to the
["Insurer" or "Group"] within six months of
the effective date of cancellation or. non-
renewal of the policy except where the new
or renewed policy has .the same retroactive
date or a retroactive date earlier than that of
the prior policy, and which arise out of any
covered occurrence that commenced after the
policy retroactive date, if applicable, and
prior to such policy renewal or termination
date. Claims reported during such extended
reporting period are subject to the terms,
conditions, limits, including limits of liability,
and exclusions of the policy.]
* »•• *
a In § 280.97(bX2), under
"Certification:", the first paragraph of 1..
removing " 'accidental releases'; if" and
adding " 'accidental releases'; in
accordance with and subject to the
limits of liability, exclusions, conditions.
and other terms of the-policy; if.
9. In § 280.97(b)(2), under
"Certification?', in the second paragraph
of 1., after "exclusive of legal defense
costs." insert ", which are subject to a
separate limit under the policy."
10. In $ 280.97(b)(2), under
''Certification?', in paragraph 2.d»
"['Insurer* or 'Group']" insert ", except
for non-payment of premium or
misrepresentation by the insured.".
11. In S 280.97(b)(2), under
"Certification.-", in paragraph 2.d.. after
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47082 Federal Register / Vol. 54. No. 216 / Thursday, November 9, 1988 / Rules and Regulations
"received by the insured." insert
"Cancellation for non-payment of
premium or misrepresentation by the
insured will be effective only upon
written notice and only after expiration
of a minimum of 10 days after a copy of
such written notice is received by the
insured."
12. In 5 280.97(b)(2), under
"Certification:", the first paragraph of
2.e.. is revised to read as follows:
2. * * *
e. The Insurance covers claims otherwise
covered by the policy that are reported to the
["Insurer" or "Croup"] within six months of'
the effective date of cancellation or non-
renewal of the policy except where the new
or renewed policy has th« same retroactive
date or a retroactive date earlier than that of
the prior policy, and which arise out of any
covered occurrence that commenced after the
policy retroactive date. If applicable,-and
prior to such policy renewal or termination
•date. Claims reported during such extended
reporting period are subject to the .terms,
conditions, limits, including limits of liability,
and exclusions of mi policy.]
13. Section 280.105 is amended by
revising paragraph fa)(2) to read as
follows:
$ 280.105 Cancellation or nomvnewai by a
provider of financial a**uranc*.
ACTION: Final rule.
(a) • • *
(2) Termination of insurance or risk
retention group coverage, except for
non-payment or misrepresentation by
the insured, or state-funded assurance
may not occur until 60 days after the
date on which the owner or operator
receives the notice of termination, as
evidenced by the return receipt
Termination for non-payment of
premium or misrepresentation by the
insured may not occur until a minimum
of 10 days after the date on which the
owner or operator receives the notice of
termination, as evidenced by the return
receipt
[FR Doc. 83-281M Filed ll-S-«9;*45 am]
•4UJWO CODE M*0-«0-»l
40 CFR Part 799
[OPTS-42108; FRL 3682-7]
RIN 2070-AB07
Testing Consent Order on
Crotonaldehyde
AGENCY: Environmental Protection
Agency (EPA).
SUMMARY: This document announce:;
that EPA has.signed an enforceable
testing Consent Order with Eastman
Kodak Company (Kodak). Kodak has
agreed to perform certain chemical fate
and environmental effects tests on
crotonaldehyde (CAS No. 4170-30-3).
Kodak may also perform a monitoring
study for crotonaldehyde, as described
in this notice and detailed in the Order.
This action, in response to the Toxic
Substances Control Act (TSCA)
Interagency Testing Committee's (ITC's)
designation of crotonaldehyde for
testing consideration, adds
crotonaldehyde to the list of testing
Consent Orders in 40 CFR 799.5000 for
which the export notification
requirements of 40 CFR part 707 apply.
EFFECTIVE DATE: November 8,1989.
FOR FURTHER INFORMATION CONTACT:
Michael M. StahL Director,
Environmental Assistance Division |TS-
799), Office of Toxic Substances, Rm.
EB-44,401M St, SW., Washington, DC
20460, (202) 554-1404, TDD (202) 554-
0551.
SUPPLEMENTARY INFORMATION: Under
.procedures described in 40 CFR par): 790,
Kodak has entered into a testing
Consent Order with EPA in which
Kodak has agreed to perform certain
chemical fate and environmental effects
tests for crotonaldehyde. This rule
amends 40 CFR 799.5000 by adding
crotonaldehyde to the list of chemical
substances and-mkctnres subject to
testing Consent Orders. '
LITC Recommendation
In its twenty-second Report to EPA,
published in the Federal Register of
May 20.1988 (53 FR 18196), the
Interagency Testing Committee (TTG)
recommended with intent- to-designate '
that crotonaldehyde be considered for
environmental effects and chemical fate
testing, tile recommended .environniisntal
effects testing was acute tcoddry to
algae, fish, and aquatic invertebrates.
Recommended chemical fate testing was
volatilization rate from water and
aerobic aquatic biodegradation.
EPA responded to the ITCs
designation of crotonaldehyde by
holding a public focus meeting on June
17,1938, announcing that it would
pursue testing for crotonaldehyde, either
by a TSCA section 4 testing rule or by a
Consent Order. The proposed testing
would include both chemical fate arid
environmental effects.
In its Twenty-third Report, published
in the Federal Register of November 16,
1988 (53 FR 46262), the ITC followed on
its recommendation by designating
crotonaldehyde for response by EPA
within 12 months.
IL Testing Consent Order Negotiations
In the Federal Register of May 20.1988
(53 FR 18196), and in accordance with
the procedures established in 40 CFR
790.28, EPA requested persons
interested in participating in or
monitoring testing negotiations on
crotonaldehyde to contact EPA. EPA
held public meetings with interested
parties on July 21,1988, October 19,
1988. and March 3,1989, to discuss the
testing appropriate for crotonaldehyde.
On October 2,1989 EPA and Kodak
.signed a testing Consent Order fort,-
crotcmaldehyde. A consent order is not
based on a formal finding and expedites
testing, while retaining the same TSCA
penalty provisions applicable under
rulemaking. Under the Order. Kodak has
agreed to conduct or provide for the
conduct of aquatic toxidty tests and
aerobic aquatic biodegradation testing.
Kodak has also agreed to perform.
chronic toxicity testing of aquatic
organisms depending on the results *f
the acute toxicity testing and, if
conducted, the results of effluent-
monitoring, the specific test standards to
be followed and the testing schedule for
each test are included in the Order. '•
Procedures for submitting study plans,
modifying the Order, monitoring the
testing and other provisions are also
included in the Order.
m. Use and Exposure ;
Crotonaldehyde, also known as 2-
butenai is a four-carbon aldehyde ,
having a double bond between the alpha
and beta carbon atoms, Crotonaldehyde
is typically manufactured by aldol
condensation of acetaldehyde followed
by dehydration (Ref. 1). Crotonaldehyde
is liquid at environmental temperatures
(Ref. 2). It is highly soluble in water (181
g/L. measured), moderately volatile
(estimated Henry's law constant of 1.881
x 10~» arm m*/mole at 20*C). and has
an estimated low Log P value of 0.55
(Refs. 3,4, and 5).
Crotonaldehyde is used mostly as an
intermediate to produce crotonic acid,
sorbic acid, 3-methoxybutanol and n-
butanol Less commonly, it may have
such diverse uses as an additive to wool
to reduce solubility in alkali, a »•
plasticizer of terpene resins, and a ,
deodorizer in the paper industry, and in
the preparation of some pesticides (Ref.
1).
Crotonaldehyde is produced in the
United States by only one company;
Kodak, which produces crotonaldehyde
by a continuous process with a reported
1987 production volume between 5 and
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