Date: October 15, 2012
Source: News Room
California has adopted a new law that allows landfill operators to self-insure or rely on "captive insurance" to comply with California's environmental rules. Environmental groups had opposed the law out of concern that it could expose the state to significant liability risks if landfill environmental controls fail and regulators have to take over management of facilities. AB 480, signed into law by Gov. Jerry Brown on Sept. 28, requires the California Department of Resources, Recycling & Recovery (CalRecycle) to accept the use of captive insurance for up to 50 percent of the financial assurance required of an operator of a landfill.
Captive insurance refers to a strategy some corporations use where an in-house, company-owned-and-operated insurance entity covers the potential costs and liability of landfills. The now-defunct state waste board eliminated captive insurance as a compliance option under the rules in the 1990s. Waste Management, which sponsored AB 480 and has the largest captive insurance operation for waste facilities in the country, argues that captive insurance allows the company to more efficiently control its protection options and saves money compared with contracting with outside insurance carriers.