oversight

Underground Petroleum Tanks: Owners' Ability to Comply With EPA's Financial Responsibility Requirements

Published by the Government Accountability Office on 1990-07-09.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

GAO

.Idy I!)!)0
              UNDERGROUND ~-
              PETROLEUM TANKS

              Owners’ Ability to
              Comply With EPA’s
              Financial Responsibility
              Requirements

                                          E


                                 141964
      United States
GAO   General Accounting Of&e
      Washington, D.C. 20648

      Resources, Community,   and
      Economic Development    Division




      July9,1990

      The Honorable   Max Baucus
      Chairman,   Subcommittee    on
        Environmental   Protection
      Committee on Environment
        and Public Works
      United States Senate
      The Honorable    John Chafee
      Ranking Minority     Member, Committee
        on Environment     and Public Works
      United States Senate

      On February     20, 1990, we testified           before the Subcommittee
      on the ability      of owners of underground            petroleum    storage
      tanks to comply with the Environmental                 Protection    Agency's
      (EPA) financial      responsibility        requirements.         We
      supplemented     our testimony        in a briefing       for Subcommittee
      staff   on February      26, 1990, and agreed at that time to
      provide   the Subcommittee         with this fact sheet.           The fact
      sheet summarizes       information      obtained     from telephone      surveys
      of state officials        and insurance       companies,      which we
      conducted    in February      and March 1990.
      According     to EPA, hundreds of thousands of the nation's                   2
      million     underground       tanks have corroded       and are leaking.
      Leaks from these tanks can contaminate                 groundwater--a      source
      of drinking      water for half of our nation--and              cause fires      or
      explosions.        To ensure that tank owners are able to pay to
      clean up leaks from tanks and compensate victims                    for damages
      caused by leaking          tanks,    EPA's regulations      require    that tank
      owners have $1 million             or $2 million    worth of insurance        or
      demonstrate      financial       responsibility     by some other approved
      method, such as coverage under special                 state trust     funds.
      EPA's regulations    divide   tank owners into four categories
      based mainly on the number of the tanks they own.
      Categories    1 and 2 include    large to medium-sized        firms
      owning 100 or more tanks.        Owners in these categories           had to
      comply with EPA's financial        responsibility     requirements       by
      January and October 1989, respectively.             Category     3 includes
      owners of 13 to 99 tanks,       and category      4 is made up of
      owners of 1 to 12 tanks and most non-marketers--owners                  who
      do not market petroleum      products    and who have a tangible          net
    B-239333


    worth of less than $20 mil1ion.l           Under EPA's original
    regulations      category-3   and -4 owners had to comply by April
    and October 1990, respectively.           However, on March 14, 1990,
    EPA announced that it would amend its regulations            to extend
    by 1 year the compliance deadlines          for firms in categories    3
    and 4. On April 25, 1990, the EPA Administrator             signed an
    interim    rule to formalize      the l-year extension for
    category-3     firms.     Our work focused on the ability      of
    category-3     and -4 firms to comply with EPA's financial
    responsibility       requirements    and on the coverage provided to
    them by insurers.
    As of May 2, 1990, 36 states had created trust funds to pay
    for cleanups and, in many cases, compensate victims         of leaks
    from underground petroleum storage tanks.         EPA must approve
    these trust funds before owners can use them to satisfy
    federal  financial responsibility    regulations.     However, EPA
    approves the trust funds conditionally        as soon as states
    submit plans for review.      As of May 2, 1990, 23 states had
    submitted fund plans for EPA's review.         EPA had formally
    approved 11 funds after review and conditionally        approved 12
    others pending review.    Most of the states that have not
    submitted fund plans for approval so far intend to do so.
    To obtain information       regarding category-3         and -4 tank
    owners' ability    to meet EPA's financial           responsibility
    requirements,    we conducted telephone surveys between
    February 12 and March 28, 1990. We were able to contact 46
    state underground storage tank program officials                  to ask
    whether tank insurance is available            in their states and
    whether category-3       and -4 owners can obtain it.2              We also
    asked them about state programs to help owners meet the
    financial   responsibility      and/or technical        requirements      and
    about lending institutions'         attitudes     towards providing
    loans to owners.       We collected      information      from insurance
    company representatives       on the number and terms of policies

    lNon-marketers    who have a tangible   net worth of more than
    $20 million    are included in category 1. EPA defines
    "tangible   net worth IV as the value of assets less liabilities
    and such intangible     assets as rights to patents or
    royalties.
    2We spoke with officials    in 45 states and the District    of
    Columbia.    In this fact sheet, references  to states include
*   the District   of Columbia.   We were unable to reach officials
    from five states within the time available     for our survey.
    2
    B-239333


    issued to tank owners and the effect that lower coverage
    requirements  might have on premiums.  Details on the
    objectives,  scope, and methodology are contained in appendix
    I.


    State   Officials
    According to most state officials,             tank insurance is being
    offered    for sale in their states.           Only the Oklahoma,
    Tennessee, and Mississippi           state officials         reported that no
    insurance companies offer pollution              liability       insurance to
    category-3     and -4 tank owners in their states.                  Four other
    state officials        reported that insurance is virtually
    unavailable      to category-3      and/or category-4         owners in their
    states for one or more of the following                  reasons:      the high
    cost of insurance premiums; the inability                  of owners to meet
    technical     requirements       for obtaining     insurance;       and
    insurance companies' unwillingness             to underwrite         insurance
    for category-3       and -4 owners.       Nevertheless,         of the
    officials     who provided an estimate,          one-third       said that more
    than half of the category-3           businesses would not have been
    able to obtain insurance by the April 1990 compliance
    deadline:     74 percent said that more than half of the
    category-4     firms would not have been able to obtain
    insurance by the October 1990 deadline.                   These officials
    frequently     attributed      this situation      to costly private        tank
    insurance and owners' having old, high-risk                   tanks.
    Nearly one-third      of the state officials     believe that more
    than half of the category-3       owners would not have been able
    to comply with the financial       requirements    by the April 1990
    deadline.     More than two-thirds     of the officials     believe
    that more than half of the category-4         owners would not have
    complied by the October 1990 deadline.           Even in states with
    trust funds, officials      were not very optimistic      about
    category-3    and -4 owners' compliance.        Nearly one-third    of
    the officials    in these states said that more than half of
    the category-3     firms would not have been able to comply bY
    the April 1990 deadline.        The majority    of the officials    in
    these states said that more than half of the category-4
    firms would not have been able to comply by the October 1990
    deadline.
i   The majority of officials     in the states with trust funds
    with whom we spoke said that their states are not planning
    to establish financial    assistance  programs that would
    3
  B-239333


 provide,   for instance,   direct   loans or loan        guarantees to
 assist small business owners to upgrade or             replace tanks.
 However, in the majority      of states with no        trust funds,
 state officials    said that their states are          planning to
 establish    or have already implemented such          programs.
 We asked state officials        about the lending practices     of
 financial   institutions      in their states towards category-3
 and -4 owners.        Most state officials     who provided an
 opinion indicated       that lending institutions      in their states
 are cautious or reluctant        to make loans to category-3     and -4
 owners; several officials        cited lending institutions'
 concerns about liability        as a reason for the hesitancy.
  Insurance   Representatives
 We were able to identify              11 insurance companies that offer
 full coverage, that is, coverage for corrective                   action plus
 third-party       liability       costs, to category-3      and -4 owners.
 We have not included information                 on 1 of the 11 companies
 because it did not respond to our survey in time to be
 included in our summary of insurance companies.                     Of the 10
 insurers     included in our summary, 3 account for more than 90
 percent of the approximately               3,400 policies    issued
 nationally      to these owners of smaller firms.               The two
 largest providers,            Federated Mutual Insurance Company
  (Federated)      and the Petroleum Marketers Mutual Insurance
 Company (Petromark),3             have issued the greatest       number of
 policies    to category-3          and -4 tank owners, issuing 1,800 and
 1,000 policies,           respectively.       Two companies have issued 10
 or fewer policies,            and three companies have issued no
 policies.       Based on information           from insurance company
 representatives          who responded to our questions,          average
 policy premiums per tank ranged from $800 to $1,600 for
 category-3      and -4 firms: average site premiums ranged from
 $1,600 to $19,000; minimum policy premiums ranged from

  30n April 10, 1990, Petromark announced that it was unable
  to raise $18 million        in capital by April 9, 1990, as
  required by the State of Tennessee, and, as a result,
  Petromark dissolved       its Board of Directors.   Petromark also
  notified   its customers that those who were actively       insured
  at that time would be able to obtain insurance from Lloyds
  of London.      On May 3, 1990, the State of Tennessee placed
Y Petromark    into  liquidation.


  4
B-239333


$1,300 to $5,000; and minimum deductibles       ranged from $0 to
$25,000 for category-3     and -4 firms.   Typically,  insurance
company representatives     responded that they assess each
owner's application     to arrive at an individualized    insurance
rate.
When we asked if premiums would decrease if EPA would lower
its coverage limit below the currently     required $1 million
per occurrence,   two of the seven company representatives     who
answered the question said that premiums would only decrease
slightly  and one said premiums would decrease but did not
estimate how much. Four company representatives      said
premiums would not decrease.     Of the seven representatives,
four stated that most of the risk falls below $500,000.
Based on insurance representatives'    responses, it appears
that EPA would have to lower its limits     below $500,000 in
order to reduce insureds'   premiums.


Section 1 presents background information              on EPA's financial
responsibility          requirements.     Section 2 presents state
underground storage tank program officials'              responses to
our questions regarding category-3              and -4 owners' ability    to
comply with EPA's requirements.              Section 3 presents
information       obtained from the companies that provide
pollution      liability       insurance.
As agreed with the Subcommittee staff,              we did not obtain
official       agency comments on this fact sheet.           Unless you
publicly      announce its contents earlier,         we plan no further
distribution        of this fact sheet until       30 days from the date
of this letter.          At that time, we will send copies to the
Administrator,        Environmental   Protection     Agency, and make
them available        to other interested     parties.     If you have any
questions,       please contact me on (202) 275-6111.           Major
     tributors      to this fact sheet are listed       in appendix II.
cY4


Richard'L.    Hembra
Director,    Environmental    Protection
   Issues




5
                            CONTENTS
                                                            Page
LETTER                                                        1
SECTION
      1    BACKGROUND                                         8

      2    STATE OFFICIALS' PERSPECTIVES
             REGARDINGCATEGORY-3AND -4
             OWNERS'ABILITY TO COMPLYWITH
             EPA'S FINANCIAL REQUIREMENTS                    10
               Status of Creation of Trust Funds             10
               Availability    of Private Tank Insurance     12
               Owners' Ability    to Comply With
                 Financial   Responsibility
                 Requirements by EPA Deadlines              15
               States Planning to Provide or Providing
                 Financial   Assistance to Tank Owners      18
               Willingness   of Lending Institutions   to
                 Make Loans to Owners to Upgrade Tanks      19
      3    EXTENT OF POLLUTION LIABILITY INSURANCE
             COVERAGEAND INSURANCECOMPANIES' VIEWS
             OF OWNERS'ABILITY TO COMPLYWITH EPA'S
             FINANCIAL REQUIREMENTS                         21
               Extent of Pollution   Liability
                  Insurers' Coverage                        21
               Insurance Companies' Risk Assessment
                  Factors and Insurance Costs               29
APPENDIX
      I    OBJECTIVES, SCOPE, AND METHODOLOGY               33
 II        MAJOR CONTRIBUTORSTO THIS FACT SHEET             35
TABLE
 2.1       Thirty-six  States With a Trust Fund and
             15 Without a Trust Fund, as of May 2, 1990     11
 2.2       Ability  of Category-3   Owners to Obtain
             Insurance                                      14
 2.3       Ability  of Category-4   Owners to Obtain
             Insurance                                      15



                              6
                                                               Pa-2
  2.4   Ability  of Category-3 Owners to Comply
          With Financial   Requirements by EPA's
          Deadline                                              16
  2.5   Ability  of Category-4 Owners to Comply
          With Financial   Requirements by EPA's
          Deadline                                              17
  2.6   Category-2    Owners' Compliance   With
          Financial    Requirements                             18
  2.7   Other Financial/Technical Assistance
          Planned or Offered by States                          19
  2.8   State Officials'    Views of Lending
           Institutions'   Willingness to Make Loans
          to Category-3    Owners for Upgrading Tanks           20
  2.9   State Officials'    Views of Lending
           Institutions'   Willingness to Make Loans
          to Category-4    Owners for Upgrading Tanks           20
  3.1   Insurance Companies Underwriting      Policies
           for Tank Owners                                      24
  3.2   Insurance Companies' Estimates of When
           Category-3 Owners Will Obtain Insurance              28
  3.3   Insurance Companies' Estimates of When
           Category-4 Owners Will Obtain Insurance              29
  3.4   Deductible  and Premium Range Estimates          for
          Underground Petroleum Storage Tank
          Policies  by Insured's Risk Level                     32
                      ABBREVIATIONS
AIG     American International     Group Insurance
          Company
EPA     Environmental   Protection   Agency
GAO     General Accounting Office




                            7
                                     SECTION 1
                                     BACKGROUND
       The Environmental        Protection    Agency (EPA) estimates that
nationwide     there are up to 2 million         underground petroleum storage
tanks at three-quarters          of a million    facilities,       such as gas
stations,     utility     companies, or car dealerships.            According to EPA,
hundreds of thousands of these tanks have corroded and are leaking.
Leaks from these tanks can contaminate groundwater--a                    source of
drinking     water for half of our nation--and              can cause fires or
explosions.         To guard against such risks,          the 1984 Hazardous and
Solid Waste Amendments to the Resource Conservation                    and Recovery
Act required        EPA to develop regulations        to prevent,      detect,  and
correct    leaks from tanks.         EPA published      final tank safety
regulations       in the Federal Resister on September 23, 1988. The
regulations       require tank owners to use certain methods to detect
leaks, beginning at specified            dates in 1989 through 1993, depending
on the age of the tanks.            Owners have until        1998 to meet other
requirements        for preventing    leaks,   such   as    having  tank corrosion
protection.1
      EPA also published      financial     responsibility      regulations       on
October 26, 1988, requiring        owners of underground petroleum tanks,
with some exceptions,       to demonstrate the financial           ability     to pay
$1 million    or $2 million,     per occurrence,       depending on the number
of tanks they own, to clean up leaks and compensate victims.                       In
the regulations,    EPA grouped firms into four categories                 and phased
in the financial    responsibility       requirements      over fiscal       years 1989
and 1991. Firms in categories           1 and 2--large      to medium-sized firms
generally    owning 100 or more tanks --had to comply by January and
October 1989, respectively.          Category 3 includes owners of 13 to 99
tanks, and category 4 is made up of owners of 1 to 12 tanks and
most non-marketers.2       Under the original        regulations     these owners
had until   April and October 1990 to comply.              However, on March 14,
1990, EPA announced that it would amend the regulations                    to extend



lThe requirements    can be satisfied  by either the owners or
operators   of the tanks.   For convenience,    we refer only to tank
owners in this fact sheet.
2Non-marketers    are owners who do not market petroleum products                and,
in category 4, who have a net worth of less than $20 million.                    Non-
marketers having a net worth of more than $20 million       are
classified   as category-l  owners.  Non-marketers   include such
entities   as local governments, auto dealerships,     and hospitals.



                                         8
by 1 year the compliance deadlines    for categories    3 and 4,3 and on
April 25, 1990, the EPA Administrator     signed an interim rule to
formalize the extension for category-3      firms.   According to an EPA
official, the interim rule for category-4       firms is undergoing
review and will be signed by the end of June 1990.
         Owners can show financial          responsibility      by obtaining        one or a
combination       of the following:         (1) self-insurance;           (2) pollution
liability      insurance;       (3) guarantees,    surety bonds, or letters              of
credit ensuring their ability             to pay; (4) coverage under state-
required mechanisms or state trust funds approved by EPA for this
purpose: or (5) an owner-established               trust fund.         Large firms can
generally      meet the requirements         through self-insurance,           but for
smaller firms the only feasible              methods for demonstrating
financial      responsibility       are to purchase insurance or obtain
coverage under a state trust fund.                Methods other than private
insurance or state trust funds (1) are expensive for smaller firms,
 (2) do not transfer          risk, or (3) require that more assets be
pledged than the average owner typically                   can afford.       Owners can
use coverage under a state trust fund to demonstrate financial
responsibility       only if EPA has approved the fund.                  If the plan
submitted to EPA shows that the fund meets the requirements,                           the
agency classifies         the fund as formally         approved.       If the state has
submitted a fund plan and EPA has yet to review it, EPA classifies
the fund as conditionally            approved.
        In January 1988 we reported that uncertainty       about potential
losses had kept insurance companies out of the underground tank
market.4     In the 3 years prior to our report,       two sources provided
virtually    all of the tank insurance sold in the United States, and
midway through 1987, one of them had withdrawn from the market.
The two firms had insured about 14 percent of U.S. tanks, mostly
those owned by firms in the retail        motor fuels sector such as
independent gasoline stations.        At the time of this review,
relatively     few states had established    trust funds to clean up leaks
from tanks, although we said that these funds might be the only
hope for small firms to establish       financial   responsibility.




3GA0 had suggested this action in testimony on Feb. 20, 1990,
before the Subcommittee on Environmental   Protection, Senate
Committee on Environment and Public Works, Underground Petroleum
Storage Tank Owners' Abilitv  to Complv With Federal Financial
Responsibility  Requirements (GAO/T-RCED-90-29).

4Superfund:  Insuring         Undersround       Petroleum   Tanks (GAO/RCED-88-39,
Jan. 15, 1988).

                                            9
                                  SECTION 2
                $TAl'E OFFICXALS' PERSPECTIVESREGARDING
           CATEGORY-3  AND -4 OWNERS'ABILITY TO COMPLYWITB
                      EPA'S FINANCIAL REOUIREMENTS
        We conducted a telephone survey of state underground storage
tank program officials         in all 50 states and the District      of
Columbia to obtain their perspectives           regarding the ability    of
category-3     and -4 firms to obtain insurance by the 1990 deadlines
or comply with the requirements         through state trust funds.
Additionally,      we asked officials     if their states have any plans to
offer financial       assistance   to owners to help them comply with the
requirements      and how lending institutions       in their states deal with
owners seeking loans to upgrade tanks.            This section summarizes the
views of the 46 state program officials           we were able to contact.1
We did not verify       the accuracy of the information       the state
officials     provided to us.
STATUS OF CREATION OF TRUST FUNDS
       According to EPA, as of May 2, 1990, 36 states had created
trust funds and 15 states had not.         Of the 36 states that had
created funds, EPA had formally       approved 11 fund plans and
conditionally    approved 12, and 13 states had not yet submitted
their fund plans to EPA for approval.         Table 2.1 shows which
states had created trust funds and which had not, indicates           which
states had trust funds that EPA had formally        and conditionally
approved, and identifies    which states had not submitted fund plans
to EPA for approval.     In addition,    the table notes changes to the
status of state fund plans that have occurred since we conducted
our survey.




lThe group of state program officials      includes    an official   from the
District  of Columbia government.     In this fact     sheet, references    to
states include the District  of Columbia.
                                    10
    .
,



                                         Table 2.1
                          utv-six     States With a Trust Fund
                               and 15 Without a Trust Fund,
                                    as of Mav 2. 1990
                              States with        a trust fund (36)
           an submitted     to EPA (23)              p 1an no t submitted         to EPA (131
                            Conditionally
        ZWrovec;l           m~rov@cT
        Alabamaa           ArkansasC                  California
        Georgia            Connecticut                Coloradod
        Illinoisb          Florida                    Idahoe
        Iowa               Kansas                     Indianae
        Louisianab         Nebraska                   Missouri
        Michiganb          North Dakota               Nevada
        Minnesotab         Ohio                       New Hampshired
        Mississippi        Oklahoma                   New Mexico
        Montanab           South Carolina             Pennsylvania
        North              Tennessee                  South Dakota
            Carolinab      Texas                      Virginiaa
        Vermontb           UtahC                      Wisconsind
                                                      Wyoming
                            States     without     a trust     fund     (15)
        Alaska             Kentucky                   Oregon
        Arizona            Maine                      Rhode Island
        Delaware           Marylanda                  Washington
        District   of      Massachusettsa             West Virginia
           Columbia        New Jerseya
        Hawaii             New York
        aWe were unable      to administer         our telephone         survey     to this
        state.
        bAfter we conducted our survey,                this   state     had its     trust     fund
        plan formally approved by EPA.
        CAfter we conducted our survey,                this   state     submitted       its   fund
        plan to EPA for approval.
        dAlthough an EPA report indicated   that this state had submitted
        a fund plan to EPA, according to EPA regional    officials, this
        state has not officially  submitted a trust fund plan to EPA.
        eAfter we conducted          our survey,       this   state's     legislature         created
        a trust fund.




                                                 11
        At the time of our telephone survey, conducted between
February 12, 1990, and March 2, 1990, we interviewed     officials
from 23 states that had submitted plans to EPA for approval,       9
states that had not submitted plans, and 14 states that had no
state trust funds; we were not able to administer     our survey to
officials     in 5 states.
         We were able to contact 9 of the 10 states that had created
trust funds but not submitted fund plans for EPA approval.
Officials     of seven of these nine states said that they intend to
submit their state trust fund plans to EPA for approval.              One
official     said that the state might submit its plan to EPA,
depending on the fund's ability        to meet financial    assurance
requirements      in the state.    The other state official    indicated,
however, that the state will not be able to operate a trust fund
unless additional       state funds become available.
       Of the 17 states without trust funds, we were able to contact
14. Of these 14 states,        9 had plans to establish     funds.   Six of
these nine states indicated       that their proposed funds were under
legislative     review.   Of the five states that did not have plans to
establish    trust funds meeting EPA's requirements,        four indicated
that their states have other forms of assistance          for tank owners.2
One state official      we spoke with indicated   that officials     in the
state disagree with the idea of establishing         a trust fund to help
owners meet EPA's financial       responsibility  requirements:     he
suggested that the federal government should fund such an effort
because the federal requirements        place an added economic burden on
small business owners in the state.
AVAILABILITY   OF PRIVATE TANK INSURANCE
       Most state program officials     indicated    that insurance is
available,   that is, is being offered for sale, to category-3            and -4
owners.    At the time of our review, seven officials         said that
insurance is unavailable   or virtually      unavailable    to category-3
and/or -4 owners in their states.
        The Oregon and Vermont officials   reported that insurance is
virtually    unavailable  for sale to category-4   owners in their
states because insurance companies are not willing       to underwrite
policies    for these owners.   The Texas and Pennsylvania      state
officials    reported that insurance is virtually    unavailable      for sale

2When we interviewed      the Indiana state official,   he said that the
state was not planning to create a trust fund.         However, according
to an EPA regional     official,   the Indiana state legislature   passed
legislation   creating    a state trust fund, which the governor signed
on March II20, 1990.


                                     12
to category-3    and/or -4 owners in their states because insurance is
costly or some owners cannot afford to meet technical
requirements.     The Texas state official      indicated   that insurance is
virtually   unavailable     for sale to category-4     owners in the state,
as the one insurance company that offers selective            coverage charges
these owners a $45,000 premium. The Pennsylvania            state official
said that insurance premiums for category-3          owners have increased
about 140 percent over the past few years.           Regarding category-4
owners, the state official       said that these owners cannot afford to
 (1) meet technical     requirements  or (2) purchase private       tank
insurance.
       Only the Oklahoma, Tennessee, and Mississippi      officials       said
that no insurance companies offer pollution     liability      coverage to
tank owners in their states.    The Oklahoma state official           said that
he has found no insurance company willing    to underwrite         policies
for category-3   and -4 owners, including  non-marketers,        in the
state.
      The Tennessee state official     explained that only two companies
had offered  insurance in the state, the Petroleum Marketers Mutual
Insurance Company (Petromark) and the Federated Mutual Insurance
Company (Federated),    the nation's   two largest providers,   and they
are no longer doing SO.~ The Mississippi        official also cited
Federated's  withdrawal    as the reason for the unavailability     of tank
insurance in the state.
      While most state officials       said that private    tank insurance is
generally  available    and that insurance companies are underwriting
tank coverage, one-third       of the officials    who responded said that
more than half or most of the category-3          businesses would not have
been able to obtain insurance by the compliance deadline,             as shown
in table 2.2.     Seventy-four    percent of state program officials       who
responded said that more than half or most of the category-4
businesses would not have been able to obtain insurance by the
compliance deadline,     as reflected     in table 2.3.    These officials
frequently  cited as reasons the high cost of private           tank insurance
and owners' having old tanks that pose high risk.




30n April 10, 1990, Petromark announced that it was unable to raise
$18 million    in capital     to maintain operations,   as required by the
State of Tennessee.        Consequently,   Petromark dissolved    its Board of
Directors,   and Lloyds of London agreed to provide coverage to most
of Petromarkls      insureds.    Most recently,   on May 3, 1990, the State
of Tenne6See     placed Petromark into liquidation.


                                     13
                                                                   c
                                                                       I’




                                 Table 2.2
           ilitv   of Catectorv-3 Owners to Obtain   Insurancg
To what extent do you think category-3 businesses in your state
will be able to obtain insurance by the April 1990 deadline?
                               No. of state officials,
                                  bv trust fund status
                                          Fund plan
                            Fund plan             not
                            submitted     submitted
Response                       to EPA        to EPA
Most will                              3         2         4       9
More than half will                    3         2          1      6
About half will                        7         0          3    10
Fewer than half will                   3         3          3      9
Most will not                          2         1         2       5
Don't know                                       0          1      3
Not applicablea                                  1        A      4
Total                             23,          s.     l&L       4;6,
"State officials    responded that insurance is not available     to
category-3    owners in their states.   As a result, these officials
did not comment on this question.




                                  14
                                    Table 2.3

   To what extent do you think category-4 businesses in your state
   will be able to obtain insurance by the October 1990 deadline?
                                   No. of state officials,
                                      bv trust fund status
                                              Fund plan
                                Fund plan             not
                                submitted     submitted       No
   Response                        to EPA        to EPA    fund           Total
   Most will                                 2              1         1        4
   More than half will                       1              1         0        2
   About half will                           0              0         1        1
   Fewer than half will                      5              2         6      13
   Most will not                             8              3         4      15
   Don't know                                2              0         1        3
   Not applicablea                           5                        1        7
   No answer                             0                  i     0          1
   Total                                 ia                 2     u          4h
   aState officials    responded that insurance is not available     to
   category-4    owners in their states.   As a result, these officials
   did not comment on this question.
OWNERS'ABILITY TO COMPLYWITH FINANCIAL
RESPONSIBILITY REUUIREMENTSBY
  A DEADLINES
        As tables 2.4 and 2.5 show, nearly one-third           of the state
officials      said that more than half or most of the category-3             firms
would not have been able to comply with the financial
responsibility      requirements     by the April 1990 deadline,       and more
than two-thirds       of the officials      indicated  that more than half or
most of the category-4        firms would not have been able to comply
with the October 1990 deadline.             Officials  most frequently     cited
 (1) high trust fund deductibles           (for states with funds);      (2) costly
insurance;      (3) old, high-risk     tanks; and (4) technical       requirements
such as those necessitating          costly tank improvements as reasons for
these owners' inability         to comply.
       Tables 2.4 and 2.5 also show that officials       we contacted in
states with trust funds were not very optimistic         about category-3
and -4 owners' complying with the financial        responsibility
requirement     deadlines.  Officials    in 10 of 32 states,      or about 31
percent,    said that more than half of the category-3        firms would not
have been able to comply by April 1990. Also, officials              in 18 of
32 states,     or about 56 percent,   said that more than half of the

                                       15




                                                        ,
                                                                                     F




category-4    firms      would not have been able to comply by October
1990.
                                      Table 2.4
               Ability
                   9       * 1 ReauirementsOwners
                           of  Cateaorv-3         to Comnlv With
                                              bv EPA's Deadline
   How many category-3    firms in your state       will       comply with    the
   financial requirements     by April 1990?

                                     No. of state officials,
                                        by trust fund status
                                                Fund plan
                                  Fund plan             not
                                  submitted     submitted       No
   Resnonse                          to EPA        to EPA    fund           Total
   Most will                             12                1            4      17
   More than    half will                  1               1            2        4
   About half    will                      5               2            4      11
   Fewer than    half will                 3               3            3        9
   Most will    not                      2                 2        1          5
   Total                                 23,               e        14         46




                                       16
                                   Table 2.5
               Ability   of Cateaorv-4 Owners to Comnlv With
                 Financial  Reauirements bv EPA's Deadline
   How many category-4    firms in your state will          comply with     the
   financial requirements     by October 1990?
                                   No. of state officials,
                                      by trust fund status
                                              Fund plan
                                Fund plan             not
                                submitted     submitted       No
   JIesPonsa                       to EPA        to   EPA  fund           Total
   Most will                                7           0            1        8
   More than    half will                   3           1            0        4
   About half    will                       3           0            0        3
   Fewer than    half will                  5           2            9       16
   Most will    not                     5               5        4           15
   Total                                ia            B          A&-        i&
        We also asked state officials   if they believe category-2
firms --medium-sized    businesses with 100 to 999 tanks--in          their
states had complied with EPA's financial        responsibility
requirements.      As shown in table 2.6, the majority         of the
officials     said they believe that category-2     owners had complied.4




4We did not ask about compliance by category-l           owners because they
have assets enabling them to self-insure.


                                      17
                                    Table 2.6
                      Cateaorv-2  Owners' Comoliance        With
                             Financial Reauirements
    In your estimation, have category-2   firms            in your state
    complied with EPA's financial  responsibility             requirements?
                                      No. of state officials,
                                         bv trust fund status
                                                 Fund plan
                                   Fund plan             not
                                   submitted     submitted       No
    Reswnse                           to EPA        to EPA    fund         Total
    Yes                                    17               5        12        34
    No                                       0              1          0         1
    Don't know                               6              2         2        10
    No answer                              0                1        A         1
    Total                       ia
STATES PLANNING TO PROVIDE OR PROVIDING
FINANCIAL ASSISTANCE TO TANK OWNERS
       As shown in table 2.7, our discussions             with state officials
revealed that some states have established,                or plan to establish,
additional      mechanisms to assist tank owners in meeting financial
responsibilities        and/or technical    requirements.        Overall,   one-
third of the states we spoke with have plans to establish                   or have
established      such assistance programs.          The most common types of
assistance      being considered are direct         loans, loan guarantees,        and
interest     subsidies.      Specifically,   officials      in 9 of the 14 states
without trust funds, or about 64 percent,               said that their states
are planning to establish           or have already established        assistance
programs to help owners upgrade or replace tanks.                  Yet officials
in 26 of the 32 states with trust funds, or about 81 percent,                     said
that their states are not planning to establish                such financial
assistance      programs.




                                         18
                                  Table 2.7
                  Other Financial/Technical      Assistance

   Do you have other plans to offer assistance          to owners who have
   trouble meeting financial responsibilities          and/or technical
   requirements?
                                No. of state officials,
                                 by trust fund status
                                              Fund
                           Fund plan     plan not
                           submitted    submitted            No
   Pes~onse                   to EPA        to EPA        fund       Total
   Yes                              4             2             9       15
   No                              19             z           -5        31
   Total
WILLINGNESS OF LENDING INSTITUTIONS TO
  KE TDANS TO OWNERSTO UPGRADETANKS
        Tables 2.8 and 2.9 present respondents'         views regarding
lending institutions'       willingness    to provide loans to owners for
upgrading tanks so that they can become eligible              for insurance or
state fund coverage.        Most of the officials      who expressed an
opinion said that lending institutions           in their states are cautious
or reluctant     to make loans to both category-3         and -4 owners: the
officials     most frequently     cited lending institutions'      concerns
about liability      as the reason for the institutions'         hesitancy.




                                     19
               .            Table 2.8
 State Officials  I Views of Lendinq Institutions'  Willinaness
    to Make J,oans to Cateqorv-3 Owners for Ubgradina Tanks
How do lending institutions    in your state feel about making
loans to category-3    tank owners for upgrading tanks to become
eligible  for insurance?
                          No. of state officials,
                           by trust fund status
                                        Fund
                     Fund plan     plan not
                     submitted    submitted            No
Response                to EPA        to EPA        fund      Total
Cautious/reluctant               9         7              4       20
No problem                       4         1              3         8
Don't know                       7         1              6       14
No answer                    3             0          1           4
Total                       23_           e       u             A&
                           Table 2.9
 State Officials'  Views of Lendinq Institutions'   Willingness
    to Make Loans to Cateqory-4 Owners for UDqradinq Tanks
How do lending institutions    in your state feel about making
loans to category-4    tank owners for upgrading tanks to become
eligible  for insurance?
                          No. of state officials,
                           by trust fund status
                                        Fund
                     Fund plan     plan not
                     submitted    submitted            No
pesDonse                to EPA        to EPA        fund      Total
Cautious/reluctant           10            8              4       22
No problem                     2           0              2         4
Don't know                     8           1              6       15
No answer                    3             0          2           5
Total                        &L            2          J&i         A&




                                 20
                                     SECTION 3
         EXTENT OF POLLUTION LIABILITY INSURANCECOVERAGEAND
           INSURANCECOMPANIES' VIEWS OF OWNERS'ABILITY TO
               COMPLYWITH EPA'S FINANCIAL REOUIREMENTS
        We identified      11 insurance companies that offer full-coverage
pollution     liability      insurance to category-3      and -4 owners1 and 4
more companies that offer limited             pollution   liability       insurance to
these smaller firms.            We have not included information            on 1 of the
11 companies because it did not respond to our survey in time to be
included.       We asked the 10 companies that provide full coverage to
category-3      and -4 owners to estimate by what year these owners
could obtain private          tank insurance.       Subsequently,     we followed up
with seven of these companies to obtain specific                   additional
information,       including     minimum and/or average deductibles            and
premiums for owners with low, average, and high risk.
      This section presents information   about the companies'
coverage, their views on owners' ability    to obtain private
insurance,  as well as a summary of seven companies' minimum and/or
average deductibles   and premiums.   We did not verify    the accuracy
of the information  the insurance representatives     provided to us.
EXTENT OF POLLUTION LIABILITY
INSURERS' COVERAGE
        EPA's regulations    require that category-3   and -4 owners who
are petroleum marketers obtain insurance (or some other form of
coverage) to pay damages of $1 million        per occurrence and $1
million    annually    in the aggregate.  For non-marketers   handling a
monthly volume of 10,000 gallons or less of petroleum,         EPA
regulations     require coverage of $500,000 per occurrence and $1
million    of annual aggregate coverage.
      As table 3.1 reflects,    of the 14 companies surveyed, 10
companies provide full coverage to category-3            and -4 owners; that
is, the companies underwrite     pollution     liability    insurance policies
for corrective   action and third-party      liability     costs resulting
from leaks in underground petroleum storage tanks.              Seven of these
companies provide such coverage to non-marketers            as well.     Of the
10 providers   of full coverage, only 1, Petromark, provided coverage
in all 50 states plus the District        of Columbia and U.S. territories
(except Puerto Rico).     Also, Oilmen's Insurance Company has a per

lDuring the course of our survey of insurance company
representatives,     we learned that the James Group, Petromark, and
R.L. Jarrett     had temporarily  suspended their operations.  As noted
earlier,   after   our survey, Petromark ceased operations.


                                        21
occurrence limit  of $500,000 for category-3      and -4 owners, which
does not meet EPA's per occurrence limit      of $1 million.    This
company also provides pollution     liability  insurance but only to
purchasers of other policies    from this company.
        In addition  to the 10 full-coverage          providers,        four other
companies offer limited         coverage to category-3        and/or -4 firms,
including    non-marketers.       Universal Underwriters           provides full
coverage to category-4         owners and non-marketers         who hold other
policies    with this company. Evanston provides full coverage up to
$500,000 to non-marketers         only.    And, two other companies write
only third-party     liability     insurance.      Of these, Liberty Mutual
provides such coverage to category-3            and -4 owners, including             non-
marketers,     while Travelers provides third-party             liability       insurance
only to category-3      and -4 owners who have other policies                  with this
company. According to the representative               from Travelers,          the
company does not consider itself           a pollution     liability        insurer.
        Of all 14 insurance companies listed    on table 3.1, Petromark
was the only risk retention      group, an insurance company formed by
businesses with similar     risks to provide insurance coverage for
its members. Petromark's       membership fee was equal to the owners'
first-year    premium.
       Of the 10 full-coverage      insurers of category-3     and -4 owners,
3 insurers      issue more than 90 percent of the approximately        3,400
policies    issued by the 10 insurers.        The two largest providers,
Federated and Petromark, have issued the greatest            number of
policies    to category-3    and -4 tank owners, issuing 1,800 and 1,000
policies,     respectively.    As noted previously,     Petromark was
dissolved     and Lloyds of London now offers coverage to most of
Petromark's       insureds. Additionally,     Federated announced in
February 1990 that it would no longer provide coverage to owners in
14 states with trust funds.         A third insurer,    Environmental
Impairment,      has issued 320 policies    to these smaller firms.




                                          22
23
                                   Table 3.1
                 Jsn ur ance Companies Underwritina     Policies
                                for Tank Owners


                                 Full
Companies
       t                         coverage         Cateaorv         Non-
offexans  insurance              provided                          marketers
Agricultural Excess
and Surplus
Insurance Company                Yes              Yes     Yes          Yes
American International
Group (AIG)a                     Yes              Yes     Yes          Yes
Environmental
Impairment
Purchasing Group                 Yes              Yes     Yes          Yes
Evanston Insurance
Company                          Yes              No      No           Yes
Federated    Mutual
Insurance    Company             Yes              Yes     Yes            No
Front Royal
Group, Inc.                      Yes              Yes     Yes          Yes
General Star
Management Co.                   Yes              Yes     Yes            No
James Group
Service, Inc.e                   Yes              Yes     Yes          Yes
Liberty Mutual
Insurance Co.                    Nof              Yes     Yes          Yes
Oilmen's Insurance
Company, 1nc.g                   Yes              Yes     Yes            No
Petroleum Marketers
Mutual Insurance Co.
(Petromark)h                     Yes              Yes     Yes          Yes
R. L. Jarrettj                   Yes              Yes     Yes          Yes




                                       24
                    .                        Number of auotes aiven
Number
   Cateaorv             Non-                 Catesorv        Non-
3                       parketers           3         4      marketers


   1            1              0             30         25                     0

   b          200            200         1,000s    1,000s             1,000s


 200          120             45            700     1,000                 200

  NAC         NA               0             NA         NA                    25

   d           d              NA              b             b                 NA

   0            0              0              1             2                 b

   0      cl0                 NA              0         10                    NA
                                          100s
   0            0              0         daily    several           several

   b           b               b              b             b                 b

  30          20              NA             60         40                    NA


800       200                 10         2,400              i                 i

   0           0               0             20             5                 5

                                                                (continued)
   Y

                                    25
                                 Full                       Owners covered
Companies                        coverage                Cateoorv   Non-
offerins  insurance              provided                3      %-  mrketers
Travelers
Insurance    Co.9                Nof                     Yes     Yes           No
Universal
Underwriters
Insurance Co.9                   Yes                     No      Yes          Yes
aAIG uses Sedgwick James, formerly Fred S. James of Pennsylvania,  as
its insurance broker and National Union Fire Insurance Company as
its insurance carrier.  The data include all policies  written  by
AIG's insurance carrier and those issued by Sedgwick James.
bInsurer    did not know the answer or was not willing                 to estimate.
CNot applicable   because insurer does not cover owners of this
category.    Subsequent uses of llNAW1in this table indicate the same.
dThe number of policies     issued      totals    1,800 for     category-3     and -4
owners.
eAccording to the James Group Service, Inc. representative,     on
March 19, 1990, the company changed its name to Sedgwick James
Group Service,    Inc.   Also, on March 25, 1990, the company suspended
its provision   of pollution   liability insurance because one of its
underwriters   closed.
fCompany only provides    third-party        liability     insurance.
gcompany only provides    tank insurance          to existing     clients.
hDue to financial difficulties, on April 10, 1990, Petromark
announced that it had dissolved its Board of Directors  and that
Lloyds of London would provide coverage to most of Petromark's
insureds.
iThe number of quotes given totals           300 for     category-4      owners and
non-marketers.
jIn our discussion with the R.L. Jarrett  representative,  we learned
that the company had temporarily suspended its operations.
      Y


                                        26
Number of Dolicies    issued        Number of quotes aiven
  CateGorv         Non-             Cateaorv        Non-
 3                 marketers        3        4      marketers

  b         b           NA          few      few          NA


 NA         0            3            b        b           b




                               27
      Tables 3.2 and 3.3 present the views of full-coverage       insurers
on the pollution    liability   insurance market, specifically,   their
views on category-3      and -4 tank owners' ability to obtain
insurance.
      As table 3.2 reflects,   three firms believe that 75 percent of
category-3   owners can obtain insurance coverage now, and three said
that this percentage of category-4      owners won't be able to obtain
coverage for several years.      Four firms, including   the two largest
insurers,   could not estimate when three-quarters     of the category-3
owners will be able to be insured.
                                    Table 3.2
                  Insurance     Companies' Estimates of When
                  Catesorv-3    Owners Will Obtain Insurance
Given your knowledge      of the insurance market, by what year will 75
percent of category-3      owners be able to obtain coverage to meet
EPA's requirements?
                                                       Year owners can
Company and their     responses                        obtain coveraue
Those statinci    the current     year or earlier
Environmental     Impairment
Front Royal
General Star
Those statins     a vear in the future
Agricultural     Excess                                           1995
James Group                                                       1993
Oilmen's                                                          1995
Note:    Four companies, AIG, Federated, Petromark, and R.L.
Jarrett,   could not estimate when the owners will be able to
obtain coverage.
       As table 3.3 shows, two firms believe that 75 percent of
category-4     owners are able to obtain coverage now, and four firms
believe that most category-4      owners will not be able to obtain
private    tank insurance until   sometime in 1991 to 1995. Two of the
largest    insurers  could not estimate when three-quarters  of the
category-4     owners will be able to have insurance.




                                        28
                                   Table 3.3
                 Jnsurance     Comnanies' Estimates of When
                 Catesorv-4    Owners Will Obtain Insurance
Given your knowledge     of the insurance market, by what year will 75
percent of category-4     owners be able to obtain coverage to meet
EPA's requirements?
                                                                Year owners can
Company and their    resnonses                                  obtain coveraqe
Those statina    the current     year or earlier
Environmental    Impairment
General Star
Those statina    a Year in the future
Agricultural    Excess                                                      1995
Front Royal                                                                 1991
James Group                                                                 1993
Oilmen's                                                                    1995
Note:    Four companies, AIG, Federated,           Petromark,    and R.L.
Jarrett,   could not provide an estimate.
LNSURANCECOMPANIES' RISK
ASSESSMENTFACTORSAND
INSURANCECOSTS
       To (1) determine what factors insurance companies use to
assess an applicant's     risk level and (2) obtain estimates of the
minimum and average deductibles       and premiums that approximately
correspond to each level of risk (low, average, and high), we
followed up with the companies that offer full coverage to
category-3    and -4 owners.     We were unable to reach 2 of the 10
companies, including     Federated, one of the largest     insurers.    One
company, R.L. Jarrett,      was temporarily   closed at the time of our
review.     Because R.L. Jarrett    may not renew or issue policies     in
the future,    we did not obtain this company's responses.         Thus we
include responses to follow-up       questions for seven companies. 5 The
seven company representatives       we spoke with stressed the
variability    of owners' risk levels and premium rates from policy to
policy and thus cautioned us about the use of the estimates they
provided.



2The seven insurance     providers are AIG, Environmental   Impairment,
Front Royal,
         "    General    Star, James Group, Oilmen's,   and Petromark.


                                       29
      Concerning the first      issue, we asked insurance company
representatives     what factors they consider in assessing an owner's
risk level in order to determine a deductible        and/or premium.
Typically,    insurance company representatives     responded that they
assess each owner's application        to arrive at an individualized
insurance rate.      They said that a combination    of factors such as
tank construction,      and, in some cases, the age of the tanks coupled
with the quality     of tank management practices     leads to the
determination     of the owner's risk level and accompanying insurance
rate.
      According to the six insurance company representatives             who
responded to our follow-up      questions about risk factors        (the
seventh company official,     from James Group Service, Inc., did not
answer these follow-up    questions),     owners with low risk tend to
have fiberglass   or cathodically     protected3  steel tanks or double-
walled fiberglass   tanks that are less than 10 or 12 years old.
Owners with average risk tend to have similarly          constructed     tanks
that are 10 to 15 years old.       According to six company
representatives,   owners with high risk would typically          have bare
steel tanks older than 10 to 12 years old.          Of these six, three
said that bare steel tanks of any age would be a sufficient              reason
to consider the owner to be of high risk.
        Table 3.4 presents the range of responses we received to
questions about minimum and average deductibles            and premiums for
pollution    liability   insurance policies     for underground petroleum
storage tank owners.        Generally,    it appears that insurance
companies do not vary minimum deductibles           and minimum policy
premiums with owners' risk.          Of the seven insurance companies that
provided us with information         on their minimum deductibles,
Petromark was the only company whose minimum deductibles             vary by
risk group.       Of the seven companies responding to our follow-up
questions,     one company did not provide estimates for either average
site or average tank premiums, three companies provided estimates
for average site premiums only, and the other three companies
provided estimates for average tank premiums only.             While minimum
deductibles,      minimum policy premiums, and average deductibles
generally    do not vary by owners' risk levels,        the average site and
tank premiums increase with risk.
     Finally,  when asked if premiums would decrease if EPA would
lower its coverage limits,   three of the seven companies said llyes,V1
and four said Vtno.81 Four of the seven representatives  stated that
most of the risk falls below $500,000, with one company

3Such a practice     protects     tanks from corrosion      caused by a
naturally  occurring     electric     current by instituting     techniques   that
reverse the direction       of the current.


                                       30
representative   explaining that the risk is greatest       in the first
$100,000 of coverage and next most substantial    in    the next $250,000
of coverage.    Based on the responses from company     representatives,
it appears that EPA would have to lower its limits        to below
$500,000 or even to $350,000 or less in order for       companies to
lower insureds'   premiums.




                                 31
                                      Table 3.4
  Deductible       and Premium Range Estimates      for            Underground Petroleum
                 Storage Tank Policies     by Insured's             Risk Level
Dollars       in Thousandsa
                                      Category-3   and -4 owners'
                          deductibles      and nremiums. bv risk             levelb
                                     Low          Average                        High
Minimum
Deductible                    $0 to $25            $0 to $25           $0 to $25
Minimum
Policy
Premium                  $1.3c     to $5        $1.3c     to $5      $1.3c     to $5
Average
Deductibled               $10 to $25             $10 to $25           $10 to $25
Average
Site
Premiume
   Category      3     $1.6      to $6.4       $2.5     to $8.6      $3.2     to $19
   Category      4     $2.1      to $6.4       $2.4     to $8.6      $3.2     to $19
Average
Tank
Premiume                $.8      to $1.2                   S1.3f                $1.6
aFigures      are    rounded.
bOne respondent    places insureds    into                one of two risk groups,       either
good or high risk.      We have included                  the company's good risk
responses  in the low risk column.
CThe minimum policy     premium             of $1,300 can be discounted
depending  on a state's     trust            fund coverage.
dFour     companies     provided      an estimate.
eThree     companies      provided      an estimate.
fOnly     one company provided             an estimate.




                                                32
APPENDIX I                                                                 APPENDIX I

                      OBJECTIVES, SCOPE, AND METHODOLOGY
       We conducted two telephone surveys between February 12 and
March 28, 1990, to obtain the views of state underground storage
tank program officials          and insurance company representatives             (from
companies that offer pollution            liability       insurance coverage)
regarding   the ability        of category-3       and -4 tank owners to meet
EPA's financial    responsibility         requirements        by the 1990 deadlines.
On February 26, 1990, the Subcommittee staff requested that we ask
insurance companies a few follow-up                questions about the minimum
deductibles    and premiums for owners at different                 risk levels,   which
are determined by such factors as the construction                     and age of
tanks.    As a result,      we followed up with insurance companies that
provide pollution      liability      insurance to category-3           and -4 owners.
       In conducting   our telephone survey of state program               officials,
we telephoned officials      in all 50 states and the District               of
Columbia.    We obtained information     from officials   in 45           states and
the District    of Columbia.    The remaining five officials              were
unavailable   or did not return our phone calls during the                 time of
our survey.
       At the beginning of our review, we identified                  15 insurance
companies that were offering        pollution       liability      insurance to
underground storage tank owners in category 3 and/or 4, including
non-marketers.      Of these 15 companies, 11 provide full coverage to
category-3   and -4 owners (i.e.,        they will pay to clean up leaks
from tanks and will compensate victims              for damage to property         or
personal damages caused by leaks) and 4 provide limited                     coverage to
these firms.      In the fact sheet, we have excluded information                  on 1
of the 11 full-coverage       providers     because it did not respond to our
survey in time to be included in the survey tabulations.                       To
address the Subcommittee staff's           additional        request, we followed up
with the 10 insurance companies that provide full coverage to
category-3   and -4 owners, and were only able to obtain specific
additional   information    from 7 of the 10. Of these seven companies,
only six responded to our follow-up            questions about risk factors
used to determine an insured's         risk level and accompanying
insurance rate.      We did not verify       if the coverage provided by
these companies meets EPA's financial             responsibility        requirements.
       Our telephone survey of state officials          included questions
regarding      the availability      of private tank insurance,     the ability
of owners to obtain insurance and comply with the financial
responsibility        requirements    by the 1990 compliance dates, state
financial      assistance     programs, lending practices     for tank owners,
and the status of the trust fund plans in states that have trust
funds but have not submitted fund plans to EPA and in states that
do not have trust funds.


                                         33
        The topics of the telephone survey of insurance company
representatives     included the types and extent of insurance
coverage, deductibles       and premiums based on the insureds'     risk
levels,    and insurers'    views on the availability    of tank insurance.
We did not verify      the information   provided to us by either the
state officials     or the insurers'    representatives.
     As agreed with the requesters,       we did not obtain    official
agency comments on this fact sheet.




                                    34
APPENDIX II                                             APPENDIX II
                    OR CONTRIBUTORSTO THIS FACT SHEET
 SOURCES. COMMUNITY.AND ECONOMICDEVELOPMENTDIVISION,
WASHINGTON,D.C!<
Peter F. Guerrero, Associate Director
Lawrence J. Dyckman, Assistant     Director
James F. Donaghy, Project Manager
Maria Sanchez-O'Brien,  Evaluator-in-Charge
Lisa J. Lutz, Evaluator
Patton L. Stephens, Evaluator
Amy Mathews Amos, Evaluator




(160032)



                                   35
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