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Marsh & McLennan, incorporated11 South 10th St., P. O. Box 1857Richmond, Virginia 23215Telephone 804 649-4100Telex 827317October 2, 1980

Mr. Ira DinitzIndemnity SpecialistAnti-Trust and Indemnity GroupNuclear Reactor RegulationsU. S. Nuclear Regulatory Comm.

1Washington, D. C., 20555 )

RE: Virginia Electric & Power Company ]

Dear Mr. Dinitz:l

Enclosed you will find ten (10) copies of Binder I

* No . XB 70.

Trusting you will find these in order, I remain,

ou s ve y t c ly,% )*

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W LLarry ving.

Vice Prd '. ent ,

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CC: Mr. Stewart Foulke,Manager, Insurance Dept.Vepco

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INCI UDING.

BINDER NO. XB- 70.-

DECLARATIONS AND

BOND FOR PAYMENT OF RETROSPECTIVE PREMIUMS

BINDER

The members of Mutual Atomic Energy Liability Underwriters", hereinafter calledthe " companies", subscribing this binder, each for itself, severally and not jointly,and in the respective proportions set forth herein, and the insureds named in Item 1of the Declarations below, agree as follows:

A. The companies hereby bind insurance to the insureds nanted in Item 1 of theDeclarations in accordance with the provisions of the Draft Master Policy. 1

All rights and obligations of the parties to this binder are set forth in theprovisions of the Draft Master Policy. as it may be amended from time totime pursuant to its conditions or paragraph B below.

B. The term " Draft Master Policy" means the draft of the MASTER POLICY --

NUCLEAR ENERGY LIABILITY POLICY (SECONDARY FINANCIAL' PROTECTION)dated June 24, 1977 in the custody of the Nuclear Regulatory Commission, acopy of which is attached hereto, and includes all binders issued by the companiesin connection with such Draft Master Policy. The Master Policy, as subsequentlyissued by the companies, shall cancel and replace this binder and the DraftMaster Policy effective as of the time and date of the inception of the binder period.

C. Such insurance as is provided by the Draft Master Policy applies, through thisbinder, only:

(1) to the insureds identified in Items 1 and 2 of the Declarations below,

(2) to bodily injury or property damage

(a) with respect to which the primary financial protection describedin Item 4 below would apply but for exhaustion of its limit of .

liability and

(b) which is caused during the binder period stated in Item 8 belowby the radioactive, toxic, explosive or other hazardous propertiesof nuclear material and

(c) which is discovered and for which written claim is made against

the insured not later than ten years after. the end of such binderperiod; provided, however, that with respect to bodily injury orproperty damage caused by an extraordinary nucleat- occurtencethis subparagraph (C) shall not operate to bar coverage for bodilyinjury or property damage which is discovered and for which written*

claim is made against the insured not later than twenty years afterthe date of extraordinary nuclear occurrence.

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DECLA"AT2ONS*.

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~ Item 1. . Named insureds and addresses:.

(a) Virginia Electric and Power Company - P. O. Box 26666, Richmond, VA 23261

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Item 2. Additional Insureds: 1

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Any other person or organization who would be covered under primaryfinancial protection decscribed in Item 4 of this binder but for exhaustionof the limit of liability of such primary financial protection.

Itera 3. Description and location of the nuclear reactor: Unit 2 of the North AnnaPower Station located in Louisa County, Virginia

Item 4. Identification of primary financial protection applicable to the nuclearreactor and limit of liability thereof:

' Nuclear Energy Liability Insurance Association Policy NF- 240 $124,000,000Mutual Atomic Energy Liability Underwriters Policy MF- 96. $ 36,000,000

Do other nuclear reactors share the limit of liability provided under theprimary financial protection? Yes

Item 5. Maximum retrospective premium (exclusive of allowance for premium taxes)payable to the companies under the Draft Master Policy with respect to eachnuclear incident: '$1,125,000.

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Item 6.s - Portion cf the annual premium payable for the companies' contingent liabilitydescribed in Condition 4 of th- Draft Master Policy from tir effective date-

; hereof to the end of calendar var 1978: The pro rata portion of $1,350.00for the period from the effective date of this binder to the end of the calendaryear during which such effective date occurs.

Item 7. Limits of Liability: See Item 3 of the Declarations of the Draft Master Policy.

Item 8. Binder period: Beginning at the same time and date that the FacilityOperating License issued by the United States Nuclear Regulatory Commissionfor the reactor described in Item 3 of this binder becomes effective andcontinuing to the effective date and time of cancelation or termination ofthe Draf t Master Policy or this binder, whichever first occurs, easternstandard time. .

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BOND FOR PAYMENT, OF RETROSPECTIVE PREMIUMS

Know all Men By These Presents, that the undersigned do hereby acknowledge that theyare named insureds under the Draft Mtster Policy described in the above Binder andDeclarations . The named insureds do hereby covenant with and are held and arefirmly bound to the subscribing members of Mutual Atomic Energy Liability Underwriters(hereinafter called the " companies") to pay to the companies all retrospectivepremiums and allowances for premium taxes which shall become due and payable inaccordance with the terms of the Draft Master Policy with interest on such premiumsand allowances for taxes to be computed at the rate provided in the Draft Master Policyfrom the date payment thereof is specified to be due the companies in a writtennotice to the named insured, as provided in Condition 1 of the Draft Master Policy untilpaid.

Anci it is hereby expressly agreed that copies of written notices of retrospectivepremiums and allowances for premium taxes due and payable or other evidence ofsuch amounts due and payable sworn to by a duly authorized representative of thecompanies shall be prima facie evidence of the fact and extent of the liability of thenamed insureds for such amounts.

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And it is further expressly agreed that the named insureds will indemnify thecompanies' against any and all liability, losses and expenses of whatsoever kindor nature (including but not limited to interest, court costs and counsel fees) .

which the companies may sustain or incur (1) by reason of the failure of thenamed insureds to comply with the covenants and provisions of this Bond or (2)in enforcing any of the covenants or provisions of this Bond, or any provisionsof the Draft Master Policy relating to such covenants or provisions.

For the purpose of recording this agreement, a photocopy acknowledged before aNotary Public to be a true copy hereof shall be regarded as an original.

THE ABOVE BINDER, DECLARATIONS AND BOND FORM A PART OF THE DRAFTMASTER POLICY. CANCELATION OR TERMINATION OF THE DRAFT MASTER POLICY ORTHE BINDER SHALL NOT AFFECT THE OBLIGATIONS OF THE NAMED INSUREDS |

' IUNDER THE ' DRAFT MASTER POLICY OR THE BOND TO PAY THE RETROSPECITVEPREMIUMS AND ALLOWANCES ,FOR PREMIUM TAXES WITH RESPECT TO ANY BODILYINJURY OR PROPERTY DAMAGE WHICH IS CAUSED DURING THE BINDER PERIOD.

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- Itf WITh1SS WHEREOF, the named insuredr have caused 'this Binder, these Declarationsend this Bond fcr Payment of Betrospective E'remiums, to be signed and scaled bya duly autBori::ed officer, to be effective a" of the time and date of the inceptionof the binder period.

Attest or Witness Named Insureds:*

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Vircinia Electric and Power Comoany(Named Insured - Type or Print) a,

k,f}A1h am By /) - /d$4s <v ECSEAL)s' ' ) (Signature o Tlicer)

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(Type or Print Name & Title of Officer)'

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Date:

(Named Insured - Type or Print)

By (SEAL)(Signature of Officer)

(Type or Print Name & Title of Officer),

Date:

(Named Insured - Type or Print)

By (SEAL)(Signature of Officer)

(Type or Print Name & Title of Officer)

Date:

(Named Insured - Type or Print)

By (SEAL)(Signature of Officer)

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~ (Type or Print Name & Title of Officer)..

Date:2.

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IN WITNESS WHEREOF, the subscribing comnanies have caused the Binder and theDeclarations to be signed on their behalf by the Manager of Mutual Atomic EnergyLiability Underwriters, to be effective as of the time and date of the inception of thebinder pe'riod, and countersigned below by a duly authorized representative.

Attest or Witness For the Subscribing Companies ofMutual Atomic Energy LiabilityUnderwriters

' By t' fb

~A,1M[dCountersigned by(Authorized 1%presentativeL_. -

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Subscribing Companies PROPORTION OF 100%

American Mutual Liability Insurance Company, Wakefield, MA 15.0000000

Employers Insurance of Wausau A Mutual Company, Wausau, WI 15.0000000

Liberty Mutual Insurance Company, Boston, MA 30.0000000

Lumbermens , Mutual Casualty Company, Long Grove, IL 30.0000000

Michigan Mutual Insurance Company, Detroit, MI 5.0000000

Sentry Insurance, A Mutual Company, Stevens Point, WI 5.0000000

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This is to certify that this is a true copy of the original Binder, bearing the

numbe ; elesignated hereon, for insurance coverage under the DRAFT MASTER POLICY -'

NUCLLAR ENERGY LIABILITY POLICY (Secondary Financial Protection) dated -

June 24,1977. No insurance is afforded by this copy.

?^:: Y<e .

Mutual Atomic Energy Liability Underwriters

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Nucica r Energ. Liability Insurance,

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M UTUA L ATOMIC . ENERGY LIA DILITY IJNDERWl(ITEllS.

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SPECIFICATION OF 151NDEll EFFECTIVE DATE AND1211EMIUM ENDOllSEMENT

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It is agreert that:

1. The United States Nuclear llegulatory Commis.sio- has issued to -

the insureds named'in item 1 of the Declas ations C scratingLicens e No. NP F'-7 effective A pril 11, 1980

for the reactor described in llem 3 of the Declarations of the5 '; hinde r,

2. [ ten. 6 of the Declarations of the hinder is deleted and replaced-,

by the following:

Item 6. Poi tion of the annual premium payable for thecompanics' contingent liability described inCondition 4 of the Draft Mastei- Policy f romthe effective date hereof to the end of calenda ryea r 1980 : $ 980.10,

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3. Iten..H of the Declarations of the hinder is deleted and replaced i; by the_ following:

Item 8. Ilinder period: Beginning _ A pril 11 1980 ,

anel continuing to the cifective date and time,

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of cancelation or LerminaLion of the DraftIMaster l'olicy or this binder, whichever first

occ u rs , castern standard time.

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Effective Dale ofthi s Endu r *.cm en L ' A Pril 11, 1980 To form pa rt of Binder No. XD- 70 '

14:01 A. M. Standard Time 1

issued to Virginia Electric and Power Company '4

Da t e of ! s s u e__ September 23, 1980 For the subsc ribing c'o npanies )'

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ManagerEndorsement No. I

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This is to certify that this is a true copy of the original endorsement, bearing thenumber designated hereon, for insurance coverage under the DRAFT MASTER POLICY-NUCLEAR ENERGY LIABILITY POLICY (Secondary Financial Protection). No insuranceis afforded by this copy.

Mutual Atomic Er ergy Liability Underwriters.

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