Certificates of Financial Responsibility Purpose COFR Process Application – Inland Facilities Evidence of Financial Responsibility Resources

Certificates of Financial Responsibility To insure facility owners/operators have adequate financial resources to pay clean-up and damage cost arising from an oil spill.

COFR Process Submit Application to Office of Spill Prevention and Response (OSPR) by Jan 1, OSPR reviews application > informs applicant of the amount of financial responsibility they need to demonstrate (30 days). – The product of the reasonable worst case spill volume (RWCSV) in barrels multiplied (x) $10,000. Evidence of financial responsibility (FR) must be submitted within twenty-one (21) calendar days from the date applicant receives notice of the amount of financial responsibility.

COFR Process If the information in the application, evidence of financial responsibility is insufficient, OSPR shall notify the applicant of the nature of the insufficiency within twenty-one (21) calendar days from date of receipt. Applicants then have ten (10) business days to provide missing or additional information. Note: Administrator may waive twenty-one (21) day period for submitting evidence of financial responsibility.

COFR Process Certificate(s) will be issued within ten (10) business days following receipt of acceptable evidence of financial responsibility by the OSPR. If no evidence of FR is submitted following issuance of the notice of financial responsibility or if the response to a notice of insufficiency is inadequate, the administrator may deny the application by providing written notice specifying the reasons for the denial following the twenty-one (21) day or ten (10) day submittal period.

COFR Process Types of Evidence of Financial Responsibility Insurance (70%) Self-Insurance (30%) Surety Bond Letter of Credit Guaranty

Application – Inland Facilities General Information – Page 1 Legal Name Trade/DBA Name Financial Contact

Application – Inland Facilities General Information – Page 2 Subsidiary? Certificate Recipient Agent for Service of Process Lessor?

Application – Inland Facilities Section B – Page 3 Type of Facility Name of Facility Location of Facility RWCSV

Application – Inland Facilities Section C – Page 4 Pipelines Production and Other Facilities

Application – Inland Facilities Section D – Page 5 Declaration Section E – Page 5 Delegation of Authority

Application – Inland Facilities Instructions – Page 6 Mail or

Application – Inland Facilities Multiple Facilities Section B. List Facility Name, location, description and RWCSV for each facility.

Application – Inland Facilities Multiple Facilities Section C. Attach spreadsheet to provide production information (a.) and (b.) for additional facilities.

Application – Inland Facilities Multiple Facilities Section C. Put the largest RWCSV from Section B here. Your Financial Responsibility will be determined using this figure.

Types/Methods of Demonstrating Financial Responsibility Insurance Submit a certificate of insurance (Accord form from Broker) which contains the following information: – Name and address of insured – Name of Insurance Carrier(s) – Policy Number(s) – Coverage Amount Deductible should not exceed $250,000 per OSPR regulations – Certificate Holder information, Dept. of Fish and Wildlife, OSPR

Insurance Accord Form Example

Types/Methods of Demonstrating Financial Responsibility Insurance And a copy of the applicant’s insurance policy containing language that the policy covers damages as specified in Government section (h) or … provide the California standard Endorsement form DFW 1962 executed/signed by the underwriter. The insurer providing coverage must have a current AM Best rating of at least A-

Insurance California Endorsement Example

Insurance California Endorsement Example

Insurance California Endorsement Example

Types/Methods of Demonstrating Financial Responsibility Self Insurance – To qualify as a self- insurer, the applicant must meet the criteria of either Test I or Test II (795 (b)(1)(A or B). – The applicant must submit annual financial statements audited by an independent certified public accountant every year after the close of the applicant’s fiscal year (December 31). – These documents must be submitted every year within ninety (90) days of the close of the fiscal year (March 31).

Types/Methods of Demonstrating Financial Responsibility Surety Bond – Surety Bond - DFW 1948 – The surety company issuing the bond must be among those listed as acceptable sureties on Federal bonds in Circular 570 of the U.S. Department of the Treasury. – Applicant’s using surety bonds to demonstrate evidence of FR shall establish a standby trust fund/agreement. (DFW form 1961)

Types/Methods of Demonstrating Financial Responsibility Letter of Credit – Letter of Credit - FG OSPR Form 1927 – Applicant’s using a Letter of Credit to demonstrate evidence of FR shall establish a standby trust fund/agreement. (DFW form 1961)

Types/Methods of Demonstrating Financial Responsibility Guaranty – The Guaranty of Financial Responsibility for Oil Spill Response and Damages - OSPR Form 1928 – Applicant’s using a Guaranty to demonstrate evidence of FR shall establish a standby trust fund/agreement. (DFW Form 1961) – Where the guarantor is the parent corporation of the applicant, the requirement to establish a standby trust fund is waived.

Types/Methods of Demonstrating Financial Responsibility Resources Approved Inland Facility COFR Regulations Inland Facility Application (DFW 1932) Financial Responsibility Forms – Guaranty (OSPR 1928) – Letter of Credit (OSPR 1927) – Trust Agreement (OSPR 1961) – Surety Bond (DFW 1948) – Self-Insurance Worksheet – California Endorsement for Facility (OSPR 1962)