The Hindu Business Line : Risk cover for catastrophe-hit on cards

The National Disaster Management Authority of India (NDMA) plans to partner insurance companies to mitigate the effects of any disaster. Insurers have recommended to the authority that all government-run schemes for the poor should carry mandatory insurance against catastrophes.

"Insurance companies will aid us in areas such as vulnerability mapping in the country and evolve affordable insurance products for communities that are disaster-prone," said Mr M Shashidhar Reddy, Member, NDMA.

He said the National Disaster Management Authority would act as a coordinating agency to bring together institutions such as the National Remote Sensing Agency, Indian Space Research Organisation, India Meteorological Department and others for their expertise on vulnerability mapping and identification of disaster-prone zones.

He was speaking at a meeting with insurers held at the National Insurance Academy, Pune. The NDMA hopes to partner insurers and create products in the area of property, agriculture, health and life insurance, which could be subsidised by the Central and State governments. The authority hopes to replicate the initiatives of the Gujarat State Disaster Management Authority in the aftermath of the Kutch earthquake in 2001.

Housing insurance was introduced in Gujarat along with the housing sector reconstruction programme. Around 2 lakh houses reconstructed under the programme have been insured at Rs 367 per policy for assets valued at Rs 1 lakh and for a 10-year term.

Recommendations

Insurers have recommended the introduction of universal coverage of catastrophe insurance in the case of property, meaning all buildings will have to secure compulsory insurance. They have also suggested that insurance against catastrophes be made mandatory under all government schemes. Other recommendations include the creation of a separate pool for each catastrophe backed by tax exemptions, to fund the repercussions of such disasters. Currently, catastrophes are not covered other than under a fire and engineering policy.

The NDMA will finalise its policy by December. Mr Reddy said a State Disaster Management Authority under the chairmanship of Chief Ministers and a District Disaster Management Authority led by the District Collector and President of the Zilla Parishad would soon be operational.

He said NDMA would create a National Disaster Response Fund, a National Disaster Mitigation Fund and other similar funds at the district and the state levels.

Mr Vinod C Menon, Member, NDMA, said talks were being held with private and public carriers to set up heli-ambulance and heli rescue services.

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