Economy

Public sector general insurers, GIC Re discuss nuclear insurance pool

Deepa Nair Mumbai | Updated on November 25, 2017 Published on April 29, 2014

Move to create cover for reactors in case of disasters

The four public sector general insurance companies and the national re-insurer General Insurance Corporation (GIC Re) have set the ball rolling for setting up India’s first nuclear insurance pool.

The move to create an insurance cover for nuclear reactors assumes significance as it will cover the liabilities in case of a nuclear disaster. Recently, after years of deadlock on liability, India and Russia have signed an agreement for building units 3 and 4 of the Kudankulam Nuclear Power Plant project.

The issue of liability has gained prominence internationally especially in the aftermath of the Fukushima incident in Japan.

At present, nuclear reactors in India only have insurance cover for zones that are outside the area of radiation and reactors.

A top official from a public sector general insurance company said that the four state-owned insurers met top GIC Re officials last week to discuss the contributions from them and modalities in the formation of the pool.

The need to set up a pool arises, as individually insurers do not have the capacity to insure all the reactors in view of the high cost, said the official.

Under the nuclear civil liability law, compensation of up to ₹1,500 crore will have to be paid in case of a mishap involving a nuclear plant.

While the negotiations on forming a pool for nuclear plants started in 2010, they were stuck as the Government and international reinsurers were unable to arrive at a consensus on inspection of the facilities.

Ashok Kumar Roy, Chairman and Managing Director of GIC Re, the sole domestic reinsurer, said, that currently discussions are on resolving the issues related to inspection of the nuclear plants. According to industry experts, there are 26 nuclear international pools across the world, which extend support to each other. The four public sector insurers — New India Assurance, Oriental Insurance, National Insurance and United India —and the sole domestic reinsurer GIC Re are expected to be a part of the pool.

Published on April 29, 2014
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