India: Govt-owned insurers to create nuclear insurance pool

India’s stalled civil nuclear power programme with foreign participation is set to get kickstarted with public-sector insurers agreeing to create the INR15-billion (US$242 million) insurance pool without insisting on inspection of facilities or support from foreign reinsurers. Abroad, insurance pools insist on inspecting nuclear facilities.

The issue of the insurance pool has been holding up the country’s nuclear power programme since 2010. Under Indian law, besides the plant operator, equipment suppliers are also liable in the event of an accident or mishap up to INR15 billion. This has deterred foreign equipment suppliers from entering the sector, reported the Hindu Business Line.

According to a senior GIC Re official, domestic insurers have now agreed to go ahead with the nuclear insurance pool without insisting on inspection of facilities. The official said that the four domestic insurers — New India Assurance, Oriental Insurance, National Insurance, and United India — can provide cover of up to INR7.5 billion.

GIC Re is looking at overseas nuclear pools for the balance amount. The official said: “We have written to many foreign reinsurers and have made it clear that there will be no compromise on the issue of inspection.”

Further, with the central government accepting the responsibility of providing support as the “insurer of the last resort,” GIC Re is all set to create the country’s first nuclear insurance pool.

The issue has gained urgency as Prime Minister Narendra Modi is understood to have asked his officials for a quick resolution of the issue to facilitate the realisation of an India-US nuclear deal ahead of US President Barack Obama’s visit to India in January.

At present, nuclear reactors in India only have insurance cover for zones that are outside the area of radiation and reactors. The proposed pool will cover material damage and the civil liability arising out of any harm to the hot and cold zones of nuclear plants.

Source : Asia Insurance Review

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