News15 Jun 2015

India:US$234-mln nuclear insurance pool launched

15 Jun 2015

The government has launched the India Nuclear Insurance Pool (INIP) with INR15 billion (US$234 million) which will provide cover to both operators and suppliers of 26 nuclear plants of the Nuclear Power Corporation (NPC). The pool is managed by state-owned reinsurer, GIC Re.

The pool is set up by GIC Re and 11 other non-life insurers including New India Assurance, Oriental Insurance, National Insurance and United India Insurance from the public sector as well as  several private-sector insurance companies. GIC Re has also succeeded in roping in a foreign player, namely, Nuclear Risk Insurers (NRI), a UK-based nuclear pool. NRI will provide reinsurance support of INR5 billion.

With the launch of INIP, India has joined an exclusive list of countries which have nuclear pools. INIP is the 27th such pool in the world managing nuclear liabilities and addresses third party liability insurance under the Civil Liability of Nuclear Damage (CLND) Act. It will later expand into property and other hot zone risks in which it will work in close co-ordination with the nuclear power industry.

"Going forward, GIC Re as a pool manager shall strive to ensure that INIP develops into a one-stop facility for covering all nuclear risks," Mr AK Roy, Chairman and Managing Director of GIC Re, said.

State-owned general insurer, New India Assurance, will issue the insurance policies and deal with the management of cover to the operators and suppliers on behalf of all direct insurance companies participating in the pool. These are: a nuclear operators liability insurance policy and a nuclear suppliers' special contingency (against right to recourse) insurance policy.

INIP was launched last Friday by Dr RK Sinha, Chairman of the Atomic Energy Commission, at a function in Mumbai which was also attended by dignitaries from India and abroad including representatives of the insurance and reinsurance industry, the nuclear industry, and other government officials.

Clauses in the CLND Act, which give nuclear plant operators the right to recourse and allow it to sue suppliers in case of any accident, had been seen as being a major hindrance to the growth of the nuclear industry in India. These concerns led to to the formation of INIP.  NPC's mandate is to triple nuclear energy generation by 2022 from the current level of 4,750 MW.

 

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