FinMin, insurance sector mull catastrophe pool
The proposal for an insurance catastrophe pool (INCIP) could cost up to Rs 5,000 crore if applied across India but will bring down the present undefined bill to rebuild lives after the catastrophes, providing a big comfort to citizens, the government and the insurance sector.
The proposal submitted by the industry through the General Insurance Council, the representative body of the general insurers envisages a pool on the lines of the Terror Pool and Third Party Motor Pool (now converted into a Motor Third Party Declined Risk Insurance Pool).
“The national reinsurer GIC Re will also submit its own proposal to tackle the reinsurance side of the proposed pool,” a senior GIC official confirmed. As per the proposal, there should be a standalone policy covering all natural catastrophe perils with the benefit of cover going to those or their kin who are directly affected by the disaster. The plan has been floated by the insurance regulator since at least 2007, but has got deferred over administrative issues.
Once implemented, India will join several countries like Turkey, Norway and others which have set up such funds to
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