The existing one-year tailor-made packaged policy, which had cost Reliance around Rs 52 crore, is expiring on Monday.

While the net premium of the deal has gone up from Rs 30 crore to over Rs 50 crore, the other commission charges have increased by Rs 5 crore from Rs 20 crore to Rs 25 crore.

The much-awaited Reliance deal is expected to set a benchmark for the domestic companies including the state-owned Air-India, Indian Airlines, Indian Oil, Hindustan Petroleum Corporation Ltd (HPCL), Indian Petrochemical Corporation (IPCL), Haldia Petrochemicals, Managalore Refinery, Dhabol Power project, whose renewal is due in few months of time.

Though the reason attributed for the higher renewal premium for the Reliance packaged deal is attributed to the hardening of the re-insurance market, Reliance's total claim last year - pegged around Rs 40 crore - has also contributed to the higher cost.

``Twenty-five per cent of the higher cost of the new policy is due to the Hazira refinery,'' said London market sources. In a deal sealed onThursday, a clutch of reinsurers led by Munich Re has provided the renewal reinsurance cover for the packaged policy including all the assets of the group estimated around Rs 55,000 crore.

Though the basic value of the group assets remain at last year's level of Rs 50,000 crore, another 10 per cent has been added to factor in inflation.

The deal underwritten by the New India Assurance along with other state-owned non-life companies has been re-insured to the extent of 95 per cent with the international reinsurers. Though the new reinsurance regulations formulated by the Insurance Regulatory & Development Authority (IRDA) has favoured a maximum retention of any insurance deal, mega risks relating to airlines and oil and power companies can be placed in the international market in a major way with the permission of the regulator.

Going by the new rules, the General Insurance Corporation, the national reinsurer, has got its 20 per cent manadatory cession of the deal, which has also been reinsured extensively in the international reinsurance market.

Last year, for the first time, in an innovative deal, the Reliance group switched over to `one packaged policy' by seeking one policy for its assets located in different places including those at Jamanagar, Hazira, and Patalganaga, thereby reducing the total insurance policy from Rs 140 crore to around Rs 52 crore.

For facilitating such transaction, the Tariff Advisory Committee (TAC), the body which fixes tariffs for the domestic non-life industry, had changed its rules by allowing companies having more than Rs 10,000 crore in assets to determine their insurance cost directly depending upon the reinsurance market. Also companies whose maximum probable losses are within Rs 1,050 crore can also approach the re-insurance market directly to get the benefit of premium discount.