RIL to renew mega risk insurance policy

Our Banking Bureau

Mumbai, Nov 20: The Reliance Group with over Rs 50,000 crore of assets has entered the international reinsurance market to renew its ‘mega risk’ policy. The group has entered at a time when the global market is in a state of high flux following the September 11 US attacks.

New India Assurance, the largest domestic non-life company is issuing the basic policy for the Reliance Group which needs to be reinsured extensively. New India Assurance sources said that the efforts are on to avail the best of the terms for the group in a hard market.

The group which had paid Rs 85 crore as premium may have to shell out a substantially higher premium to get the coverage for the same range of risks which it had availed during last year. Besides, the group had made some claims earlier. ‘‘Nothing more can be said at this moment about the final shape of the policy and possible premiums and we are trying our best to get the best of deal,’’ said a top New India Assurance official.

Since 1999, Reliance Industries Ltd (RIL) thorough NIA avails the mega risk policy which is a ‘comprehensive package policy’ (CPP) for its petrochemical plants and related onshore and offshore properties situated at Jamnagar, Hazira and Patalganga.

NIA had approached the Tarrif Advisory Committee (TAC) with such a proposal saying that the petrochemical plants with integrated offshore risks could not be covered in the usual way under the existing tariff regulations.