Even as the country is slowly gearing up to generate more power from nuclear resources, the government is preparing an ?insurance pool? for nuclear plants falling under high-security zones.
The government has already asked GIC Re, country?s official reinsurer, to prepare the basic framework for the ?insurance pool? along with top global reinsurers.
Under the plan, nuclear plants will get the primary cover from domestic general insurers, while the ?insurance pool? involving GIC Re and other international reinsurers will provide the reinsurance cover.
Confirming the development to FE, Yogesh Lohiya, chairman & managing director, GIC Re, said the firm was in advanced stage of laying out the basic framework of the ?pool? and is currently in talks with the government, Insurance regulator Irda, National Security Advisor and other top-notch international reinsurers for finalising the details.
GIC is also in talks with global players such as Munich Re, the largest international reinsurer, Swiss Re, the second largest international reinsurer, Scor Re and Hannover Re.
?The act of providing covers to nuclear plants is entirely a new phenomenon in the Indian insurance industry. We are following couple of international models for this,?? Lohiya said.
The policy will have several parts, including covering the risks of a hot zone?where nuclear materials will be processed?and the electricity-generating nuclear plants.
Industry sources point out that the government is also proposing a Bill on civil nuclear liability which is part of the Indo-US nuclear agreement.
Expected to be passed during the Winter Session of Parliament, the Bill proposes Rs 300-crore cap on insurance liability against any accidents in nuclear installations. Damages in excess of this amount will be borne by the government.
The limited-liability clause will help lure the private sector and multinationals, planning billion-dollar investments for nuclear plants for civilian purpose. Also limited liability on operators is significant for US firms that are looking to supply nuclear reactors to the India.
The government has already chosen two states?Andhra Pradesh ad Gujarat?to set up first few civilian nuclear plants. The Bill also proposes to set up a six-member nuclear damage commission to look into claims.
?The operator shall, before he begins operations, take out insurance policy or other financial security covering his liability,?? says the proposed Bill.
The proposed Bill, besides limiting the liability of the operator, gives flexibility to the Centre to decrease the compensation amount on the operator. However, the compensation amount cannot be reduced to less than Rs 100 crore. The amount of liability shall not include any interest or cost of proceedings.
Of the total installed capacity of 1,52,000 mw, the country currently produces 4,120 mw (2.9%) of power through nuclear plants and intends to expand it to 20,000 mw by 2020 and 40,000 mw by 2032 with a total investment of Rs 80,000 crore.
Several private sector companies, including Larsen & Tubro, are keen to set up civilian nuclear plants. Apart from the US, multinationals from Russia and France are planning to supply nuclear reactors for plants.