State-owned General Insurance Corporation is making efforts to involve private sector companies and international resinsurer...
State-owned General Insurance Corporation is making efforts to involve private sector companies and international resinsurers in the proposed Rs 1,500 crore Nuclear Insurance Pool. If the private sector joins the pool, the government participation will accordingly come down, Private sector companies are now showing interest to join the pool, top insurance sources said. “Earlier, we had thought of not accepting a contribution of less than Rs 10 crore from the private sector. But that is not the case now. We are ready to accept a lower amount ,” said GIC Re chairman and MD AK Roy.
This is the first indigenous pool which will be operating independently and will be providing insurance cover to all the existing 21 nuclear plants and new plants which will be set up in the country. In fact, all the other pools across the world are inter-linked. “We have already clarified to the global community urging them to drop their plan of inspecting the nuclear establishments within the country and we are ready to join the international nuclear pool. But, it’s an ongoing process and we don’t know by when it will actually happen,” he said.
In case the private companies join the pool in a big way, then the size of the pool will be increased and even the government’s participation may come down in the future. As of now, PSU insurers are giving Rs 750 crore and the government is contributing Rs 750 crore to the pool which will be having a total size of Rs 1,500 crore.
“We are working on issuance of bonds for raising capital for the pool. Let us see how does it work. The idea was to reduce our dependence on government for providing capacity to the pool over a period of time,” he said. The signing ceremony with all the stakeholders for the official announcement of pool becoming operational may happen any time now.
The nuclear pool will not be the largest pool in the country managed by GIC Re as there are other pools which are bigger in size. Terrorism pool has reached Rs 4,500 crore now. It had started with a small size of Rs 500 crore. “Even though the government has promised to contribute Rs 750 crore for the nuclear pool, still we will find ways to reduce dependence on them,” Roy said.
The origin of the nuclear insurance pool can be traced back to the passing of the Civil Liability for Nuclear Damage Act 2010 by Parliament. This brought third party liabilities following nuclear events under its ambit. The objective of forming the nuclear pool is to ensure availability of appropriate insurance cover to meet the requirements as stipulated in the Civil Nuclear Liability Act 2010.