Union Government announces Rs 1500 crore Indian Nuclear Insurance Pool
Union Government has launched an Indian Nuclear Insurance Pool (INIP) of 1,500 crore rupees as per the mandatory provision under the Civil Liability for Nuclear Damage Act (CLND), 2010.
It was announced by Minister of State (MoS) in the Department of Atomic Energy Jitendra Singh in New Delhi.
With this launch, INIP became 27th nuclear insurance pool in the world that manages nuclear liabilities. India also has joined an exclusive list of countries having nuclear pools.
The pool will address third party liability insurance in a bid to offset financial burden of foreign nuclear suppliers under the CLNDA, 2010.
The pool is set up by General Insurance Corporation (GIC) of India and 11 other non-life insurers. They are New India, Oriental Insurance, National Insurance and United India Insurance from the public sector apart from private insurance companies.
Why the INIP is formed?
A clause in the CLND Act empowers the operator the Right to Recourse and allows it to sue the suppliers in case of any accident. This was seen as a major hindrance to the growth of the nuclear industry. These concerns led to the formation of the nuclear insurance pool.
Implications of INIP
- To deal with management of cover to both operators and suppliers on behalf of all direct insurance companies participating in the pool.
- INIP will offer policies on the nuclear operators liability insurance policy and a nuclear suppliers’ special contingency (against right to recourse) insurance policy.
- Address third-party liability insurance and later expand into property and other hot zone i.e. inside reactor areas risk. It should be noted that at present it only covers cold zones (outside reactor areas).
- Provide the risk transfer mechanism to the operators and suppliers to meet their obligations under the CLND Act.
Month: Current Affairs - June, 2015