With the threat of terrorism looming large, Nuclear Power Corporation (NPC) is for the first time proposing to insure its installations across the country. While security concerns have prompted NPC to insure its assets, it is precisely the same concerns which make the state-owned company reluctant to let international reinsurers inspect its sites.
The department of atomic energy and the Atomic Energy Commission have endorsed the view that representatives from reinsurers would be foreigners and therefore they should not be allowed into any of the installations located in Maharashtra, Uttar Pradesh, Rajasthan and Tamil Nadu.
Insurance companies are, however, not deterred and are pitching hard to get the account. According to estimates, the probable maximum loss (PML) for NPC's comprehensive cover would be over Rs 1,000 crore and will make it eligible to fall in the mega risk project category where the qualification is a PML of Rs 1,054 crore. Insurance company executives estimated a premium of at Rs 100 crore in case NPC opts for a comprehensive package policy instead of a fire cover.
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They, however, added that the exact sum assured and the premium is still not known as talks have so far been restricted to preliminary stage as NPC is not disclosing too much details either.
They also said that the reinsurers will not provide a cover unless they are permitted to inspect the installations. "We are trying to work out a solution and we are hopeful that the deal will come through," said an executive.
Insurers said that NPC has in the past taken some project insurance while a project is under construction and there have not been any problems in the past.
India is one of the few countries across the globe which have stayed away from purchasing an insurance policy for its nuclear installations.
In most countries, individual companies insure their properties. However, radioactive contamination is an exclusion in all policies sold to nuclear power companies and a policy with restricted perils is made available.