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The proposed nuclear risk pool that will be set up in India will have five government-owned insurance companies (General Insurance Corporation of India (GIC), New India Assurance, Oriental India Insurance, National Insurance and United India Insurance) providing half the capacity for the Rs 1,500-crore pool. The rest will come from the central government.
Prime Minister Narendra Mdoi in his statement at the joint press interaction with President Barack Obama of America, said the civil nuclear agreement was the centrepiece of our (India-US) transformed relationship, demonstrating new trust.
“In the course of the past four months, we have worked with a sense of purpose to move it forward. I am pleased that six years after we signed our bilateral agreement, we are moving towards commercial cooperation, consistent with our law, our international legal obligations, and technical and commercial viability,” he said.
G Srinivasan, chairman of New India Assurance, said the of the proposed Indian Nuclear Energy Pool: “This will cover both operators and suppliers and will be functional as soon as the need arises.”
It is meant to insure the risks from nuclear reactors. There will be cover for both hot zones (radiation and nuclear reactors) and cold zones (outside reactor areas).
The idea of forming a pool was mooted in early 2013 and had got stuck due to differences among stakeholders on certain clauses.
Having a pool would also mean inspection by foreign re-insurers. This is an area of contention but sources added this provision is being worked out. This pool would cover the operators of nuclear plants as stipulated in the Civil Liability for Nuclear Damage (CLND) Act. Earlier, there were also issues with respect to recourse for equipment suppliers, if there is a liability. This was contested in the US and Russian markets, with Indian providers also later raising concerns.
The insurers named have also been in talks with the international pool authorities and market players.
Once the pool is set up, it is envisaged that there would be a collaboration between the national and international pool for sharing of risks.
At present, nuclear reactors in India have covers for zones outside the area of radiation and nuclear reactors. This is due to the lack of underwriting data on the liability for hot zones. Once the pool is in place, the premiums will go into the pool, and cover for hot zones and its liabilities will be provided.
In 2010, Parliament passed the CLND Act, which creates a liability cap for nuclear plant operators for economic damage in the event of an accident. It also leaves nuclear suppliers free of most liability. Industry experts had said both nuclear operators and suppliers should be jointly held liable for civil damages in case of an accident.
The Act also provides for state-run Nuclear Power Corporation of India, which operates all the atomic power plants in India, to seek compensation from suppliers in case of an accident due to faulty equipment. The Kudankulam Nuclear Power Plant in Tamil Nadu, the 21st atomic reactor in India, will not be covered under this pool because its contract was signed much before the Act was passed. However, this plant has been covered for its non-radiation or cold zones.
