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General Insurance Corporation of India (GIC Re) and 11 other non-life insurers have formed the India Nuclear Insurance Pool.
It will have a capacity of Rs 1,500 crore.
New India Assurance will issue the policy and deal with management of cover to the operators and suppliers, on behalf of all direct insurance companies participating in the pool.
Apart from GIC Re, New India, Oriental Insurance, National Insurance and United India Insurance from the public sector, the private ones are ICICI Lombard General Insurance, Tata AIG General, Reliance General Insurance, Chola MS General Insurance, IFFCO Tokio General Insurance, SBI General and Universal Sompo General.
The policies offered will be a nuclear operators liability insurance policy and a nuclear suppliers' special contingency (against right to recourse) insurance policy.
A K Roy, chairman and managing director of GIC Re, said reinsurance support had come from Nuclear Risk Insurer from London. "Going forward, GIC Re as the pool manager will strive to ensure that this pool develops into a one-stop facility for covering all nuclear risks," he added.
This pool will be the 27th such market pool globally. It is expected to address third-party liability insurance to begin with and later expand into property and other hot zone (inside reactor areas) risk. This will cover both operators and suppliers. At present, only cold zones (outside reactor areas) are covered.
The idea of forming a pool was mooted in early 2013 and got stuck due to differences among stakeholders on certain clauses. In 2010, Parliament passed the Civil Liability of Nuclear Damage (CLND) Act, which creates a liability cap for nuclear plant operators for economic damage in the event of an accident.
This pool will provide the risk transfer mechanism to the operators and suppliers to meet their obligations under the CLND Act. At a later stage, this pool also looks to provide reinsurance support to other such international pools.
R K Sinha, chairman of Atomic Energy Commission, said the country had achieved another milestone in the nuclear energy industry by setting up this pool.
The CLND Act also provides for state-run Nuclear Power Corporation of India, which operates all atomic power plants in India, to seek compensation from suppliers in an accident due to faulty equipment.
G Srinivasan, chairman and managing director of New India, said the first policy would be issued next month. He added that insurance through the pool would be a solution for suppliers' concerns about liability from nuclear risks.
The CLND Act provides for Rs 1,500 crore as maximum liability for nuclear damage.
