After Indian nuclear operator, Nuclear Power Corporation of India (NPCIL), now overseas suppliers are also getting insurance covers.
New India Assurance has issued the first Nuclear Suppliers’ Insurance Policy policy on behalf of Rs 1,500-crore nuclear pool. This is expected to earn a premium of Rs 70-100 crore for insurance firms.
The public sector insurer had earlier issued the operators’ cover for a premium of Rs 100 crore to 21 nuclear plants under the NPCIL, the sole operator of all nuclear power plants in the country in June.
“Now suppliers who are basically overseas players can have all the confidence in us to go ahead and make the country’s nuclear (programme) a success,” said Atomic Energy Commission chairman Sekhar Basu.
“We’re looking for adding 2500-3000 MW of electricity every year on a continual basis,” Basu said. The Rs 1,500-crore nuclear insurance pool (NIP) has kicked off operations, thus enabling the nuclear sector in India to expand the operations.
In an informal chat after launching the policy, Basu said some nuclear power plants can be inspected by the foreign companies while some under the present law can’t be inspected.
“Now it’s easier for suppliers to co-ordinate without any fear or without any feeling of being subjected to liability claims… I think the next step will be, and I don’t know how far it will be feasible, providing property insurance coverage for both physical damage as well as business interruption covers to the nuclear plants,” said G Srinivasan, chairman and MD of New India Assurance.
NIA would also administer claims as and when notified on behalf of pool. The newly launched Nuclear Supplier’s Policy will now make up for the lost time in completing the country’s nuclear power plants, said SK Sharma, MD, NPCIL. “Overseas players have shown enthusiasm in providing technology and credit facility for our nuclear power plants,’’ he said.
“We are now in a position to provide covers to nuclear plants so that country can produce enough power for the 40 million electricity starved people,’’ said Alice Vaidyan, CMD, GIC Re.
GIC Re, India’s national reinsurer, is managing the Rs 1,500-crore pool, an arrangement to address exposure of nuclear operators and suppliers. The pool, the 27th NIP in the world, will cover the risks emanating from civil liability for Nuclear Damage Act 2010.
There are 21 existing nuclear plants and five more are being added. NPCIL’s mandate is to triple the nuclear energy generation by 2022 from the current level of 4,750 MW.
The pool will address third party liability insurance under Civil Liability of Nuclear Damage Act (CLNDA) 2010 to begin with and later expand into property and other hot zone risk for which it will work in close co-ordination with nuclear power industry.
Though India’s first nuclear power plant — the Rajasthan Atomic Power Station (RAPS) — dates back to 1960s, it was only in 2010 that India brought out a law on civil nuclear liability in the form of Civil Liability for Nuclear Damage Act (CLND).
“Indian insurance companies have not had the chance to acquire any significant expertise or capacity for covering property risks in the ‘hot zone’ of nuclear power plants,” said former IRDA Member (Life) KK Srinivasan said. Beyond the ‘hot zone’ the process of generating power using steam to run the turbines is not significantly different from the process followed in thermal power plants. Thus, insurers in India do have the ability and capacity to assess and underwrite risks outside the ‘hot zone’.