First step towards insuring Hindi films

MUMBAI, Feb 14: Insurance companies, still wary of extending insurance cover to Hindi films, have told producers they are now willing to ...

MUMBAI, Feb 14: Insurance companies, still wary of extending insurance cover to Hindi films, have told producers they are now willing to compensate losses sustained under certain circumstances.

At a meeting with representatives of the Film Federation of India FFI on Friday, senior officials of leading insurance companies said they would compensate for delays and other losses due to cyclones, bandhs, strikes, adverse whether conditions and traffic interruptions. They also said individuals involved in film-making would be insured. They, however, failed to arrive at a consensus on the quantum of the premium.

The decision is significant since securing insurance cover is a pre-condition to obtaining bank loans for Hindi films. The first step forward was taken when insurance cover was extended to producer-director Subhash Ghai8217;s Taal. Ghai, who has paid Rs 15 lakh as premium for his film valued at Rs 11 crore, says 8220;Bank finance or not, it is always better to cover risks by obtaining insurancecover which works out hardly one rupee per thousand rupees. It is nothing for big-budget films or for small-budget films since it is added to the cost of the film.8221;

Several grey areas, including stars stretching shooting schedules were discussed. For instance, the participants wondered, if a film like Pakeeza could take as many as 10 years to complete, how would insurance companies cope with inordinate delays.

For their part, industry representatives promised to streamline shooting schedules once a film is insured.

FFI President G Hanumantha Rao said paying a premium of 6 per cent of the production cost as is prevalent abroad would be too steep for Indian producers. However, insurance companies stated that premiums are bound to drop as more and more producers opt for cover.

The meeting, chaired by D Bannerji, managing director of General Insurance Company GIC, was attended by R K Joshi, assistant general manager of GIC, S Saranathan of United India Assurance Company, Rashmi Iyer, deputymanager of New India Assurance Company and Sushila Venkataraman of GIC, among others.

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Representing the film industry were FFI President G Hanumantha Rao, Pahlaj Nihalani, president of the Association of Motion Picture and TV Programme Producers, K D Shorey, FFI general secretary, B G Dave, financial consultant, M K Saeed of the Eastern India Motion Picture Association EIMPA and Supran Sen, FFI secretary.

Another meeting will be held after insurance companies work out modalities and cost-effectiveness.