Nuclear insurance pool to offer three policies

Nuclear insurance pool to offer three policies

Nuclear insurance pool to offer three policies

The planned India Nuclear Insurance Pool would offer three types of policies to the operators and suppliers of a nuclear power plant whereas insurance premium would depend on the risk of exposure to people and property around nuclear installations among other factors.

There would be policy for operators; policy for turn key suppliers and policy for suppliers other than turn-key suppliers. “The pricing of premiums will depend on factors such as risk probability, possible severity of damage and exposure to people and property around nuclear installation,” says a document released on Sunday by the Ministry of External Affairs explaining the perceived grey areas in the Civil Liability for Nuclear Damage Act 2010 and CLND Rules of 2011.

The pool's administrator, General Insurance Corporation, is engaged with the Nuclear Power Corporation of India Limited and others to work out the premiums based on the risk appraisal.

A white paper from the GIC is expected shortly explaining the insurance pool and premiums and an international conference would be held to learn from the experiences of other countries. The impact on the cost of power due to the premium payments is expected to be minimal.

“The cost escalation due to nuclear liability would be marginal. It should be few paise per unit of electricity,” Anil Kakodkar, former secretary in the department of atomic energy said last week.

According to an assessment made by G Balachandran from the Institute for Defence Studies and Analyses, managing an insurance pool for nuclear power plants is a “very profitable business” as seen in the industrialised nations like the USA and France.
The NPCIL with its 24 reactors will have to pay an annual premium of Rs 36 crore if the premium is 0.1 per cent of Rs 1,500 crore.

 It would be Rs 72 crore if the premium is 0.2 per cent, it says.For the foreign companies supplying 1000 Mwe power plant costing about $ 1.5 billion, the annual fee would be less than $1 million. There would not be any additional burden on the taxpayers when the new regime kicks in.

The Rs 1,500 crore insurance pool would comprise Rs 750 crore from four insurance companies and the remaining Rs 750 crore from the government. The maximum liability under the law could be Rs 2,610 crore (300 million Special Drawing Rights), but the operator's liability is capped at Rs 1,500 crore.

The remaining Rs 1,110 crore will be bridged by the Centre and beyond Rs 2,610 crore, India would be able to access international funds under the Convention on Supplementary Compensation for Nuclear Damage, once it is party to the convention.

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