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Need of Nuclear Insurance
Cover in India
With the passage of the CLND Act 2010, the Indian civil nuclear industry now comes
under the liability regime.
Section 6.(2) of the Act provides for the liability of an operator for each nuclear
incident to the extent of —
• INR 1500 CR. in respect of nuclear reactors having thermal power >= 10 MW
(equivalent 250 million $)
• INR 300 CR. in respect of spent fuel reprocessing plants (equivalent 50 million $)
• INR 100 CR. in respect of the research reactors having thermal power <10MW, fuel
cycle facilities other than spent fuel reprocessing plants and transportation of
nuclear materials (equivalent 17 million $)
As per Section 8 of CLND Act, 2010, the Nuclear Operator is required to maintain
insurance or financial securities, to cover its liability as under Section 6 (2).
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Need of Nuclear Insurance
Cover in India
CLND Act, 2010 does not prescribe any liability on the suppliers, however,
Section 17 of CLND Act, 2010 gives the Right to Recourse to the Operator against
the Suppliers.
The operator of the nuclear installation, after paying the compensation for
nuclear damage in accordance with section 6, shall have a right of recourse
where-
(a) such right is expressly provided for in a contract in writing;
(b) the nuclear incident has resulted as a consequence of an act of supplier or
his employee, which includes supply of equipment or material with patent or
latent defects or sub-standard services;
(c) the nuclear incident has resulted from the act of commission or omission
of an individual done with the intent to cause nuclear damage.
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Why Nuclear Pool ?
India Nuclear Insurance Pool was formed in the year of 2015 after
receiving the approval from IRDAI.
GIC Re has also taken a responsibility of managing the Pool.
Capacity Providers:
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INIP:
Framework
Coverage :
Current
– Nuclear Operator’s Liability (CLND Act 2010) Insurance Policy
– Nuclear Supplier’s Insurance Policy (Right to Recourse Only Under CLND
Act-2010)
Capacity: INR 1,500 Crore consisting of 150 Units with value of INR 10 Crore per
Unit.
Members : 12 non-life insurers including GIC Re (Indian reinsurer)
Liability : Joint and Several
Administration of INIP : GIC Re (Pool Manager)
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INIP:
Coverages
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NUCLEAR OPERATOR’S LIABILITY (CLND ACT
2010) INSURANCE POLICY:
Salient features
• In the event of any payment under this Policy, the Pool shall be
subrogated to all of the Insured’s rights of recovery
• Annual Policy
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NUCLEAR SUPPLIER’S INSURANCE POLICY (RIGHT TO
RECOURSE ONLY UNDER CLND ACT-2010):
Salient features
• Limit of Indemnity: INR 1500 crore / approx. 250 million USD or value of contract whichever is less.
• Pool to cover the liabilities of Suppliers to the operator arising out of invocation of right to recourse under
Section 17 (a) & (b) of CLND Act 2010.
• Pool shall not indemnify any liability under any other laws of India or any other country including the penal
liability under CLND Act, 2010, claimant’s costs, fees, interest, expenses, defence costs, cost of proceedings
and the like.
• Provided:
– Nuclear Operator has taken the Nuclear Operator's Liability (Act Only) Insurance Policy (under CLND
Act , 2010) from the Company covering the same Nuclear Installation(s) , which is al ready in effect and
shall continue to remain in effect for the entire term of this Policy . It is a condition precedent to any
claim of indemnification under this Policy that the Nuclear Operator's Liability (Act Only) Insurance
Pol icy (under CLND Act , 2010) be in effect at the time any such claim is made under this Policy.
– That the operator invokes right to recourse under section 17 (a) & (b) of the CLND Act 2010.
– The liability is proved by competent authority & legally holds the supplier liable for the
reimbursement of compensation paid by the operator under Section 6 of the act.
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India Nuclear Insurance Pool:
Claims Settlement framework
Claimant
Claims
Award of Claim
INIP
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The GIC Re:
Advantage
Experience in managing –
International Pools:
• FAIR Natural Catastrophe Reinsurance Pool
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Important events
• Launch of INIP- 12th June, 2015