Earlier, looking beyond the ongoing West Asia crisis, which has severely paralysed global maritime trade and as a permanent measure,the Government and the Indian general insurers, led by state owned GIC Re, New India Assurance(NIA) and other general insurers, have stitched up a $100 million(around Rs 940 crore) Bharat Marine Pool(BMP), that would manage the war risk for vessels
New Delhi:In a bid to reduce dependence on overseas re/insurers, the Union Cabinet, on Saturday, chaired by Prime Minister Narendra Modi, given its nod for the formation of a Sovereign Maritime Fund to act as a reinsurance support for Indian-linked vessels at an affordable cost.
The proposed Sovereign Maritime Fund will have a corpus of around Rs 13,800 crore, said sources.
Earlier, looking beyond the ongoing West Asia crisis, which has severely paralysed global maritime trade and as a permanent measure,the Government and the Indian general insurers, led by state owned GIC Re, New India Assurance(NIA), have stitched up a $100 million(around Rs 940 crore) Bharat Marine Pool(BMP), that would manage the war risk for vessels.
The BNP will provide three kind of covers- Hull, Cargo and Protection & Indeminity(P&I) and has different sum assured for each of the segments which can be utilised on a floater basis for certain premiums.
Any capacity beyond $100 million, if required in terms of reinsurance, will be covered by the Sovereign Guarantee from the Indian government.
The pool is now almost formed and needs government’s approvals for its functioning.
The premium and rest of the modalities for the pool are being currently worked out, said sources at General Insurance Council, which is coordinating with different bodies to set up the BMP.
The purpose of the new pool, with a substantial capacity, is to provide a permanent platform, which can manage war related risk covers on a day to day basis with cheaper premiums and reduce dependence on overseas reinsurance capacity, which are either not available or available with unaffordable cost at the time of war-time emergencies.
Maritime insurance covers ships and cargo against risks such as accidents, piracy and conflict. War-risk cover typically excluded from standard policies and must be bought separately and the newly set up Bharat Marine Pool will exclusively cover war risks for Indian shipping industry.
GIC, which will manage the pool, is contributing Rs 500 crore of capacity and rest are coming from the general insurers who will be providing capacity calculated on the basis of 8 per cent of their Marine premium till Feb, 26.
However insurers like NIA, Tata AIG General Insurance, United India Insurance(UII),Oriental Insurance(OIC) are contributing larger capacity than others.
New India is providing almost Rs 100 crore while UII is contributing Rs 75 crore of capacity to the newly established pool.