To sidestep this problem, New India changed the policy documents to exclude potential Russian risk, but has still not been able to issue a policy to the Nuclear Power Corp of India Ltd (), despite having collected the first premium in July.
Even after excluding the Russian scope of work, reinsurers are not comfortable with taking on the risk.
At an Impasse
Their reluctance stems from explicit Moscow links to financing, external contractual assignments and even fuel linkage for the plants.
Experts say lack of reinsurance for such a large strategic asset could expose it to unprecedented risks. “Excluding Russian scope from policy documents is a blunder because any mishap in the plant will not be borne by reinsurers, citing this clause,” said a person familiar with the policy. “New India’s own capacity to insure such projects is a mere Rs 500 crore, and it needs a reinsurer to back it up to underwrite this huge risk. For now, things are stuck despite New India already collecting the first premium.”
New India Assurance acting chairman Madhulika Bhaskar did not respond to requests for comment sent via email and WhatsApp. NPCIL also did not reply to an email seeking comment. A spokesperson said NPCIL expects the policy to be issued in the next “two to three days.”
Even after excluding Russian risk, the project still needs a cover of Rs 30,300 crore. Sanctions againsthave compounded the impasse, involving New India and national reinsurer General Insurance Corp, on the pricing of the policy for this plant.
ET reported in February that New India andRe have quoted different rates to cover the plant. Under the law, New India cannot approach another reinsurer without GIC Re’s permission, but the reinsurer, which sees the premium quoted by New India as too low, isn’t ready to give up its right. “New India believed it could sidestep GIC by offering only 5% of the reinsurance, as the minimum mandated by law, by taking on board global reinsurance companies. But the sanctions against Russia have put paid to those calculations,” the person cited above said.