New Delhi: Amid the West Asia crisis and geo-political tensions, the Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved the proposal for creation of a domestic insurance pool with a sovereign guarantee of Rs 12,980 crore, to facilitate continuous maritime insurance coverages for Indian flagged or controlled vessels or vessels destined to or starting from India.
The pool, called ‘Bharat Maritime Insurance Pool’ (BMI pool), ensures that Indian trade continues to have access to affordable insurance for vessels carrying cargo from any international origin to Indian ports and vice-versa, even when transiting volatile maritime corridors.
The pool would cover all maritime risks like Hull and Machinery, Cargo, P&I (protection and indemnity) and War risk.
The policies will be issued by insurers that are pool members, using the combined underwriting capacity of the pool, which would be around Rs 950 crore.
The pool will further help to manage liability insurance locally, tailored to Indian Shipping conditions and regulatory requirements, develop specialised Marine underwriting, claims management and legal expertise within the country, said the official statement.
Moreover, a governing body constituted for this pool would oversee the formation and functioning of the pool.
According to the government, with increased global volatility and geopolitical instability, maritime trade has been impacted with increased risk of losses for cargo and vessels resulting in increased insurance costs and uncertainty in continuous availability of insurance.
There is high dependence of Indian vessels on International Group of Protection and Indemnity (IGP&I) Club for P&I insurance covering third-party liabilities like Oil pollution liability, Wreck removal, Cargo damage, Crew injury and repatriation, Collision liabilities and so on.
There was a need for a domestic maritime risk covering pool to maintain sovereignty and continuity of trade in face of withdrawal of coverage due to sanctions or due to geopolitical tensions, said the government.
(IANS)
