Insuring Nuclear Power Plant
Disaster Management > Miscellaneous > Disaster risk reduction
Why in news?
- New India Assurance (NIA) will soon complete the placement of property cover for units three and four of Kudankulam Nuclear Power Plant (KKNPP), with a sum assured of over Rs 43,000 crore. The cover is likely to be executed with the participation of major global reinsurers.
Property Cover and Liability Cover:
- A nuclear plant has two covers: a property cover and a liability cover.
- The liability cover for a nuclear plant is always covered by the Indian Nuclear Insurance Pool (INIP), formed by the general insurers and state owned reinsurer General Insurance Corporation of India (GIC Re.)
- Indian Nuclear Insurance Pool provide insurance to cover the liability as prescribed under Civil Liability for Nuclear Damage (CLND) Act, 2010
About Civil Liability for Nuclear Damage (CLND) Act:
- It aims to cater to the civil requirements for victims of those who were affected due to nuclear disasters. This act ensures apt compensation as a helping hand for the victims.
- The Act facilitates India becoming a state party to Convention on Supplementary Compensation for Nuclear Damage (CSC)
Key features of the Act:
- It fixes liability for nuclear damage and specifies procedures for compensating victims.
- The Bill fixes no-fault liability on operators and gives them a right of recourse against certain persons. It caps the liability of the operator at Rs 500 crore. For damage exceeding this amount, and up to 300 million SDR, the central government will be liable.
- All operators (except the central government) need to take insurance or provide financial security to cover their liability.
- For facilities owned by the government, the entire liability up to 300 million SDR will be borne by the government.
- The Bill specifies who can claim compensation and the authorities who will assess and award compensation for nuclear damage.
About Convention on Supplementary Compensation for Nuclear Damage (CSC):
- It is an international nuclear liability regime governed by International Atomic Energy Agency (IAEA).
- The convention, which sets parameters on a nuclear operator’s financial liability, was signed in 1997.
- It aims at establishing a minimum national compensation amount and at further increasing the amount of compensation through public funds to be made available by the Contracting Parties.
- It seeks to establish a uniform global legal regime for compensation to victims in the unlikely event of a nuclear accident.
- The Convention stipulates the establishment of an international fund to increase the monies available for compensation of victims.
Parties to the Convention
- The Convention is open not only to States that are party to either the Vienna Convention on Civil Liability for Nuclear Damage (1963) or the Paris Convention on Third Party Liability in the Field of Nuclear Energy (1960), but also to other States provided that their national legislation is consistent with uniform rules on civil liability laid down in the Annex to the Convention.
- India, not being a party to the Vienna or Paris Convention signed the CSC in 2010 on the basis of Civil Liability for Nuclear Damage (CLND) Act
Which of the following statements is/are correct?
1. India is a party to the Convention on Supplementary Compensation for Nuclear Damage
2. India’s Civil Liability for Nuclear Damage (CLND) Act fixes no-fault liability on operators and gives them a right of recourse against certain persons
Select the correct answer using the code given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2