The first of its kind multi-crore fund facility with a corpus ranging between Rs.2,000 crore and Rs.3000 crore is underway to protect and insure refineries that import oil imports from Iran in India.
To be named as “Indian Energy Insurance Pool”, the finance ministry has recommended that the corpus be created through a participation of Rs.1,000 crore from the Oil Industry and Development Board (OIDB) under the petroleum ministry along with Rs.1,000 crore contribution from all public sector general insurance companies including General Insurance Corporation.
“The first meeting of the finance ministry’s task force under the chairmanship of member (Non-Life) Insurance Regulatory and Development Authority (IRDA) was held recently,” a top government official told HT.
“The task force suggested that the government shall provide capacity by way of sovereign guarantee for the losses in excess of Rs.2,000 crore, which may go up to Rs.10,000 crore.”
Officials said the setting up of this new fund is necessary as insurance companies have inserted a ‘sanctions clause’, which limit the amount to be paid in case a claim arises, in the refinery asset insurance cover of Mangalore Refineries and Petrochemicals Ltd (MRPL) and Essar Oil — the two companies importing Iranian oil.