“It will also save forex outgo on insurance premiums,” he said, adding that as a result insurance cost will decline about 25%.
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ET had reported on March 19 that the government was looking to set up a dedicated fund to support insurers providing maritime cover for India-bound ships.
GIC Re will be the administrator of BMIP, Vaishnaw said.
Fund to be Set up for 10 Years
Other contributors will include public and private sector general insurers and oil marketing companies, Vaishnaw said, adding the pool will be set up for a period of 10 years, which can be extended to 15.Also Read: Rupee depreciation forces Indian firms to adopt Yuan payments
A finance ministry statement said BMIP will cover risks such as hull and machinery, cargo, protection and indemnity (P&I) 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 ₹950 crore,” it added.
Vaishnav said GIC Re will contribute about ₹400 crore to the pool.
“The 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 ministry said. The pool will help manage liability insurance locally, tailored to Indian shipping criteria; and develop specialised marine underwriting, claims management and legal expertise within India, it added.