The Russian company working on the Indian Koodankulam nuclear power plant has revealed that reinsurance cover is needed for the plant to be complaint with India's nuclear liability laws.
India's strict nuclear liability laws mean that no single company can assume the exposure on the plant because of the size of the risk associated with it.
India's Department of Atomic Energy has asked the finance ministry to form a nuclear insurance pool after India's state owned insurer, General Insurance Company (GIC) was not able to provide sufficient cover for the nuclear power plants.
The proposed nuclear reinsurance pool will cover material damage and the civil liability arising out of any harm to the hot and cold zones of nuclear plants.
An alternative insurance pool for nuclear plants that was proposed by state-run reinsurer GIC Re has not come to fruition as the Indian government is unable to come to a consensus with international reinsurers regarding the inspection of nuclear facilities.
"The nuclear liability issue can only be resolved by a insurance pool that would provide reinsurance for the risk", Valery Limarenko, director at NIAEP-ASE, the construction arm of Rosatom, the Russian nuclear energy corporation that is building the plant, told reporters at the Atomexpo 2014 international nuclear energy conference.
"No one company can assume such huge liability," Limarenko added.
India's Nuclear Civil Liability Act sets out that at least $320m of opeartor liability cover is needed for a nuclear plant to be complaint.
GIC Re has managed to raise $78m from local insurers for the proposed nuclear insurance pool, which will provide cover to the existing, as well as new, nuclear installations in the country.
The Indian state reinsurer was seeking the remaining coverage,around $242m,from overseas nuclear insurance pools.
The government has announced that it has will act as insurer of last resort for up to $300m.