IRDA clears P&I cover to ships carrying Iranian cargo
India's insurance regulator has approved a protection and indemnity (P&I) cover of up to $50 million for ships carrying Iranian cargo, The Hindu Business Line reported.
The insurance cover will be offered by United India Insurance, one of the four public sector insurers.
Under the new Indian P&I cover, designed exclusively for Iranian voyages, a ship will be insured for third-party claims up to $50 million.
This will enable Indian tankers to resume Iranian sailings which were suspended from July 1, following the Europe-based insurers' decision to deny P&I cover to Iranian shipments. Confirming the Insurance Regulatory and Development Authority (IRDA)'s clearance for its product, an official of United India Insurance said, details of the cover will be communicated to Indian shipping companies shortly.
A meeting of shipping lines and charters are likely to be convened in the next two days, the official said.
According to the proposal, the minimum premium for a voyage varies from $15,000 to $ 25,000 depending on the size of the vessel. The premium for aframax tankers will be $15,000, suezmax $20,000 and VLCC $25,000.
Initially, the cover will be extended only to Indian flag carriers. Vessels chartered by Indian companies will also be eligible subject to the Reserve Bank of India foreign exchange regulations, the official said. International P&I clubs provide annual insurance cover of up to $1 billion for a ship. The risk is shared by club members - shipping lines.
In the case of the proposed Indian cover, claims have to be paid out of the insurers' pocket.
HULL AND MACHINERY COVER
United India is also prepared to offer hull and machinery cover to Indian ships separately. Since Indian hull and machinery cover is partly reinsured with European insurers, ships carrying Iranian cargo may also lose H&M cover.
With the Indian insurance company agreeing to offer both P&I and H&M covers, domestic tankers be able to carry Iranian crude, said industry analysts.
Since Indian tankers were unable to carry Iranian crude without insurance, the government had allowed domestic oil companies to bring crude by Iranian vessels.
According to information, so far only one parcel has been contacted for shipment by Iranian tankers.