The country's maritime administration is backing a proposal to set up an Indian Protection and Indemnity (P&I) Association for coastal ships.
Mr Satish Agnihotri, Director General of Shipping, on Friday told a group which has come up with the idea of setting up an Indian P& I Association, that the administration can support it in terms of providing incentives to coastal ships that would be insured with the association.
The Government can also make it mandatory for coastal ships to insure with the Indian entity, he said.
The group today made a presentation on the proposed Indian P&I entity to a select group of leading Indian shipowners here today.
The meting was also attended by the Director General of Shipping and the Nautical Advisor to the Government of India. A P&I Club is basically a mutual non-profit insurance association that provides cover to its members — ship-owners or charterers — by pooling their resources to meet each others' third-party liability losses.
Initial plan
According to the presentation made by the promoter group, headed by Capt J.C. Anand, Chairman Emeritus, Indian Register of shipping, the initial plan is to form an association of owners of small and medium sized ships, which are operating on the coast. This P&I association, which will provide insurance cover to these ships by collecting a fixed premium, will go for 100 per cent reinsurance. The structure of the association will be worked out after taking into account taxation and regulatory issues.
In the case of small and medium sized vessels, claims will be lower as compared to large ocean going vessels.
So the group has proposed to start with coastal ships.
“It will take a long time to form an Indian P&I club, but we will have to begin somewhere. So we are here to discuss the feasibility. We have also taken it up with the Indian National Shipowners Association,” said Capt Anand.
The move to set up an Indian P&I association assumes significance in the context of the recent decision of the Europe-based P&I Clubs to refuse cover to ships carrying Iranian cargo from July1.
The public sector insurance companies are working on limited P&I cover to Indian ships.