Context
Recently, the Department of Financial Services (DFS) formally inaugurated the Bharat Maritime Insurance Pool (BMIP), a domestic maritime insurance pool created to strengthen insurance support for India’s shipping sector.
About Bharat Maritime Insurance Pool
- BMIP has been launched as a $1.5 billion domestic maritime insurance mechanism supported by a sovereign guarantee of nearly $1.4 billion (around ₹12,980 crore).
- The initiative aims to ensure uninterrupted maritime insurance coverage for Indian-flagged, Indian-controlled and India-bound vessels operating across international sea routes.
- It provides protection against major maritime risks such as Hull and Machinery, Cargo, War Risk and Protection & Indemnity (P&I) liabilities.
- Insurance policies under the mechanism will be issued by domestic insurers participating as members of the pool through a common underwriting and reinsurance arrangement.
- Claims up to USD 100 million will be met through pooled and reinsurance capacity, while higher claims will be supported through the sovereign guarantee after reserves are exhausted.
- To supervise the functioning of the mechanism, a Governing Body and an Underwriting Committee have been constituted to ensure efficient administration and technically sound underwriting practices.
- The framework follows international practices adopted by countries such as the United Kingdom, Japan and South Korea.
