Irda chairman J. Hari Narayan with ICICIPru CEO and managing director Shikha Sharma in New Delhi on Wednesday. Picture by Ramakant Kushwaha

New Delhi, Dec. 3: Terror insurance pool in the country is set to go up following the Mumbai attack though it is not clear whether this will lead to a higher premium.

According to the Insurance Regulatory and Development Authority (Irda), the terror insurance corpus now stands at Rs 750 crore.

“When more members of the insuring community perceive the need of insurance against terrorist activities, the pool will go up,” Irda chairman J. Hari Narayan said.

“The rate of premium on terror insurance will depend on specific products, but by itself there is no reason for premium rates to go up,” he said.

Sources said the pool, created about four years ago and managed by the General Insurance Corporation, would touch the Rs 2,000-crore-mark in the next few years.

Public sector general insurers contribute their premium from terror cover to the pool. The PSU insurers offer terrorism cover as an optional facility along with fire insurance.

Private insurers, on the other hand, offer a built-in facility.

“We offer personal accident cover with built-in terror insurance. For property insurance, terror cover is optional. Suitable additional premium needs to be paid to include terrorism risk in the policy,” said Swaraj Krishnan, CEO of Bajaj Allianz General Insurance.

Irda said it was working on guidelines for mergers and acquisitions with the Institute of Actuaries. It is expected to finalise the norms by March next year.

Narayan said the regulator was exploring the possibility of insurers outsourcing their non-core activities.

In October, the Union cabinet approved changes in insurance laws, proposing to raise the foreign direct investment limit in firms to 49 per cent from 26 per cent.