IRDA permits micro insurance agents to sell government insurance products

IRDAI has permitted micro-insurance agents to solicit and market crop insurance schemes like Pradhan Mantri Fasal Bima Yojana (PMFBY). It is for some time that IRDA has been receiving request from some stakeholders to categorise government-sponsored crop insurance schemes as micro-insurance products irrespective of the amount of sum insured under the individual policy. Under IRDAI (Micro Insurance) Regulations 2015, the maximum amount of cover for crop insurance is fixed at Rs 1 lakh per cover. Now, micro insurance agents can sell to the non-loanee farmers the (three) government sponsored crop insurance schemes offered by an insurer which covers the crop of the policyholder, over the area of the insured field. However, the sum insured/premium/premium rate per crop/ unit area/tree, as the

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Crop Insurance coverage faces problems in fertile Punjab

Pradhan Mantri Fasal Bima Yojana, touted as one of the most farmer-friendly crop insurance schemes of independent India has some opposition from fertile Punjab region. With more advanced agriculture sector with more mechanization and canal fed irrigation and increased power subsidy, agriculture in Punjab is different from rain fed agriculture of other state. The current insurance scheme provides an indemnity level of 90 per cent. In Punjab, the average loss of major crops, wheat and paddy, is between two per cent and three per cent. So Punjab farmers will not benefit from this scheme and has request the indemnity level be raised to 95 per cent. Further, with increased mechanization, the crops are harvested immediately and transport in a short time and hence the farmers have requested in

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Union government approves Prime Minister Crop Insurance Scheme

Union Government has approved Pradhan Mantri Fasal Bima Yojana to provide a social security net to millions of farmers across the country, who have been reeling under the impact of two consecutive droughts. The scheme will have low premiums as low as 1.5 per cent of the sum insured. There will be a premium of two per cent of the sum insured from farmers for all kharif crops and 1.5 per cent for rabi crops. For horticulture crops, the annual premium will be five per cent of the sum insured. The balance premium would be paid by the government to the insurance companies. This would be shared equally by the Centre and state governments. Currently, the average premium for all foodgrain crops was as high as 15 per cent, while for horticulture crops, it was even higher. Digital Initiative is a

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Central Government revamps crop insurance policy

Central Government has proposed a new policy to provide a safety net to growers of pulses to boost production. New crop insurance policy has reduced the premium on pulses at two per cent of the sum insured. Earlier the farmers have to anything in between 5-6 percent of the sum insured. The new scheme also reduced premium for non-horticultural products to 2-3% The difference between the actual premium charged by the insurance company and what the farmer pays will be subsided by the Centre. The scheme would be a combination of weather-based and yield-based insurance for crops. The financial burden on insurance companies would also be minimised as participants would be invited through open tenders conducted by the state governments.

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Crop Insurance coverage is just one-fifth in India

Awareness of Crop Insurance is very less in India. Less than 20% of farmers have insurance coverage according to a study. Among 80% of farmers who have opted crop insurance 34% of them are not aware of other insurance products. Around 24% believe that insurance facilities are not available to them. So far only 32 million farmers have opted for crop insurance coverage. The above indicate technical issues in design, reach and other aspects which need to be addressed. To address the problems, the government is piloting a modified National Agricultural Insurance Scheme (NAIS), a market-based scheme with involvement from the private sector.

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Agriculture Insurance in India

Agriculture in India is fraught with risks like crop disease, pest attack, reduction in output, draughts and floods. Crop insurance will go a long way in mitigating the risk. However, several schemes have been launched and discontinued due to extreme risk factors and huge loss to insurance companies. However, the Government introduced ?National Agricultural Insurance Scheme? (NAIS) in 1999-2000 by Agriculture Insurance Corporation of India. It covers all food crops (cereals and pulses), oilseeds, horticultural and commercial crops. It covers all farmers, both loanees and non-loanees, under the scheme. The premium rates vary from 1.5 percent to 3.5 percent of sum assured for food crops. In the case of horticultural and commercial crops, actuarial rates are charged. There is a 50% subsidy pr

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