News Non-Life03 Aug 2018

India:Insurers to pay farmers interest for delay in claim payouts

03 Aug 2018


The government has said that insurance companies, which fail to clear claims for crop loss within two months, will have to pay interest to farmers, reflecting how delay in settling claims remains a major concern.

“Even the state governments will have to pay interest to farmers if they (the states) delay their shares (of premium),” said agriculture minister Radha Mohan Singh in Lok Sabha which is the lower house of Parliament.

Responding to members’ concerns over delay in the payment of claims to farmers under the government backed crop insurance scheme, Pradhan Mantri Fasal Bima Yojana (PMFBY), Mr Singh said, “We are going to make these two reforms.” His comments were reported by Times of India.

He also told the House that the government had taken a number of measures that already reduced the claim period from one year to six months.

According to agriculture ministry data, claims amounting to INR105.05bn ($1.54bn) and INR59.9bn have been estimated for the kharif 2016 (monsoon crop) and rabi 2016-17 (winter crop) season, respectively. The ministry claimed that claims of INR102.8bn and INR50.5bn respectively had already been paid for these seasons.

 

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