The Indian government has released new operational guidelines for its flagship Pradhan Mantri Fasal Bima Yojana (PMFBY) agriculture insurance scheme, which includes a penalty clause for states and insurance companies for any delay in the settlement of claims.
Under the new guidelines, farmers will be paid 12% interest for any delay in claims settlement beyond two months of the payment deadline. On the other hand, state governments will have to pay 12% interest for the delay in the release of the state's share of premium subsidy beyond three months of the prescribed cut-off date.
The new operational guidelines will come into effect from the rabi (winter) season which commences on 1 October and has included perennial horticulture crops and crop loss due to wild animal attacks on a pilot basis. The guidelines also cover hailstorms, unseasonal and cyclonic rainfall which would be considered for assessing post-harvest losses. Apart from this natural fire, landslide, inundation and cloudburst have been included in localised calamities.
The new guidelines also detail a standard operating procedure for evaluating insurance companies with the option of removing them from the scheme if they were found ineffective in providing services.
Insurers will have to undertake awareness campaigns and have been given a target of enrolling 10% more non-loanee farmers than in the previous corresponding season. Insurance companies will now have to mandatorily spend 0.5% of gross premium per company per season for publicity and awareness of the scheme.
Meanwhile, Asia Insurance Review’s 5th Asia Agriculture Insurance Conference, which has the theme “The future of agro insurance – impact of climate change, technology and inclusive insurance”, is being held in New Delhi. The two-day event, which starts today, is attended by 125 delegates from 10 countries.