Govt penalizes insurers for delay in settling crop insurance claims

Govt penalizes insurers for delay in settling crop insurance claims

News

1. Government has proposed new guidelines for Pradhan Mantri Fasal Bima Yojna (PMFBY) to be implemented from upcoming Rabi season
2. Need for renewed guidelines

• Decline in enrollment of farmers under the scheme which is down by 15% from its inception
• Delay in claim settlement to farmers by insurance companies
• Delay by States, in giving their due share of premium

3. Guidelines for insurance firm

• Insurance firms to pay farmers 12% penal interest for delayed claim settlement
• Insurance firms can be removed from scheme for non-performance
• Each insurance company will have to mandatorily spend 0.5% of gross premium per person for publicity and awareness of the scheme

4. Guidelines for state government

• 12% penalty for state government for delay in paying premium, subsidy share to the firms

5. Guidelines for farmers

• Revamped scheme will now cover a wider variety of risks, such as hailstorms, cloudbursts and cases of fire destroying crops
• Farmers will also get more time to inform the government about individual losses—from 48 hours earlier to 72 hours after crop damage.