The country’s insurance regulator — IRDA — is actively considering the use of satellite remote sensing technology as a mapping tool for agricultural yield estimation and crop losses in a bad monsoon year. The move, aimed at ensuring faster settlement of crop insurance losses, comes at a time when the country has experienced back-to-back monsoon failures — the first since 1986-87. IRDA has concluded a series of discussions with stakeholders in this regard, officials indicated. A number of research studies and experiments are also being undertaken by institutions associated with agriculture and rural development throughout the country, they said, adding that the use of this technology should mark a move towards speedy assessment and settlement of crop losses. The just-ended south-west monsoon season had registered an overall rainfall deficit of 14.3 per cent relative to the ‘normal’ long period average for June-September, making it a deficient monsoon. The monsoon was also deficient by 11.9 per cent in 2014 as well. At present, about 50 crop insurance products are being marketed by the Agriculture Insurance Company of India Ltd (AICIL) and other general Insurance Companies. One of the main reasons for low levels of insurance penetration in crop insurance is the lack of awareness about the insurance products and the benefits of various policies. AICIL, at present, transacts only in crop insurance business while other policies covering various risks pertaining to farmers such as agriculture implements, personal accident and livestock are extended by other general insurance companies. There are underlying problems of wholly inadequate crop insurance system, though, that do not adequately cover the risks of farmers. The existing weather and yield-based systems taken into account only the area and not the individual as a unit. As a result, this approach did not seem to represent and address the manner in which crop damage actually occurs. If crop insurance products were to be tailored to cover for a range of risks at the individual farmer level, insurance premium would inevitably increase and might need some amount of subsidy, but it could make crop insurance a more viable proposition and improve its penetration. In a bid to ensure a balanced penetration of insurance coverage in the country, the insurance regulator had come out with a regulatory framework in the form of IRDA (Obligations of Insurers to Rural or Social Sectors, 2002). Recently, it had also formulated a draft regulation — IRDAI (Obligations of Insures to Rural and Social Sectors) Regulations, 2015—in the wake of the amendments brought about to the Insurance Laws (Amendment) Act 2015, which imposed obligations on insurers towards providing insurance cover to the rural and economically weaker section of the population. The regulation mandated that the insurers had to necessarily sell a specified percentage of policies and underwrite specified percentage of gross premium underwritten with respect to life and non-life insurance companies respectively. Stringent penalties were also prescribed under the Act for non-compliance of the above provision. Source - http://indianexpress.com