There is also a plan to create a pool from which premiums can be paid to companies so that delay of claims settlement is avoided. These are some of the proposals mooted by the Centre to undertake the necessary changes in Prime Minister Fasal Bima Yojana (PMFBY) guidelines as it plans to roll out the provisions in this kharif season. “The premium rose to 60% for one crop in a district during last year kharif. If states agree, a maximum limit on premium can be fixed and companies will have to quote below that,” a government official said. If no company participates in the premium bidding process, that crop may be taken off from the insurance list, he said, adding a decision will be based on the feedback from the states which are expected by this week. The gross premium collected by insurance companies has been increasing every season in past three years (see chart) while the number of insured farmers are either constant or have declined. This puts a question mark on the quotations of the insurance companies. In the last three kharif seasons, the country had faced normal and close to normal monsoon in two years while another year was 9% below normal. But, due to a good distribution of rainfall, the country had record production of foodgrains in 2018-19. The government has also proposed to create a pool or trust of the premium money collected by the Centre, states and farmers, which were so far been given to the insurance companies. Whenever there will be claims made by farmers, it will be settled from the money drawn from the pool, the official said. The fund collected may be managed by a public insurance company, he added. “The main objective is to ensure timely payment of claims,” he said, adding this may also dispel the notion that insurers are profiteering at the cost of farmers. Meanwhile, insurance claims worth Rs 9,046 crore (out of about Rs 13,500 crore claims made) have been paid to 80 lakh farmers for the kharif 2018 season under both the PMFBY and Restructured Weather Based Crop Insurance Scheme (RWBCIS), the government said on Tuesday. The PMFBY, which has a 90% share in the total crop insurance business, was launched in kharif 2016 under which farmers pay a fixed premium of 2% and 1.5% of the sum insured for kharif and rabi seasons, respectively. The premium for cash crop is 5%. The premium is decided through tender seeking quotations from the companies before the start of the sowing season. After deducting the farmers’ share, the remaining premium is paid to the insurers by the Centre and states in 50:50 ratio. Source - https://www.financialexpress.com