The Pradhan Mantri Fasal Bima Yojana is likely to see a higher interest from private general insurers, with one authority to implement the scheme and availability of localised risk coverage. Insurance companies feel this will be beneficial since, unlike earlier where there was a claim subsidy, this scheme would offer premium subsidy and be more affordable for farmers. Last week, the Union Cabinet approved the scheme. A uniform premium of two per cent is to be paid by farmers for all kharif crops and 1.5 per cent for all rabi crops. For annual commercial and horticultural crops, it will be five per cent. The rest of the premium will be paid by the government, with no upper limit on the subsidy. Insurance executives said, by contrast, the Modified National Agricultural Insurance Scheme (MNAIS) had a high premium rate and farmers could not afford it. “There were multiple schemes — NAIS, MNAIS and weather-based crop insurance — with different implementing authorities. Now, with one scheme, it will be easier for us to be a part of it, since it covers almost all conditions,” said the chief executive of a mid-size private general insurer. Further, companies said, as all states have been asked to implement it, insurers will find it easier to be a part of the scheme. Sanjay Datta, chief of underwriting and claims at ICICI Lombard General Insurance, said they’d be keen to join. Adding of catastrophic events to this cover, such as protection from cyclone impact, would be beneficial. It is anticipated that there would be clusters formed of districts to implement the scheme. Senior officials said how these were classified would define how the premiums would be fixed. Insurers would wait for the contours of the classification before deciding to join. Anuj Tyagi, member of the executive management at HDFC ERGO General Insurance, said as farmer premiums would be down, the uptake of policies would be high. Use of technology being mandatory would improve operational efficiencyThe Pradhan Mantri Fasal Bima Yojana is likely to see a higher interest from private general insurers, with one authority to implement the scheme and availability of localised risk coverage. Source - business-standard.com