Securing farmers, insurance companies to pay 12% interest for delay in settlement claims under revised PMFBY
New Delhi, September 19: The central government has been working on providing the farmers with all the necessary provisions with the aim to double their income by the year 2022. Chalking out more beneficiaries to the farmers, the government has decided to incorporate provisions of penalties for state and insurance companies for delay in settlement of insurance claims under the Pradhan Mantri Fasal Bima Yojana. The new operational guidelines come at the onset of the rabi season, which starts from 1st of October.
The government has placed new provisions as part of the new operational guidelines for the implementation of Pradhan Mantri Fasal Bima Yojana (PMFBY). Under this revised guideline, the insurance companies will be liable to pay 12% interest to the farmers for the delay in settlement claims beyond two months of prescribed cut-off date. State Governments will have to pay 12% interest for the delay in the release of the State share of subsidy beyond three months of prescribed cut-off date submission of requisition by insurance companies.
The new guidelines state that the Standard Operating Procedure will work for evaluation of insurance companies and can remove them from the scheme if found ineffective in providing services. The Government has also decided to include recurrent horticultural crops under the ambit of PMFBY on a pilot basis. The scheme also provides add-on coverage for crop loss due to the attack of wild animals, which will be implemented on a pilot basis. Aadhaar number will be mandatorily captured to avoid duplication of beneficiaries.
In order to ensure that more non-loan farmers are protected under the scheme, apart from various awareness activities, the insurance companies are given a target of enrolling 10% more non-loan farmers than the previous corresponding season. The insurance companies will have to mandatorily spend 0.5% of gross premium per company per season for publicity and awareness of the scheme.
The much-demanded rationalization of premium release process has been incorporated in the new guidelines. Balance premium will be paid as a second installment based on the specifically approved business statistics on the portal for settlement of claims. The final installment will be paid after reconciliation of entire coverage data on portal based on final business statistics. This will reduce the delay in settling the claims of farmers.