Insurers ditched Kerala farmers in FY18; floods add to their woes

Companies hold two-day meet to discuss claim settlement process.

New Delhi: Insurance companies involved in crop insurance schemes have not paid even a single penny to farmers in Kerala for financial year 2017-18. It could get even worse this fiscal as an estimated 50,000-55,000 hectares of agricultural land have been destroyed in floods and initial projections put the loss at around Rs 1,000 crore.

According to top sources in the agriculture ministry, over 46,000 farmers were insured in 2017-18 for their crop damages in the Pradhan Mantri Fasal Bima Yojna (PMFBY), but none has got any claim till date.

A senior official told FC, “Over 77,400 Kerala farmers insured their crops in 2016-17 and only 23,300 got their insurance claim. This brought down the number of farmers taking insurance under PMFBY to only 46,136 in FY18.”

“The situation this year could be worse as around 50,000-55,000 hectares of agricultural land have reportedly been destroyed in floods and the initial estimates put the loss at around Rs 1,000 crore,” he added.

PMFBY aims at providing financial support to farmers suffering crop loss and damage because of unforeseen events. “For crop insurance, it is likely that insurers will use geo-satellites to assess the extent of damages and pay claims accordingly,” a ministry source said.

As per the government estimates, nearly 91.5 lakh farmers in the country were registered under the insurance scheme in 2016-17, which in the following year (2017-18) dropped to 60.1 lakh, recording a dip of 33 per cent. Sources said state-owned general insurance companies have been instructed to settle claims under the Jan Suraksha insurance schemes as well as Fasal Bima crop insurance on an immediate basis in Kerala.

The insurance schemes include the term insurance scheme under Pradhan Mantri Jeevan Jyoti Bima Yojana as well as the personal accident scheme under Pradhan Mantri Suraksha Bima Yojana.

Following the strict orders issued last week by the government, all insurance companies involved are learnt to have decided to hold a two-day meeting on Tuesday and Wednesday.

“They will, however, discuss the claims settlement process, mostly for the farmers who were affected by floods in Kerala and its neighbouring states altogether,” a source said.

The government on last Saturday directed speedy settlement of claims under its life insurance, general insurance and crop insurance schemes in flood-hit Kerala.
State-run insurance companies have set up helplines for speedier settlement of claims in the flood-hit state.

It is also likely that little or no documentation will be required for claims under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY), which are the life and personal accident insurance schemes sponsored by the central government.

“The insurers will meet and discuss what will be the basic documents required for claims settlement. In cases of death where the body has not been recovered, a letter from a local authority could be a valid proof,” a source added.

“Given that several areas are still cut-off due to flooding, insurers could also tie up with local auto manufacturers and dealers to expedite the process of claims settlement for motor insurance. Basic repairs and replacements will be done locally,” said another official from Oriental Insurance.

Most parts of Kerala are inundated after heavy rains hit the state. Many people were displaced and massive losses to property, crops, vehicular transport and hou-sehold durable items reported from across the state. This will include the uniform process to be followed for the claims and the pro-cess to be followed in case of absence of documents.

“The claims process will have to be streamlined to ensure that they are settled expeditiously. A similar one to the mechanism followed during the Assam and Chennai floods will be used for the Kerala floods,” said a senior official of a public sector insurance company without giving any claim details caused by the floods.

Irdai has asked companies to nominate a senior officer who would act as a nodal officer for Kerala and Karnataka for coordinating and expediting the settlement of claims. The insurers will also have to submit a weekly report on the claims to the regulator.

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