States allowed to form insurance firms to offer govt crop insurance scheme

The central government is allowing states to set up their own insurance companies to implement the Prime Minister's Crop Insurance Scheme (Pradhan Mantri Fasal Bima Yojana [PMFBY]), a senior Agriculture Ministry official has said.

The move follows requests from several states as well as observations made by Comptroller and Auditor General (CAG) in its 2017 report that old crop insurances schemes which have now been merged with PMFBY, had been poorly implemented during the years 2011-2016, reports Press Trust of India.

At present, five public sector insurers and 13 private insurance companies are empanelled to offer the scheme, the official said. The public insurers are Agriculture Insurance Company of India, United India Insurance, National Insurance, Oriental Insurance and New India Assurance.

Launched in April 2016, PMFBY provides comprehensive crop insurance from the pre-sowing to the post harvest stage against non-preventable natural risks at premiums that are low to cater to farmers. The premiums are subsidised heavily, with the sunsidies borne equally by the central government and the state. Claims are settled on the basis of yield loss assessed at the end of the crop season.