Lok Sabha Question No. 1514 (UNSTARRED), answered on 2020-02-11
Subject: Rejection of Crop Insurance Claims
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Sushil Kumar Singh

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO.1514

TO BE ANSWERED ON THE 11 TH  FEBRUARY, 2020

## REJECTION OF CROP INSURANCE CLAIMS

1514.  SHRI SUSHIL KUMAR SINGH:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether  there  is  an  increase  in  the  number  of  rejection  of  claims  in  various  crop insurance schemes by the private sector insurance companies;
- (b) the number of insurance claims made by the farmers, the number of claims that were accepted and the number of claims that were rejected from January 2015 to December 2019, year-wise, State-wise and insurance company-wise;
- (c) whether the private companies have complied with the clause of returning the premium amount of farmers in the circumstances wherein the companies end up rejecting the claims of the farmers;
- (d) if  so, the total monetary value of premium returned to the farmers, State Governments and the Union Government respectively from the year 2015 to December 2019, year-wise and insurance company-wise; and
- (e) if not, the reasons therefor and the actions taken by the Government in this regard?

## ANSWER

MINISTER  OF AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी (SHRI NARENDRA SINGH TOMAR)

- (a) & (b): No Sir. As per scheme provisions, farmers are indemnified to the extent/percentage of crop losses against the defined Threshold Yield multiplied by sum insured as decided by the State Government. Claim amount for wide spread calamites are calculated based  on  the  yield  data  arrived  from  requisite  number  of  Crop  Cutting  Experiments  (CCEs) conducted  by  the  concerned  State  Government.  Claims  per  hectare  are  worked  out  as  per following formula:

Threshold Yield (TY) - Actual Yield (AY)

----------------------------------------------------  X  Sum Insured

Threshold Yield (TY)

Where Threshold Yield for a crop in a notified insurance unit is the average yield of best 5 years out of past seven years multiplied by applicable indemnity level for that crop.

However, losses due to localized risks of hailstorm, landslide, inundation, cloud burst & natural fire and post-harvest losses due to unseasonal rains/cyclone/hailstorms are calculated on individual insured farm basis.   Hence, farmers have to intimate the loss of their crops to the insurance  company/State  Government/  financial  institutions  within  72  hours  of  these  losses. Further 48 hours have been provided for, intimation by State Government/financial institutions to the  insurance  companies.    These  claims  are  assessed  by  a  joint  committee  comprising representatives of State Government and concerned insurance company.

However,  there  is  no  need  to  file  the  crop  loss  information  as  the  claims  are  being calculated on the basis of shortfall in yield at the end of season, prevented sowing and for on account payment. These claims are settled on the basis of Area Approach and yield data/crop damage report provided by concerned State Government.

Therefore, insurance companies have a little role in rejection of claims under the scheme. State-wise  number  of  intimation  of  crop  losses  for  individual  farm  level  claims  are  being collected.

However, Government undertakes close monitoring of the scheme and resolve the yield data related issues for calculation of claims between State Governent and insurance companies through Technical Advisory Committee (TAC) at Central level.

(c) to (e): As per  provisions  of  the  PMFBY  banks  remit  the  premium  to  insurance companies within stipulated cut-off date and submitt the individual farmer-wise details within 15 days after the cut-off date and upload requisite details of individual farmers within 15 days after the cut off date on National Crop Insurance Portal (NCIP).   Similarly, non-loanee farmers can also enrol themselves either directly on the portal or through Common Service Centres (CSCs), banks, insurance intermediaries etc. on the NCIP and they have to upload the requisite detailed information  and  documents,  Aadhar  Number  and  remit  the  premium  to  concerned  Insurance Companies.  At the time of reconciliation of premium  and  data  sent by the financial institutions/CSCs/  intermediaries,  if  there  is  any  mis-match  between  premium  and  individual farmer's data, the excess premium is returned by the insurance companies to the concerned financial  institutions.  Further,  insurance  company  also  processes  the  applications  and  the requisite documents submitted by the farmers, especially non-loanee farmers.  If the application or  documents  are  not  correct/duplicate  documents,  they  reject  the  application  and  return  the premium  in  such  cases.  Such  incidences  are  reported  in  some  States  in  respect  of  some seasons. State-wise/Company-wise details of premium returned to the farmers from inception of the PMFBY are being collected.

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