Lok Sabha Question No. 388 (UNSTARRED), answered on 2020-02-04
Subject: Insurance Claims under PMFBY
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Uttam Kumar Nalamada Reddy

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE

## DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO.388

TO BE ANSWERED ON THE  4 TH  FEBRUARY, 2020

## INSURANCE CLAIMS UNDER PMFBY

## 388.   SHRI UTTAM KUMAR REDDY NALAMADA:

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

- (a) the total amount owed to farmers by insurance companies under the Pradhan Mantri Fasal Bima Yojana;
- (b) the  number  of  complaints  received  regarding  delayed  payment  of  claims  by  the insurance companies to beneficiaries;
- (c) the details of action taken on the basis of these complaints and the penalties imposed on insurance companies; and
- (d) the steps taken to ease and streamline the process of claiming insurance for farmers?

## ANSWER

## MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी ( SHRI NARENDRA SINGH TOMAR)

- (a): Details of  claims reported, claims approved and paid by insurance companies  to the farmers since inception of the scheme are given below :

(Rs. in crore)

| Year     |   Claims Reported |   Claims Approved |   Claims Paid |
|----------|-------------------|-------------------|---------------|
| 2016-17  |             16774 |             16774 |         16768 |
| 2017-18  |             21926 |             21858 |         21816 |
| 2018-19* |             23176 |             20915 |         20015 |

(b) & (c) : During  implementation  of  the  scheme,  some  complaints  about  non-payment and delayed payment of claims; under payment of claims on account of incorrect/delayed submission of insurance proposals by banks; discrepancy in yield data, unrealistic assessment of crop loss due to large unit area of insurance; delay in providing Government share of funds etc., have been received in the past in the country.   Most of the complaints were suitably addressed by the concerned State Government, Insurer and the Ministry.

As  per  provision  of  Revised  Operational  Guidelines  of  the  scheme,  insurance companies have to pay penal interest @ 12% per annum to farmers for late settlement of claims subject to certain conditions.   Government has imposed interest penalty of Rs. 3.30 crore, Rs. 0.09 crore, Rs. 0.51 crore, Rs.0.15 crore and Rs. 0.16 crore has been imposed on Agriculture Insurance Company  of  India Ltd., Cholamandalm-MS  General  Insurance Company  Ltd.,  ICICI-Lombard  General  Insurance  Company  Ltd.,  New  India  Assurance Company  Ltd.  and  SBI  General  Insurance  Company  Ltd.  respectively  vide  letter  dated September 25, 2019.   In reply they have submitted their explanations requesting for review. A  meeting  has  been  called  to  discuss  the  explanations  submitted  by  the  insurance companies.

Apart  from  this,  State  Governments  have  been  advised  to  impose  penalities  on insurance companies themselves.  Accordingly, some State governments like Uttar Pradesh, Gujarat  and  Haryana  have  also  imposed  penalty  on  insurance  companies  for  nonperforamnce of certain provisions of the scheme and have deducted the penalty from State share of premium subsidy to insurance companies.

Further, a provision  of  Stratified  Grievance Redressal Mechanism viz. District Level Grievance  Redressal  Committee  (DGRC),  State  Level  Grievance  Redressal  Committee (SGRC) has been made in the Revised Operational Guidelines of the Scheme to resolve such complaints.    Accordingly, 13 States/Union Territories have notified the District/State level grievance redressal committees in their respective States.

(d): As  per  provisions  of  PMFBY,  farmers  do  not  need  to  file  claims  in  respect  of  wide spread calamities like drought, flood etc.  Claims are worked out and paid by the insurance companies based on the yield data, per unit area, furnished to the insurance company by the concerned  State  Government.    However,  farmers  have  to  intimate  to  the  insurance company/State Government/ financial institutions with 72 hours of the loss.  Further 48 hours have been provided for, intimation by State Government/financial institutions to the insurance companies.

To  bring  down  the  claim  settlement  time,  many  steps  in  addition  to  regularly monitoring  the  implementation  of  PMFBY,  have  been taken  by  the  Government.      These steps include use of imporved technology like CCE Agri App/smartphone for collection and dissemination  of  information  relating  to  Crop  Cutting  Experiments  (CCEs),  revision  of Operational Guidelines wherein provision has been made for timely release of State Govt. share in 3 instalments and settlement of claims by insurance companies without waiting for final/3 rd installment  of  premium  subsidy  by  the  States  and  advancement  of  15  days  in seasonality discipline for early settlement of claims. Penalty provisions for late settlement of claims by insurance companies and late release of funds by State Governments have also been stipulated under these guidelines.

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