The Centre is actively considering proposals of four public sector general insurance companies to be part of the Pradhan Mantri Fasal Bima Yojana (PMFBY) launched this year.
Currently, the Agriculture Ministry has empanelled 11 private sector companies and state-owned Agriculture Insurance Company (AIC) to implement the new scheme.
"The four state-owned Oriental Insurance Company, New India Assurance Company, National Insurance Company and United India Insurance Company have sent the proposals to participate in the scheme. We are actively examining them," a senior Agriculture Ministry official said.
A meeting with the four public insurers was held last week on this issue, the official said.
Both public and private insurers are being encouraged to create healthy competition for better implementation of the scheme. All claim liability is on insurer and the Centre will give upfront premium subsidy, the official added.
Besides PMFBY, these insurers will also sell Weather-based Crop Insurance Scheme (WBCIS).
As of now, 11 states — Andhra Pradesh, Telangana, Madhya Pradesh, Uttar Pradesh, Odisha, Chhattisgarh, Gujarat, Himachal Pradesh, Jharkhand, Uttarakhand and West Bengal — and one Union Territory Andaman and Nicobar Islands have notified the PMFBY, as per the ministry’s data.
For instance, in Gujarat, Bajaj Alliance and HDFC-ERGO have won the bids to sell the PMFBY in the state for 2016 kharif season. Similarly, states which have notified the scheme have selected insurers through the tendering process.
The Centre has released about Rs.3,000 crore to expedite settlement of claims for the kharif 2016 season.
It may be noted that PMFBY replaces the existing two schemes National Agricultural Insurance Scheme and Modified NAIS, which have had some inherent drawbacks.
Under the PMFBY, farmers’ premium has been kept lower between 1.5-2 per cent for foodgrains and oilseed crops and up to 5 per cent for horticultural and cotton crops.
There will not be a cap on the premium and 25 per cent of the likely claim will be settled directly in farmers’ accounts.
The new scheme aims to increase the insurance coverage to 50 per cent of the total crop area of 194.40 million hectares, from the existing level of about 25-27 per cent.