Indian insurers to shoulder interest payments of delayed rural claims

Companies failing to clear crop loss claims within 2 months have to pay with 12% interest.

The government announced that Indian insurance companies that fail to clear farmers’ claims for crop loss within a period of two months have to pay it with 12% interest, reports The Times of India.

“Even the state governments will have to pay interest to farmers if they delay their shares,” Union agriculture minister Radha Mohan Singh in Lok Sabha told local media.

Over 27 states and union territories are enrolled in the Pradhan Mantri Fasal Bima Yojana (PMFBY) scheme.

Launched in 2016, PMFBY is an actuarial premium based scheme requiring farmers to pay a maximum premium of 2% for Kahrif, 1.5% for Rabi food and oilseed crops and 5% for annual commercial crops. The remaining part of the premium is shared by the Centre and the state government.

Although the number of farmers insured under the PMFBY scheme has reportedly increased, the delay in settling their claim remains a major cause of concern.