Centre plans to modify crop insurance scheme
by Nidhi Bhati
The government is planning to modify the crop insurance scheme to diversify risk and lower the premium, a government official told Economic Times. A risk pool for claim settlement is being considered. Under the proposed pool, insurance companies will keep 20 per cent of the premium and hive off the rest to the pool. An insurance company, preferably Life Insurance Corporation (LIC), will manage the pool, the official added. The need for the pool has come up as the insurance premium this year has gone up almost 50 per cent compared with the average of the past four years because of non-participation of nine empanelled companies. The official further elaborated that five private insurance companies ICICI Lombard, Tata AIG, Cholamandalam MS, Royal Sundaram and Shriram General Insurance had opted out of crop insurance business while four public sector insurance companies New India Assurance, United India Insurance, National Insurance and Oriental Insurance ran out of contention owing to higher bids.