Ahead of the new crop insurance scheme's rollout from next month, government today warned the sector to be ready to pay penalties in case of delays in settling claims.
"Not that they weren't earlier, but at this point of time, in this particular scheme, we are looking at penalties on delays," Financial Services Secretary Anjuly Chib Duggal said at a seminar on the Pradhan Mantri Fasal Bima Yojana (PMFBY) at the Nabard headquarters here.
"That is something that works to ensure that from the bottom-up, there is a greater degree of responsiveness at every stage," she said.
Speaking before an audience comprising over 160 representatives from the insurance sector and banks, she said there is a need to adhere to the "seasonality discipline" and that there have been delays in the earlier variants of the crop insurance scheme.
The delays in the functioning of the scheme stem from various factors, including delays in crediting the premiums to the insurance companies and also settling claims, which ultimately cause difficulties to the farmers.
"Through the seasonality discipline, we are going to be plugging it. It is something that is going to be computerised, there is going to be no delay in sending consolidated proposals to insurers, no delays in settling claims, there are time-frames that are set up," she said, speaking days ahead of the rollout of the PMFBY from April 1.
The government is targetting to raise the coverage of crop insurance to 50 per cent from the present 20 per cent in the next three years through the scheme.
Insurance regulator Irdai has prescribed time limits for settling all the claims and there are provisions of penalties for delays for existing products as well.
