Page 26 - Insurance Times July 2022

Option has been given to the States to choose the including geo-coding (providing the latitude and longitude
notional value of average yield or the Scale of Finance of the CCE location). One of the major reasons for states
as sum insured in the interest of the farming community. opting out or delaying paying their share of premium is
financial constraints. The premium rates have increased
In view of the demand of many States, option has been
from 11.6 per cent in kharif 2015 to 12.5 per cent currently.
given to States to choose additional risk covers besides
For many states, paying the premium subsidy is a huge cost.
shortfall in yield-based cover depending upon the local
For example, the total PMFBY premium subsidy to be paid
weather challenges and requirements of the farmers.
by Rajasthan in 2020-21 was Rs 2,822.7 crore, which formed
Insurance Companies to pay 12% interest to farmers for
25 per cent of the state's agriculture budget that year.
delaying claim payment beyond prescribed timelines.
Similarly, penalty of 12% interest per month shall be
levied on State Government if failing to release state
share of premium subsidy within 3 months of requisition
by concerned Insurance Company. States delaying the
release of subsidy beyond stipulated timelines cannot
participate in upcoming seasons.
A two-step process of crop yield estimation using
weather and satellite indicators etc. is adopted, which
will help in early assessment of loss.
Use of smart sampling technique through satellite data
for crop cutting experiments by some states has shown
increased efficiency in implementation. This will now be
universalized.
The delay by some States in submission of crop yield
Restructured Weather Based Crop
data will now be suitably addressed using technological
solutions. Insurance Scheme (RWBCIS)
Provision has been made for earmarked administrative With the objective to provide coverage for those crops for
expenses @ 3% for strengthening infrastructure and which there is no standard/ approved methodology for
technology for better delivery of the Scheme. assessment of yield and to overcome the shortcoming under
erstwhile NAIS, a pilot Weather Based Crop Insurance
The 2020 revamped operational guidelines of the scheme Scheme (WBCIS) was launched in 20 States (as announced
also said that "Disputes on the quality of yield data is a in the Union Budget 2007-08). However, WBCIS was
challenge in the effective implementation of the scheme" implemented as a full-fledged component scheme of the
and mandated that the CCE process must be digitised, National Crop Insurance Programme (NCIP) from Rabi 2013-
14 season to Rabi 2015-16.

WBCIS intends to provide insurance protection to the
farmers against adverse weather incidence, such as deficit
and excess rainfall, high or low temperature, humidity etc.
which are deemed to impact crop production adversely. It
has the advantage to settle claims within the shortest
possible time. Under WBCIS, actuarial rates of premium
were charged. The scheme has further been restructured
on the basis of premium structure and administrative lines
of PMFBY and is available in the country from Kharif 2016
as Restructured WBCIS.

Coconut Palm Insurance Scheme (CPIS)
The Coconut Palm Insurance Scheme (CPIS) has been

26 The Insurance Times, July 2022