Reliance General Insurance not paying PMFBY claims for Kharif 2021: Top
“In 2021, insurance companies have already received premium amount of Rs 2,312.22 crore. Accordingly, all insurance companies except Reliance General Insurance Company have started crediting the amount of local calamity and mid-season adverse claims in the bank account of the affected farmers”, read the letter written by Maharashtra Agriculture Commissioner Dheeraj Kumar.
Countering the allegations, the insurer, responding to a query by Business Standard, said it has a long-term contract (3 years) with the Maharashtra government to implement PMFBY, as per the operational guidelines issued by the Government of India. As per these guidelines, the applicable premium subsidy needs to be released to meet the deficit. Due to non-receipt of payment, the commitment of the company to the reinsurers and subsequent claim recovery has been affected.
The company said that in several of its communications, it has requested the Agriculture Department, Government of Maharashtra and the Ministry of Agriculture and Farmers Welfare to release the long pending subsidy so that it can meet the farmer’s claims expeditiously with due support from its reinsurers .
Earlier, the private insurer had raised complaints regarding excessive delay in the first season and non-receipt of premium subsidy. In a letter to the CEO of PMFBY, Reliance General Insurance said, the eligible claims for Kharif 2020 and Rabi 2020-21 will be raised to Rs 156 crore for Kharif 2020 and Rs 34 crore for the state due to non-receipt of the overdue portion of the subsidy. The reason has been stopped. Rabi 2021 season. Also, since the state’s share has not been released, the concerned central government’s share has also not been released. As a result, the total premium outstanding over the previous season is Rs 355 crore.
Hence, it has not settled the claims for Kharif 2021 season. Reliance General Insurance has received Rs 430.59 crore as first installment premium for Kharif 2021 season and wants to adjust it against the state liability of premium subsidy for the previous season so that the balance amount can be settled admissible claims of farmers .
“We are of the view that unilateral and arbitrary attempts to delay release of premium/claims payable would set a wrong precedent, there would be potential issues of compliance with reinsurers, regulators and future participation in the scheme apart from hindering effective implementation of PMFBY. There will be a lack of commitments for the insurer”, the insurer said in its letter.
The reason for the pending subsidy component of Kharif and Rabi 2020, Kumar said in his letter, has been taken up by the State (Maharashtra) from time to time with the Government of India, and recently the Government has directed the State Committee to resolve the issue. has instructed. Calling all insurance companies for consultation on this issue.
Accordingly, the matter is still pending before the State Grievance Redressal Committee and Reliance General Insurance is on the wrong side of the guideline for denial of payment of damages to farmers for Kharif 2021, the letter alleged.
The letter alleged that Reliance General Insurance earned Rs 2,285 crore as profit in the last five years from the crop insurance scheme in Maharashtra, but the claimed percentage of premium paid by the company, 26.55 per cent, is the lowest among all insurance companies. Is. In comparison, other insurance companies like Oriental Insurance have a payout ratio of 163 per cent, Bajaj Allianz General Insurance has a payout ratio of 148 per cent, IFFCO Tokio at 39 per cent, HDFC Ergo 42 per cent and Bharti AXA 45 per cent.
“This shows that Reliance General Insurance Company is deliberately avoiding payment to farmers on one pretext or the other; deliberately suppressing the loss to the farmers to evade payment and resorting to completely unethical and corrupt practices to malign the name of PMFBY and deprive the farmers of the benefits of the scheme”, Kumar said in his statement. Said in the letter.
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