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PM scheme: Insurers seek clarity in dispute resolution

Discrepancies also surfaced on due to technical glitches, with no proper guidelines to address them

Namrata Acharya  |  Kolkata 

PMFBY, agriculture
This year, in a clerical error led to cancellation of one round of tendering process in West Bengal

With the (PMFBY) entering its second year of operation, are seeking more clarity about and the implementing agency. In particular, are concerned about the dispute settlement mechanism with states. 

Last year, in some states, had a tough time in settling claims due to data discrepancy. In Gujarat, despite a good crop, the claim ratio was as high as 200 per cent. According to the insurers, the discrepancy was on account of faulty (CCE). “The is still to take proper share. There are no clear guidelines as to what happens in case a dispute arises between an insurer and a state,” said an executive of a public sector insurance firm.

At present, while the central government has drawn the scheme and is responsible for the release of subsidy, state governments are in-charge of floating tenders and CCEs, which form a crucial part of the new scheme in deciding claims. According to in several states, CCEs were not properly conducted. While in some cases the experiments were not conducted on the date intimated to the insurers, in others the data presented by the states did not match the ground realities. 

Last year, in Rajasthan, the CCEs were affected because of a strike by government-appointed village accountants. Hence, questions are being raised about the validity of the government

Notably, General Insurance Company (GIC), which is also one of the distributors of the scheme, lays down terms and conditions of aspects such as guidelines on quotes. 

This apart from being the reinsuring firm, in case of abnormally high claims, takes a call on claim settlement. According to some insurers, this creates a conflict of interest. 

“As an insurer, we would want the body to be as neutral as possible. At an informal level, there have been discussions with the government on PMFBY,” said an executive of a private sector insurer firm on condition of anonymity. 

At the process of tendering also, discrepancies have surfaced on account of technical glitches, with no proper guidelines to address them. For example, this year, in a clerical error led to the cancellation of one round of tendering process in West Bengal. By the time the next round opened, the rates quoted by all the other companies were known.

First Published: Thu, October 26 2017. 01:46 IST