Presentation on Rural Insurance in India and Miscellaneous Forms of Insurance

1. Presentation on Rural Insurance in India and Miscellaneous Forms of Insurance

2. Rural Insurance in India Under the provisions of sections 32-B and 32-C of the Insurance Act, 1938, insurance companies are obliged to provide such percentages of business as may be specified by the IRDA, for persons in the rural sector or social sector, workers in the unorganised or informal sector, for economically vulnerable or backward classes of society and the other categories of persons, as may be specified by the IRDA.

3. The IRDA has, in pursuance of the provisions of the above two sections of the Insurance Act, issued the (obligations of insurers to rural or social sectors) Regulations, 2000, which lays down the every insurer transacting general insurance business, shall underwrite business in the rural sector, to the extent of at least 2% of the total gross premium in the first financial year, at least 3% of gross premium in the second financial year and 5% of the gross premium in the third and further financial years. The obligations include insurance for crops.

4. The rural sector has been defined as any place which, as per the last census, has a population of not more than 5000, density of population of not more than 400 per square kilometer, and at least 75% of the male working population engaged in agriculture. • The Government of India has launched various programmes for the benefit of small farmers, marginal farmers, agricultural laborers, etc.

5. Contd.. Since 1980, all these programmes have been Integrated into Integrated Rural Development Programme (IRDP) which is funded by the central and state governments on 50:50 basis. The objective of the programme is to provide, to the target group of rural families, a package of assistance comprising of income generating assets, working capital, etc.through subsidy, institutional credit, etc.

6. Special insurance schemes are framed to protect the beneficiaries of IRDP projects. Under these policies, the rates of premium are lower and claim procedure is simplified. Whenever, the word “scheme” is used hereafter, it refers to these special policies.

7. Objective • Know the various rural insurance policies. • Know the coverage under various rural insurance schemes. • Settle the claim.

8. Rural Policies • Various livestock, e.g. cattle, sheep, goat, etc. • Sub-animals e.g. silkworm and honeybee. • Plantation and horticultural crops, e.g. rubber, grapes, etc. • Property e.g. agricultural pumpsets. • Persons e,g, gramin accident.

9. Miscellaneous forms of Insurance • The accident or miscellaneous department covers those types of risk which are not covered either under Fire or Marine departments. Its scope is therefore, very wide and extensive and includes such a wide range of contingencies as may be not included in the strict interpretation of the term ‘Accident’. The accident and miscellaneous insurance include many sub-sections under which different classes of business are transacted.

10. Marine cum erection/ storage cum erection policy: This is a comprehensive policy covering all physical risks which a project is exposed to right from the warehouse of the supplier of equipments- whether imported or indigenous to its erection, testing and commissioning at the site. In case the policy period exceeds 12 months, the premium can be paid in quarterly installments with the first installment being more by 5% and the last installment being paid 6monts before expiry of the policy • The policy can be taken by contractor, principal, jointly or seperately.

11. 2.Machinery breakdown policy: • This is a policy which covers financial loss incurred by the insured due to loss or damage to machinery as a result of accidental electrical and mechanical breakdown. • This insurance can be taken by the individual owner of the machine or person or company having financial interest in the machine.

12. 3.Electronic equipment policy: • This is a specially designed policy which covers accidental loss or damage to electronic equipments. This policy can cover sudden or unforeseen losses due to any reason not specially excluded. • This policy can be taken by the owner, lessor or hirer of electronic equipment

13. 4.Contractors all risk policy: • This policy is specially designed to give financial protection to the civil engineering contractors in the event of an accident to the civil engineering works under construction. • The policy can be taken by principal, contractor or sub-contractor, jointly or seperately.

14. 5.Contractor Plant and Machinery policy: • This policy covers all different types of machinery used for handling material or construction. • Policy can be taken by: - owner of machine -Contractor or user of machine -financial institutes who have an interest in machinery

15. 6. Personal accident policy: • The policy offers compensation in the event of death or disability directly and solely as a result of an accident, by external, visible and violent means. Family package cover is available to individual under personal accident policy whereby the proposer, spouse and dependent children can be covered under a single policy with a 10% discount in premium.

16. 7. Motor insurance This policy covers all types of vehicles plying on public roads such as: • Scooter and motorcycle • Private cars • All type of commercial vehicles • Motor trade • Any vehicle owner whose vehicle is registered in his/her name with the Regional Transport Authority in India can take this policy.

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