In the last three years, insurance companies involved in Pradhan Mantri Fasal Bima Yojana (PMFBY) have collectively paid 85 per cent claims against the premium collected.
According to the government, the difference between premium collected and claims paid by insurance companies is not the only profit for the companies. The cost of reinsurance and administrative costs are also borne by insurance companies.
Minister for Agriculture and Farmer Welfare Narendra Singh Tomar told Rajya Sabha in March that for insurance companies, no upper or lower limits of profit and loss are set. According to the government, most general insurance companies, except Agriculture Insurance Company of India Ltd (AIC), undertake different types of businesses/policies. Thus, the overall profit/loss of these companies arises out of the profit/loss in these different lines of insurance.
Farmer leaders and organisations have repeatedly alleged that the government had planned the scheme to benefit insurance companies rather than