The Centre has allowed states to set up their own insurance companies for implementing Pradhan Mantri Fasal Bima Yojana (PMFBY), a senior Agriculture Ministry official said today.
The move comes after several requests from states as well as observations made by Comptroller and Auditor General (CAG) in its 2017 report that old crop insurances schemes which have now been merged with PMFBY, were poorly implemented during 2011-2016.
"We have allowed the states to establish their own crop insurance companies to implement PMFBY subject to participation in bidding process," the official told .
Presently, five public sector insurers and 13 private insurance companies are empanelled for implementation of the scheme, the official said.
The public insurers include Agriculture Insurance Company of India (AIC), United India Insurance Company (UICC), National Insurance Company (NIC), Oriental Insurance Company (OIC) and New India Assurance Company (NIAC).
Launched in April 2016 , PMFBY provides comprehensive crop insurance from pre-sowing to post harvest against non-preventable natural risks at extremely low premium rate of 2 per cent for kharif crops, 1.5 per cent for rabi crops and 5 per cent for horticulture and commercial crops.
The balance premium is paid equally by the centre and state. Claims are settled on the basis of yield loss assessed at the end of the season.
During the 2017-18 crop year (July-June), 4.79 crore farmers have been covered under PMFBY and the government is in the process of assessing the claims.