The working group on risk management in
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| 4. 8.4.Recommendations: Working Group on the basis of the review made in the preceding paragraphs, recommends a Central Rating Method with Coinsurance Pool. The details are: • The scope of insurance cover, terms & conditions would beset by the government, while AIC, would set the commercial premium rates In order to minimize the issues of selective underwriting and not getting into the realm of support of the states in yield estimation and banks in product delivery, which might arise vis-à-vis private insurers, AIC will do the direct underwriting. • The participation of private and other insurers,will be in the form of coinsurance sharing from a common pool. AIC to begin with, would retain 50% to its net account and the balance 50% would be up for coinsurance arrangements. 80 • AIC shall also negotiate reinsurance arrangement for the pool on behalf of all the participating insurers The government may in future create an exclusive and independent technical agency with actuarial experts to generate premium rates (in place of AIC), similar to Risk Management Agency (RMA) on behalf of US Department of Agriculture (USDA Direct participation of private insurers would be explored in the course of time and with experience. The model recommended above, is only with respect to the government supported ‘Area Yield’ insurance. In respect of other insurance products, the insurance companies would be free to enter the market and underwrite business directly. The Working Group further thought that given the freedom and choice many private insurers may not participate in large-scale crop insurance operations. In order to get every insurer to participate in crop insurance and thus increase crop insurance penetration in the country, a Download 0.68 Mb. Share with your friends:
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