The working group on risk management in


government money spent is the highest through the insurance route



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wg11 risk
government money spent is the highest through the insurance route.
(a) Premium Subsidy in an Actuarial Regime:
The Working Group has examined the matter and would like to make the following suggestions in addition to the recommendations made by Joint Group:
(a) Actuarial premium rates are to be applied at a District level, by micromanaging the indemnity levels in an equitable manner, vis-à-vis the risk of each Insurance Unit (IU).
(b) To the extent possible, irrigated and un-irrigated areas with respect to a crop, have to be notified separately, so as to charge premium rates, commensurate with the risk.
(c) Crops with gross actuarial premium rates of 20% or more, may not be included in the actuarial regime. The government may also consider excluding such crops from the insurance net, and may provide support under catastrophe / relief programs.

d) In due course, an alternative to CCEs based yield estimates, has to be developed forgetting accurate and timely yield reports, for processing claims.
(e) The insurance product being of the nature of safety net to the farmers in mitigating production risks, it is good that all crop insurance products could be exempted from service tax.
(f) The Subsidy model suggested is given in Table below:

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