Global Economy

Maharashtra government files case against Reliance General Insurance

The Maharashtra government has filed a police case against Reliance General Insurance Company (RGICL) in Parbhani district, alleging disobedience of an order issued by the district collector for payment of insurance claim amounts to farmers under the Pradhan Mantri Fasal Bima Yojana.

Officials at Maharashtra’s agricultural department said this was for the first time such an FIR was filed against an insurance company in the state.

The state government had earlier informed the Centre that non-payment of claims by the company to many farmers could result in a “law-and-order situation” in the state as five other insurers had paid about 90% of the claims for the 2021 kharif season.

RGICL, part of Anil Ambani‘s Reliance Group, has been the implementing agency of the insurance scheme in Parbhani district since 2020. It claimed that non-payment of premium subsidies by the state had led to the current situation.

As per the operational guidelines released by the Centre, applicable premium subsidy needed to be released to settle the losses under the company’s three-year contract of implementing the scheme with the Maharashtra government, RGICL said in response to ET’s questions. “Due to non-receipt of payments, RGICL’s commitments to reinsurers and subsequent claim recoveries have been impacted. RGICL has previously settled claims in proportion to the premium received under the PMFBY scheme,” it said in the emailed response on Wednesday.

The FIR said: “In the kharif 2020 season, 7,00,129 farmers had paid a premium of Rs 277.65 crore to the company. Of these, 1,61,390 farmers’ claims amounting to Rs 107.94 crore were approved by the company. Of these (approved claims), the company paid Rs 52.84 crore to 88,997 farmers. However, it has not paid the remaining Rs 55.10 crore to the 72,393 farmers, whose claims were approved.”

The FIR stated that the company was frequently instructed to pay this amount to the farmers.

It added: “In the rabi 2020 season, 55,477 farmers had paid a premium of Rs 10.96 crore. Of these (insured farmers), 12,300 farmers incurred losses against which the company was expected to pay Rs 6.05 crore to the farmers’ account, which was not paid despite frequent reminders.”

The complaint said in the kharif 2021 season, 3,24,356 farmers had informed the company through different mediums about the losses incurred due to natural calamity. “The company was ordered to carry out a survey (panchnama) of the losses within 10 days of receiving the complaints about losses. However, even after a month, the company did not carry out these surveys citing lack of manpower. Later, the company approved claims of Rs 183.20 crore to 2,72,113 of the 3,24,356 farmers. The company was directed to pay this amount to the farmers before Diwali. However, it has not been paid till today,” it said.

State agricultural commissioner Dheeraj Kumar, in a letter dated November 1 to the central government, alleged that the company was “deliberately avoiding payments to farmers on some pretext or other”, was “wilfully suppressing losses occurred to avoid payments” and was “resorting to total unethical and corrupt practices to tarnish the name of PMFBY and denying benefits of the scheme to the farmers”.


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