PM insurance scheme: Government rejects Insurers' demand for premium hike

(Reported by Alok Priyadarshi)

New Delhi: The government has refused to adhere to the demands of insurance companies seeking a hike in premium under the PM insurance scheme, Zee Media sources have said.

Insurance companies have been seeking an increase in the Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), stating that these social schemes have seen a high claim ratio.

PM Narendra Modi had launched the PMJJBY and PMSBY in March 2015. PMSBY offers a renewable one year accidental death-cum-disability cover of Rs 2 lakh for partial/permanent disability to all savings bank account holders in the age group of 18-70 years for a premium of Rs 12 per annum per subscriber.

PMSBY is offered/administered through both public and private sector general insurance companies, in tie up with banks, regional rural banks and cooperative banks.

Insurance companies have claimed that under the PMJJY schemes they will have to incur losses between 10-20 percent this year. The companies said that in FY 2017-18, the companies raised Rs 1,756 through premium but RS 1,931 was spend to settle claims.

Under PMSBY scheme the companies raised Rs 161 through premium in FY 2017-18 while they had to spend more than Rs  300 crore to settle claims for which government insurance companies are bearing losses of upto 100 percent. Insurance companies were seeking that government should raise the premium from Rs 12  to Rs 30 . The insurance companies citing example of LIC said that for accidental insurance of Rs 2 lakh, the life insurance company charges premium of Rs 80.

The number of subscribers under the Pradhan Mantri Suraksha Bima Yojana has gone up to 13.41 crore  while Pradhan Mantri Jeevan Jyoti Bima Yojana has seen enrolments of 5.3 crore individuals.