The Union government has sanctioned Rs.1,558-crore as crop insurance compensation to 8.76L farmers across the state in the initial phase under the PMFY scheme for the year 2018-19. Among delta districts, Tiruvarur has been sanctioned Rs.290.37 crore for 1.14L farmers, Thanjavur gets Rs.286.42 crore for 1.4L farmers, Nagapattinam gets Rs.227.5 crore for 99,280 farmers and Pudukottai gets Rs.157.82 crore for 1.30 lakh farmers.

IRDA has asked the govt to continue with the scheme for at least seven years to assess the results before making any change. Under the proposed risk pool format, it is proposed to create a government-owned agency that will have the mandate to fix crop premiums and payouts. The participating insurance companies would be restricted only to administrative functioning against a fixed charge.

The tightening of the reinsurance covers given out to non-life insurers for crop insurance will impact the premium collections of insurers even in the second-half of FY20. Reinsurers have increased rates for offering cover to insurers on one-hand while claims continue to pile-up on the other. Globally, rates for crop insurance have hardened because of the rise in crop losses affected by natural catastrophes.