: Govt raises premium for flagship insurance schemes #FinanceIndia #StockMarketNEWS #Business Press Trust of India New Delhi The government on Tuesday raised the premium for its flagship insurance

@StockMarketNEWS Wed 01 Jun, 2022

Posted in: #FinanceIndia #StockMarketNEWS #Business

Govt raises premium for flagship insurance schemes #FinanceIndia #StockMarketNEWS #Business
Press Trust of India

New Delhi

The government on Tuesday raised the premium for its flagship insurance schemes Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) in order to make them economically viable.

The premium rate of PMJJBY has been revised upward to `1. 25 per day, translating into an increase from `330 to `436 annually.

The annual premium for PMSBY has been hiked from `12 to `20, an official statement said.

The new premium rates are effective fromJune 1, 2022.

In percentage terms, the premium increase is 32% in case of PMJJBY and 67% for PMSBY

The decision has been taken in view of the long-standing adverse claims experience of the schemes, it added.

The number of active subscribers enrolled under PMJJBY and PMSBY as on March 31, 2022 were 6. 4 crore and22 crore, respectively.

Since the launch of the PMSBY, an amount of `1,134 crore has been collected by the implementing insurers towards premium and claims of `2,513 crore have been paid as on March 31, 2022.

Further, an amount of `9,737 crore has been collected by the implementing insurers towards premium and claims of `14,144 crore have been paid under PMJJBY as on March31, 2022.

Claims under both the schemes have been deposited into the bank accounts of the beneficiaries through the direct benefit transfer (DBT) route.

The transmission of benefits through these schemes were closely monitored during COVID-19 and a host of measures were taken to simplify the procedures and expedite claims, including, outreach programmes and messages from the banks to reach out to beneficiaries of the people who died during the pandemic, simplifying claims form and proofs of death and many more,it said.

“It may be recalled that the original approval at the time of launch of the schemes in 2015 provided for an annual review of the premium amount (`12 for Pradhan Mantri Suraksha Bima Yojana and `330 for Pradhan Mantri Jeevan Jyoti Bima Yojana) based on the claims experience.

“However, no revision of premium rates was made in the last seven years since inception of the schemes in spite of recurring losses to the insurers,??? it said.

Upon examination of the claims experience of the schemes, it said, IRDAI informed that while the claims ratio (percentage of amount of claims paid to premium earned) pertaining to PMJJBY and PMSBY, for the period up to March 31, 2022, was 145. 24% and 221. 61% respectively, the combined ratio (sum of claims ratio and expense ratios) pertaining to PMJJBY and PMSBY for the period stood at 163. 98% and 254. 71%.

Revised rates would also encourage other private insurers to come on board for implementing the schemes, thereby increasing the saturation of the schemes among the eligible target population, especially those who are underservedor unserved.