RURAL INSURANCE

1. INTRODUCTION
1.2 RURAL INSURANCE DEFINITION : Rural areas (also referred to as "the country," and/or "the countryside") are settled places outside towns and cities. Such areas are distinct from more intensively settled urban and suburban areas; Inhabitants live in villages, hamlets, on farms and in other isolated houses. In modern usage, rural areas can have an agricultural character, though many rural areas are characterized by an economy based on logging, mining, petroleum and natural gas exploration, wind or solar power or tourism. The report Rural Texas in Transition states that factors used to determine the "rural" or "urban" status of an area include population, population density, "occupational opportunities," "relative presence of agriculture," sizes of nearby cities and towns, and "quality of life." The IRDA guidelines define a Rural sector as a place which as per the latest census has: The total population of not more than 5000. The density of population of not more than 400/sq.km. and at least 25 % of the male population is dependant on agriculture as source of livelihood. A change in the definition of what constitutes `rural' has given some leeway for insurance companies to get in the mandatory percentage. In August 2004, Insurance Regulatory and Development Authority altered the definition, aligning it with the census definition of `rural'.

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The census does not define rural area. It defines only an urban area. And by inference, what is not urban is a rural area. The erstwhile IRDA definition of rural areas included all areas with a population of less than 5,000, with a density of population less than 400 sq km and where at least 75 per cent of the male working population was engaged in agricultural pursuits. The IRDA had amended the definitions earlier in 2002 to bring down the requirement stipulating that at least 25 per cent of the population had to be engaged in agricultural pursuits. The revised definition has widened the market.Mr. Vivek Khanna, Director, Marketing, Aviva Life Insurance Company, said, "A couple of thousand villages would now be brought under the fold. The earlier definition meant that only some remote villages could be tapped. And there is no ambiguity now." RURAL SECTOR. India lives in villages. There are more than 5 lakh villages, with population of 5000 or less, with a total population of nearly 75 crores. But nearly 25% of the rural population is below the poverty line. The people in these areas are scattered far and wide. Hence, to contact these people, one has to travel long distances along roads that are very well constructed. There may not be any convenient places for visitors to stay or to eat food in these areas. It would, therefore, probably be more profitable for insurance companies to concentrate their efforts on the urban areas. To combat this tendency, the Insurance Regulatory and Development Authority has made it mandatory for every insurance company in India to undertake a specific percentage of life insurance business and general insurance business in rural and social sector, as specified in the official

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gazette by the Authority. Providing insurance to the majority of the Indian population, which lies in the rural areas, scattered over a wide geographical, socio-cultural and linguistic landscape, is a major challenge for both the public and the private insurers. There is a great difference in the rural and urban peoples mindset, their level of education, professions and incomes. Rural people may prefer low premium and maximum risk coverage and may prefer compensation upto the actual amount of loss. In urban areas people may demand maximum compensation and for that they might be willing to pay high premium. There lies a great potential in the rural insurance market where the penetration of the insurance players has been low. In rural areas insurance is often perceived as an additional burden rather than a means to combat risk. There is great potential for expanding business in rural areas as most of the Indian population lives in rural areas. While most of the insurers may find it unattractive to tap the rural business, it should be understood that relatively smaller amount of policies will be compensated by a larger number of policies. Rural insurance business should be looked upon as an opportunity and not an obligation. Opportunities for rural business can be considered in terms of the gigantic population of India of which 72 per cent resides in the rural areas and majority of them are uncovered. With the current declining trend in interest rates, insurance products can become good investment avenues, which give good returns and can cover lives and assets. However, low literacy levels, lack of insurance awareness, uncertainty of agricultural incomes, low incomes of landless laborers and wage earners, their poor health conditions, traditional savings habits where there is more preference
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for real assets, superstitions, low earnings and credibility can really be the threats to the insurers trying to capture rural business. Hence some special products need to be designed for them. Compared to the organized sector, the unorganized sector constitutes major section in the Indian population, which includes cultivators, agricultural laborers and workers who work in the unorganized manufacturing and service industries and also includes self-employed. Around 30 percent of the Indian population still lives below the poverty line and cannot afford even their basic necessities. The Government of India and the LIC have launched group insurance schemes for these downtrodden sections of society such as landless agricultural laborers, beneficiaries of the IRDP program, etc. One such scheme is the Rural Group Insurance Scheme 1995. There are some other schemes introduced by the government in association with LIC of India such as Janashree Bima Yojana, Krishi Shramik Samajik Suraksha Yojana 2001, Shiksha Sahayog Yojana. Under these schemes the sum covered was very low and the claim amount was very meager. Involvement of middlemen, bureaucracy and red-tapism were the major negative factors in this regard. Indian agriculture is highly dependent on monsoon, and crops are exposed to several risks. In this direction the NAIS National Agricultural Insurance Scheme was introduced in year 2000 which replaced the existing comprehensive Crop Insurance Scheme (operating since 1985). NAIS was primarily aimed at covering all food crops, oilseeds and annual commercial /horticultural crops. 11 crops are covered under NAIS. For Small and Marginal Farmers, 50% subsidy was given (which was equally shared by the Center and respective State governments). On these lines, a Pilot Seed
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Crop Insurance Scheme was introduced in the same year to protect the seed breeders. All public sector general insurance companies also provided livestock insurance. NABARD and the public sector general insurance companies have set up the Agricultural Insurance Corporation of India Ltd., which will take care of insuring farms, agricultural properties, cattle, poultry, etc. The estimated size of the agricultural insurance business is around Rs.1000 crores and it is expected to grow 10 times in the years to come. In order to avoid possible negligence by the insurers towards rural markets (the new players in particular), IRDA formulated the Obligations of Insurers to Rural Social Sectors and it is worth mentioning that the performance of both life and the general insurers has been much above the required level. RURAL INSURANCE. No doubt the vast potential of the rural market in insurance remains untapped. Only the Life Insurance Corporation of India with its large number of branch offices and network of agents throughout the country is able to do a reasonable percentage of business in rural areas. However, to tap the full potential the insurance companies will have to introduce new products to suit the needs of the people, combining it with facilities to meet their short-term requirements and so on. OBJECTIVES 1 To study the insurance provided to rural areas by insurance sector. 2 To compare the urban and rural insurance services provided by insurance sector.

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To analyze the problems and challenges faced by the insurance companies in providing the rural insurance to the rural population.

2. NEED FOR RURAL INSURANCE. There is a great need of rural insurance in a country like India. This need arises because many villagers are unaware about insurance. Many villagers simply blame it on their destiny when they are faced with sudden, unexpected losses. Insurance is not a priority requirement for them, today. Many others who have acquired assets through bank loans are not aware that assets have been insured. The very few who may have some knowledge about insurance may know something about life insurance. Villagers who may know something about general insurance may be just about a handful. Thankfully this situation, of late, has slowly been changing for the better. Thanks to the MFIs, NGOs and SHGs. But the fact still remains that it would be a long time before the situation changes to appreciable levels and much remains to be done. There is an emerging sensitivity to the need to offer insurance services to Rural and socially marginalized populations in addition to the services of credit and savings for their socio-economic emancipation. The vulnerability of poor due to low and irregular incomes is exacerbated by unexpected crises such as illness, disability, death, or physical catastrophes such as flood, fire etc. leading to loss of assets and livelihood. These unexpected events can wipe out their savings or lead them into greater indebtedness, thus worsening their already weak position. INSURANCE has thus far been mostly city-oriented. But things are

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happening in the rural areas where human life and income-generating rural assets need protection, and there is tremendous scope for developing insurance business. This shows up the gross neglect of the rural areas vis-avis insurance cover, though since the late-1960s, a silent economic revolution has been on in the villages. Now that the insurance sector is open to the private sector and foreign companies, the Government should pay serious attention to covering the rural areas.While it is true that access to insurance cover depends on the literacy/awareness levels and assured income, well-planned and organised efforts by committed private sector companies can yield rich dividends from the rural areas. This is because: (1) A large number of rural districts have witnessed significant growth and prosperity; (2) Access to reliable and authentic data and information has improved considerably, which can enable quick and correct decision-making; (3) There are specific functionaries and agencies in the rural areas which can help explore and exploit insurance business in the untapped rural market.

3. RURAL INSURANCE PRODUCTS When we talk of Rural Insurance all that comes to our mind are insurance products relating to life, sickness and livestock. Not many are aware that apart from these, there is an array of excellent insurance products, which are ruralfriendly, and of much significance to our rural folk. To mention a few, policies specially designed for women, farmers package policies, policies to

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protect children, personal accident policies, mediclaim and hospitalization policies, road safety policy, student safety insurance, householders policy, etc. Some of the rural insurance products are as follows1. AGRICULTURE PUMPSET INSURANCE SUITABILITY This policy is suitable for insuring pump sets used for agricultural purposes. Same policy is issued to cover pumpsets used for domestic purposes. SALIENT FEATURES The policy covers centrifugal pump sets which are either electrical or diesel driven and submersible pumpsets upto 25 HP capacity. The policy covers loss or damage to the pumpsets at the premises it is installed caused by: 1. Fire & or lightening 2. Theft / Burglary (when the pumpset is in locked enclosure) 3. Mechanical breakdown and or electrical breakdown. 4. Riot, strike, Malicious and terrorism damage Additional covers: Flood risk can be covered at additional premium provided the pumpset is installed in enclosure in flood prone areas. However, losses due to normal wear & tear willful or gross negligence, pre existing faults, manufacturing defects covered by guarantee, transportation and re-erection charges are not covered.

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BENEFITS: Losses are paid on receipt of repairers bill. The maximum amount payable for rewinding of motors is net of salvage value & excess and is enclosed to the policy. All claims are subject to a depreciation of 10 % per year. Maximum depreciation of 75 % of the erected value of the pump set shall be applied for pumpsets above 8 years age. PREMIUM Premium is charged depending on the type of pumpset whether centrifugal or submersible; its rated capacity (HP) and the sum insured. Sum insured shall be the new replacement value of the pumpset. Discounts on premium are offered if there are no claims during the previous years and in the case of long term policy. Group discount is allowed if more than 250 pumpsets are covered under single policy. Premium is loaded by 50 % for submersible pumpsets over 10 years old. REQUIREMENTS: Pumpset should be serviced frequently, checked and overhauled each year. Notice shall be given to police in case of theft claim. RECOMMENDATIONS: Agricultural pump sets are prone to losses due to burn-out because of power fluctuations, theft and damage by natural calamities. This policy is devised to cope up with the demand from the financers and agriculturists. As the policy is subsidised and further discounts are offered, it suits the budget of the agriculturist whose produce is dependant on the pumpset. AGRICULTURAL STATISTICS It rightly points out that agricultural statistics more often mislead, rather than
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inform. There is no doubt that official published information should be authentic and accurate. The timely collection and dissemination of correct data on acreage, input supplies, pest attacks, rainfall, agricultural production, quality of markets, etc., are essential for clearing uncertainties related to demand, supply and prices, as they affect the producers, consumers and speculators. Decisions on sourcing, inventory, processing and marketing, cash-flow management, etc., are critically dependent on reliable information. Cotton, groundnut and sugarcane are found in Kerala, for instance, only in certain areas of particular talukas in a few districts. But, in the estimates of the agricultural department, hundreds of tonnes of the crops were said to be stocked in certain talukas, where no such crops actually existed at all. The Department of Agriculture and the Department of Economics and Statistics should jointly ensure that the data provided to farmers is accurate and dependable.The quality of data collection, compilation and dissemination should not be sacrificed to save on costs of management, men and material. 1 Rural sector offers a huge business opportunity for insurance companies 2 Savings ratio is a healthy 30% of income across all socio economic segments 3 Awareness about Life Insurance is near universal 4 27% of Cows already have a life policy 5 51% of all respondents have expressed intention to purchase a life policy
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6 There are a total of 124 million rural households 7 Nearly 20% of all farmers in rural India own a Kissan Credit Cards. The 23 million credit cards issued till date offer a huge data base and opportunity for insurance. 8 Delivery infrastructure in the form of District Cooperative Banks, Cooperative Societies, NGOs and Self Help Groups already exists in most villages. 9 Rural connectivity through IT. 10 E-choupal of ITC and other similar initiatives are available as additional delivery channels of insurance 11 An extensive rural agent network for sale of Life insurance products exists 12 The agent plays a major role in creating awareness, motivating purchase and rendering other insurance services 13 78% of respondents prefer various combinations of life insurance like life + accident, life + loan, life + health + accident. 14 Flexibility in Premium payments is important. 15 Security of income and bulk returns, especially for daughters marriage and childrens education are major persuasions for taking life policy. 16 While individuals are undecided about purchasing insurance from private players, members of different groups are favorably disposed to purchasing group insurance through private players vetted by the group.
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2. CATTLE INSURANCE Cattle Insurance was governed under Market Agreement as devised by GIC and the rates, terms, conditions etc. all were applicable to all the four Insurance Companies. However, w.e.f May 2003, it is no longer under Market Agreement. This policy covers indigenous cross bred and exotic cattle owned by private owners, various financial institutions, dairy farms, cooperatives, corporate dairies etc. The word cattle include Milch, Cows and Buffaloes calves and heifers, stud bulls, bullocks and he-buffaloes and mithuns. Age group is specified for all the animals. The evaluation of the animal is done by a veterinary surgeon. SCOPE OF COVER/INSURANCE COVERAGE The policy shall give indemnity only for death of cattle due to: i. Accident (Inclusive of flood, cyclone, famine) or any other fortuitous circumstances (fortuitous means accidental in origin) ii. Diseases (Inclusive of Rinder-pest, Block Quarter, Hemorrhagic Septicemia, Foot and Mouth disease subject to vaccination against this disease). iii. Surgical operations iv. Strike riot and civil commotion and terrorism. v. Earthquake. Policy is subject to certain standard and general exclusions. Animals are identified by way of ear tagging. The policy covers both scheme and nonscheme animals. Scheme animals are those animals, which are sponsored by the Government agencies and are financed by some financial institutions, which may or may not involve any subsidy. Master Policy arrangements are
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usually done with DRDA, Bank, Co-operative Societies etc. There is a provision of Long Term Policies also. 3.FOETUS(UNBORN CALF) INSURANCE SCHEME This scheme covers the risk of death of embryo/ foetus due to: a. Accident (Inclusive of flood, cyclone, and famine) or any other fortuitous circumstances (fortuitous means accidental in origin) b. Diseases (Inclusive of Ringer Pest, Block Quarter, Hemorrhagic Septicemia, Foot and Mouth disease subject to vaccination against this disease). c. Surgical operations d. Strike riot and civil commotion and terrorism. e. Earthquake. The scheme is applicable to both the embryo transferred from a selected donor to the synchronized recipient or frozen embryo transferred to the recipient and also the embryo/fetus developed by artificial insemination technique. This can be covered as a separate policy in addition to Cattle Insurance Policy covering the recipient mother cow/buffalo. The cover operates from the 60th day of the transfer of live quality embryo/successful insemination and terminates from 220 +/- 5 days for cow from the date of confirmation of pregnancy or from the date of calving whichever is earlier. It is not an annual policy. The perils covered are still birth, abortion of all kinds except malafied or induced once. Accidental risk, include abortion under veterinary advice to save the mother in conditions like downer cow syndrome, prolapse of uterus, portion of uterus, fracture of limb etc. The sum insured is fixed and depends on the age of the embryo. 4. POULTRY INSURANCE
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SUITABILITY: This policy is suitable for the poultry farmers, the beneficiaries of schemes sponsored by DRDA, DPAP, IRDP and financial institutions providing assistance to poultry units. SALIENT FEATURES: This comprehensive policy is issued to cover poultry consisting of Broiler chick / Layer chickens /Cocks and hens in the poultry farms. A minimum number of 100 broilers / 500 layers or 200 birds per batch in the hatchery can be covered under this policy.The policy provides compensation for loss to birds dead due to accident (including fire, lightning, flood, cyclone, earthquake, riot, strike, terrorist act); diseases contacted or occurring during the period of insurance. BENEFITS: Policy provides compensation when the mortality rate of the birds exceeds the following limits. Birds Broilers Layers Age Mortality Rate 1 day to 6 weeks More than 5 % of the batch size. 1 day to 8 weeks More than 5 % of the batch size. 9th week to 20th More than 3 % of numbers at week 21st week to 72nd week beginning of 9th week. More than 1 % of numbers at the beginning of 21st week

In the event of death of birds 80 % of the bird value or as decided by the veterinary surgeon whichever is less is paid. There is an additional deductible of 20 % in case of Gumbore disease. PREMIUM:
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Premium rates depend on the age of the bird; whether or not they are financed under IRDP scheme as follows: Birds Age Premium Rate For IRDP Non scheme 0.25 bird/batch 1 day to 6 weeks Layers 1 day to 20 weeks 21 weeks to 72 weeks 1 day to 72 weeks Parent stock(hatchery) REQUIREMENTS: 1 % per bird p.a. 1.2 % (4.8 %p.a.) IRDP

Broilers

1 day to 8 weeks

scheme %per 1.5 % (6 %p.a.)

- 3.2 % 5.5 % 5.00 %

0.8 % per bird 3.5 %

A Certificate from a qualified veterinarian is required. In case of layer farms having more than 5000 birds, insurance companys veterinary officer or panel doctor shall carry out inspection. All the birds in the farm should be insured. Standard practices of poultry rearing, record keeping shall have to be practiced. RECOMMENDATIONS: Out break of epidemics / natural calamities such as cyclone result in widespread loss to the poultry affecting the financial position of the poultry owner. The policy comes handy in such a situation and benefits the farmer. This is also governed by Market Agreement, amongst all the four subsidiary companies. The policy shall provide indemnity against death of birds due to accident (including fire, lightning, flood, cyclone, strike, riot and civil commotion and terrorism) or diseases contracted or occurring during the period of insurance. The word Poultry includes layers, broilers and hatchery
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birds, which are exotic and cross-bred. Indigenous and non-descript birds will not be insured. All birds in a farm should be covered. The scheme is applicable to poultry farms consisting of minimum 100 birds under scheme category and 500 birds under non-scheme category. In general, it is 100 broilers per batch, 500 layers per batch and 2000 hatchery birds per batch. For layers, the cover is provided from 1 day to 20 weeks, 21 weeks to 72 weeks or 1 day to 72 weeks. Broilers are covered from 1 day to 6 weeks or 8 weeks. Hatchery birds are covered from 1 day to 72 weeks. The value of the bird is fixed according to the age. The cover is provided against death of the birds due to accident or disease. All applicable cases, vaccination are a must. The valuation of the birds is arrived by a multiplying factor with the age in weeks. The multiplier is applied to the prevailing feed cost and the day old chick cost is added to arrive at week wise valuation. Certain common and standard exclusions applied. Since all the birds are covered, there is no need for identification. The poultry farmer is expected to maintain all the relevant records like feed register, flock record on day to day basis, daily stock register, mortality, culling, vaccination, feed consumption, production, debreaking, and incidents of diseases, sales and purchase. 5. AQUA CULTURE INSURANCE: SUITABILITY: This policy is suitable for licensed farms or farms provided in accordance with the Government Notification for growing brackish water shrimp / Fresh water prawns by adopting extensive / modified extensive / semi intensive systems. SALIENT FEATURES: 1 The policy grants cover two sections. Section I: Basic cover which covers only losses due to natural
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calamities Section II: Comprehensive cover granting Cover for disease also. Policy is usually given for a period of 4 months. 2 The basic cover provides compensation for total loss of shrimp / Prawns due to : 3 Summer kill, Pollution from external source, poisoning, riot, strike and malicious acts of third parties, Terrorism, Explosion / Implosion, Air craft & aerial devices or articles dropped there from, impact damage, earthquake, storm, tempest, cyclone, flood and inundation, volcanic eruption and other convulsions of nature. Comprehensive cover in addition to basic cover encompasses death due to diseases except those caused by bad management and nutritional deficiencies. BENEFITS: 1 In the event of a fortuitous event resulting in a loss, the basis of loss settlement will be the sum insured fixed as follows:Sum insured = Number of seeds released X expected survival rate (%) X expected average body weight in grams X input cost per Kg. 2 For losses upto 4th fortnight stage, maximum liability shall be restricted to 80% of the input cost only. From 5th fortnight onwards claims are admitted as a percentage of biomass. 3 Deductions towards salvage are made. 4 When the percentage of loss at any stage equals or exceeds 80% of the total shrimps / Prawns insured, it will be treated as total loss. PREMIUM: Premium rates have been fixed as follows:-

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Section I (Basic)

Section

II

(Comprehensive) a) For highly cyclone prone 3% zones b)Others REQUIREMENTS: 1 The farm should obtain statutory license for setting up & conducting aqua culture operations in the area as per Government legislation. 2 The ponds should be prepared as per prescribed, recommended and established standards. The seed should be healthy, of good quality, selected as per prescribed norms and obtained from well known source. The source should be of high quality and procured from Holiday periods as recommended by Government reputed firms. 2% 6% 7 %

agency should be observed. 3 All matters concerning farming practices, norms, stipulations; guidelines recommended by competent Government agency, fisheries department research institutes, Fisheries College etc should be complied with. RECOMMENDATIONS: Even though the aqua farming is lucrative, offers high yields and profits, the experience during the recent years has been especially bad both for the farmers as well as for the insurance companies. Insurance companies therefore enforce strict warranties for mitigation of losses and also extend their technical assistance, which explains why it makes good sense in taking this insurance.

6. RAJRAJESHWARI MAHILA KALYAN BIMA YOJNA

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This new scheme is being introduced to scheme covers all crosssections of women in the age group of 10 to 75 years irrespective of their income, occupation or vocation. The scheme would benefit housewives, students, domestic labor, skilled or unskilled labor and other women engaged themselves in similar or other types of activities in rural, semi-urban areas. Since this is a low cost insurance cover, it is hoped that the Central Governments would come forward and extend all support for the implementation of the scheme. The scheme would cover death and/or disablement to women arising out of accidents all types of accidents as defined further. a. Permanent Total Disablement Rs.25, 000/b. Loss of one limb and one eye or loss of both eyes and/or loss of both limbs Rs.25, 000/c. Loss of one limb/sight in one eye Rs.12, 500/It is further understood and agreed as under: i. In case of unmarried women, the policy will be extended to cover death due to accident as defined in the policy in which even the compensation will be payable to the nominee or legal heir. The compensation shall be Rs.25, 000/-. ii. In case of married women, the policy is extended to cover the death of the insureds husband arising out of accidental death caused by external violent and visible means and the compensation is payable to wife only. The compensation shall be Rs.25, 000/-. It is clarified for avoidance of doubt that in the event of wife predeceasing the husband or in the event of simultaneous death of husband and insured wife no compensation shall arise under this extension.

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7. BHAGYASHREE CHILD WELFARE POLICY

This scheme is a novel scheme for girls and provides insurance cover to one orphaned girl child in a family who loses either the father or the mother only due to accident. The scheme provides that such an orphaned girl child below the age of 6 a fixed amount will be given for looking after the needs of child to the alive parent/guardian till the child attains the complete age of 6. Thereafter, from the age of 6 to 12 years the girl will get a fixed amount as scholarship provided that she is admitted in a school and expenditure is incurred on her education. From 12 to 18 years the girl child gets double the scholarship amount and after attaining the age of 15 she will get a fixed lumpsum amount either to pursue her own chosen profession or carrying on her higher education or to settle down if she gets married. The stipend payable till 6 years is Rs.1200/- per annum to meet the requirements of the child. From 6 years to 12 years a stipend of 1200/- is paid as scholarship and from 12 years to 18 years the stipend is doubled to Rs.2400/-. The sum insured of Rs.25, 000/- which accrues to the child on accidental death of one or both the parents is credited into a special fund called orphans girl child fund, which was managed and multiplied by GIC ASSET MANAGEMENT COMPANY. The present arrangement is with Bank of India. All designated branches of Bank of India will extend the services. 8. ANIMAL DRIVEN CART/TONGA This cover is divided into four sections: Section 1 Loss or damage to the cart/Tonga/coach whilst in transit by road rail or inland waterways by accidental external means, fire, explosion, lightning, storm, tempest, flood, inundation, earthquake, burglary or theft, malicious damage, riot and strike.
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Section 2 This section provides indemnity against death or permanent total disablement of the animal used for pulling or driving the carriage due to accident caused whilst attached to the cart/tonga/coach. Section 3 Third party liability caused by cart/tonga/coach insured including passengers liability upto Rs.5000/- per accident and Rs.10, 000/- for all accidents in a year with certain standard exclusions. Section 4 This section indemnifies the driver against death or loss of sight of two eyes or loss of use of two hands or loss of use of two feet or loss of sight of one eye and loss of use of one hand/foot or permanent total disablement Rs.10, 000/- and loss of use of one hand/foot or loss of sight of one eye Rs.5, 000/- Sum insured depends on the market value of cart/tonga/animal and animals to be used for driving are Male buffalo, bullock, castrated bullock, horse, mule donkey, camel, and yak. 9. PLANTATION/HORTICULTURE INSURANCE SUITABILITY: This policy is suitable for individual farmer owner or tenant engaged in cultivation of horticultural trees or plantations or an association / organized and registered body of farmers engaged in cultivation of specified crops. Also bodies procuring inputs, processing / marketing of the produce can take this policy. SAILENT FEATURES: 1 This policy can be issued to cover Horticultural trees/Orchards such as citrus fruits (orange, lime and sweet lime),Grapes, Chickoo, 2 Pomegranate, Banana, Mangium, Vanilla, Areca nut and Cocoa, 3 Plantation such as Rubber, Eucalyptus, Poplar, Teakwood, Strawberry, Betel vine, Cardamom, Sweet lime, Oil Palm, Tea, Apple, Coconut, Sugarcane and Safed Musli.
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4 Subject matter of coverage is fruits in respect of crops listed in horticultural crops and trees in respect of plantation crops and shoot in case of sugar cane. 5 The indemnities are provided only on input cost basis. The period of insurance is crop duration or 12 months whichever is shorter however period of insurance in respect of sugar cane is extendable by such period beyond 12 months upto a maximum of 18 months as may be necessitated by the varieties. 6 In respect of rubber, eucalyptus, poplar and teak wood where plants are first required to be raised in nurseries and then fields the period of insurance shall commence after expiry of 12 months from transplanting (nurseries are not covered). 1 The perils covered are Fire and allied perils including Lighting, Storm, Hail storm, Cyclone, riot strike and terrorism. This is standard cover. ADDITIONAL COVER: 2 Unseasonable rains and frost in case of Grape vines& tea, loss or damage by wild animals in case of Sugarcane, banana; drought & disease in case of Banana, flood & inundation in case of tea plantations; disease &pests in case of tea plantations and betel vine are the additional covers available. BENEFITS: Claims are paid to the extent of 80% of the assessed loss subject to the over all limit of the sum insured. Sum insured shall be based on the cost of cultivation i.e. input cost or cost of rising / development of trees. Only such claims exceeding 10% of sum insured per acre or minimum of Rs. 1000/shall be admitted. Input costs on account of loss or damage to the horticultural crop / plantations are covered. Loss of yield is not covered.
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PREMIUM:Premium shall be covered for different crops as follows: TYPE OF CROP RATE

1. Horticultural Crops-*Citrus fruits, Chikoo, Pomegranate, 5.0 % Banana, Grapes 2. Plantations-*Rubber, Eucalyptus, Poplar, Teak Wood, Tea, 1.25 % Mango 3. Sugarcane 4. Betel vine 5. Sweet Chili (Capsicum) 6. Coconut 3 months to 3 years 4 years to 7 years 8 years and upto 50 years REQUIREMENTS: Inter cropping may be done only if it does not interfere with normal growth and health of the trees. No smoking or cooking shall be allowed in the open fields and within 30m of the property insured. Dry vegetation & leaves should be removed periodically. RECOMMENDATIONS: Plantations are exposed to a variety of perils ranging from pests to forest fires. It becomes very difficult for the farmer to come out of loss in the absence of comprehensive insurance cover. It is for this reason, this insurance policy is devised which is very popular and hence
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1.25 % 6.0 % 4.4 % 0.60 % 0.50 % 1.50 %

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recommended. 10. FLORICULTURE INSURANCE: SUITABILITY: Growers of commercial flowering plants such as rose, chrysanthemum and jasmine having adequate agricultural expertise in the subject may take out his policy. SALIENT FEATURES: This policy covers only plants whilst growing in the farm / green house / Poly house against total loss or damage due to 1. Fire including forest fire and bush fire. 2. Lightning. 3. Acts of terrorism, Riot & strike. 4. Strom, hailstorm, cyclone, flood & inundation. 5. Earthquake. 6. Impact damage by rail / road / air vehicle & animals ADDITIONAL COVERS: Policy may be extended to cover risks of loss due to drought, Pests, & diseases specific to flowering plants. BENEFITS: The Policy covers the input costs incurred till the time of loss. These are the recurring expenses incurred to raise / maintain the plants such as soil preparation, fertilizer, manure, cost of plants / seeds/ saplings/ cost of planting /sowing & Pruning, pesticides, insecticides,

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irrigation, Labour charges and other costs specifically covered. Claims exceeding 50 % of the total sum insured per hectare or Rs.1000/- which ever is less only shall be admitted. Each and every claim is subject to an excess of 20 %. PREMIUM: Premium is charged on the sum insured opted as follows. RISK COVER RATE

Basic Under glass house / Green House % 2.5 % In Additional Cover (Pests / diseases & drought) 0.75 % open field open cover 1.25 field

Under glass house /Green house In 1.5 %

REQUIREMENTS: At the time of taking out insurance, the Plants should be at least one month old after plantation / transportation i.e.; the plants should be well established in the soil. Insurance cover will be granted subject to pre-acceptance inspection by
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insurers and feasibility report from state Agricultural directorate / Experts opinion being received. RECOMMENDATIONS: Floriculture requires constant supervision and maintenance. Despite all the preparations, the plants are exposed to risks from pests & unknown diseases or action of natural calamities. It is for this reason, coverage of the plantation under this policy is strongly recommended. 11. LIFT IRRIGATION / SPRINKLER INSURANCE SUITABILITY: This policy is suitable for the agriculturist using the lift irrigation or sprinkler installation for cultivation. SALIENT FEATURES: This policy covers loss or damage to intake wells, delivery chambers, jack well, pump-house, water storage tank, pipe lines, cables, starters and motors of the lift irrigation system or sprinkler installation arising out of 1. Fire and allied perils 2. Flood, earthquake and land slide 3. Accidental damage to machinery & pipe line. 4. Bursting of pipe lines. 5. Theft. BENEFITS: On the occurrence of a loss, claims will be paid for the cost of restoration to the extent of sum insured set against each item. An excess of 1 % the machinery value subject to a minimum of Rs.1000/- per
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claim is applicable. Theft claims are paid on receipt of non traceable certificate from the police. PREMIUM: A rate of 1 % on the cost of the entire system is applicable for insurance under this policy. The sum insured shall be the new replacement cost including freight, customs duty & erection costs. Terrorist risk can be included in the cover at a premium. REQUIREMENTS: Duly filled in proposal giving the details of the machinery & their individual replacement cost should be submitted. RECOMMENDATIONS: Loss due to breakdown, theft or accidental reasons to the machinery not only is a loss in itself, but also has consequent effect that the crop is affected. It is necessary that the system is repaired / reinstated to mitigate the losses. This policy comes to aid in such situations and is therefore recommended. 12. CALF HEIFER REARING INSURANCE SCHEME The coverage under this policy is meant for calves/heifers from one day to 32 months. The valuation depends upon the age of the cow and is fixed according the age of the calf.All terms and conditions applicable to cattle are applicable here also. Minimum coverage is taken from 12 months however this is not an annual policy. 13. SHEEP AND GOAT INSURANCE This scheme is also governed under Market Agreement. Policy provides indemnity to indigenous cross-bred and exotic sheep and goat against death due to accident (including fire, lightening, flood, cyclone, famine, strike, riot and civil commotion) and disease. Earthquake and landslide covers are also provided. Standard and common exclusions apply as per Cattle Policy.

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Animals are identified by means of small brass buttons ear tags. Animals under scheme category enjoy certain benefits in premium rate and claim procedure. 14. CAMEL INSURANCE The camels are covered against death due to accident or disease as per Standard Cattle Insurance Policy. The max. S.I. is restricted to Rs.3000/-. 15. PIG INSURANCE All indigenous, cross-bred and exotic pigs are covered however under scheme category exotic animals are not covered. The age group is from 4 months to 3 years. The coverage is against death due to accident or disease. Exclusions as per Cattle Policy apply here also. Permanent total disablement, breeding and furrowing risks are not covered. Vaccination in applicable diseases is compulsory. Evaluation depends upon the age of the animal. Animals are identified by means of small brass buttons ear tags. 16. HORSE, MULE, DONKEY, PONY, YAK INSURANCE The Coverage is as per Standard Cattle Policy. However the age group is restricted to 2 yrs to 8 yrs.

17. MICRO INSURANCE Micro insurance is one of the biggest and advance innovations in the insurance sector of India. As the majority of the population living in the rural areas and the majority of the population below poverty lines. The insurance company with a view to target this section of the society, has designed the product which the poor people will be capable to purchase. In micro insurance the face value of the policy will be very low i.e. is
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Rs25000 and the premium will be payable on weekly basis instead of monthly, quaterly,or yearly basis .the premium of the 25,000 on weekly will be Rs150 only which the poor people can afford. In this way the insurance will be able to cover this section of the section which consists of the biggest part of the market. The LIC has already introduce micro insurance in the market before 2 months 4. GROWTH OF RURAL INSURANCE BUSINESS IN INDIA There has been a tremendous growth of rural insurance business. These are the outcomes of the efforts taken by the insurance companies and obviously by IRDA. There are certain norms prepared by the IRDA as per their census population. These norms include certain number of policies which an insurance company has to meet in a year. The best example of growth of rural business can be seen from the below statistical data showing LICs growth performance. LICS RURAL BUSINESS

As per Census Definition Policies 1,07,91,316 55.53

As per IRDA definition Policies 35,33,694 18.18

Absolute As % of Total business

(INDIVIDUAL ASSURANCE FOR 2000-2001) The above table clearly reflects LICs efforts in spreading rural insurance business in villages across the country. LIC had not only covered the number of policies as per IRDA definition but also sold more policies doing a surplus
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business of around 38%. Due to this increase there has been a rapid growth in number of policies taken by rural customers thereby increasing the business. This can be shown with the help of the chart given below.

GROWTH OF RURAL BUSINESS (NO. OF POLICIES) CENSUS DEFINITION

120 100 80 60 60.33 40 20 0 199697 199899 200001 81.23 68.4 No. of Pol. (in lacs) 97.04 107.91

Subsequently LIC experienced a rise in the sum assured i.e claim settlement. This can be shown with the help of the diagram.
60,000.00 50,000.00 40,000.00 30,000.00 20,000.00 10,000.00 0.00 1996- 1997- 1998- 1999- 200097 98 99 2000 01 58,781.59 44,168.19 35,372.94 27,550.69 24,278.73 S.A. (Rs. In Cr.)

The sum assured (number of policies) are in lacs. Thus by the above graphs it is evident that rural insurance has wide scope of growth and development.

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IS INDIAN AGRICULTURE UNPRODUCTIVE? Poor returns on rich harvest. If agriculture is not productive enough, should farmers be given subsidies or use the money to import grains?Again, the problem is not coming up with the correct answer but asking the right question. What does one mean by productive, for instance? If it means that farmers here are unable to keep their prices as low as huge multinational agricultural conglomerates do, there are reasons for that that has nothing to do with farmers not being productive: one is, the conglomerates usually end up exerting a quasi-monopolistic hold on the market; another is, foreign agriculture is heavily subsidised. Then theres the semantic question. What does productive mean? Productive for whom? By what standard? If we are a capital-poor, labor-rich country, using more people in agriculture is not unproductive; its the best use of your resources. Using high-tech equipment which does away with people is, in those terms, a highly unproductive use of your resources.

Farm issues
Though less than 25 per cent of GDP is contributed by the farm sector, it employs more than 70 per cent of the workforce. India is in a paradoxical situation where it is reaping the benefits of being the largest producer of several commodities while, at the same time, not experiencing any material enhancement. The country requires customized solutions for its problems.

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6. PRIVATE COMPANIES IN THE RACE AP PLANS CROP INSURANCE IN ALL DISTRICTS The Andhra Pradesh Government will extend crop insurance scheme to all districts in the State, besides ensuring the availability of Rs 26,000 crore as loans to the farmers in the next financial year.Instead of taking mandal as a unit for crop insurance, a village would now be taken as a unit to ensure proper implementation. The scheme, which is being implemented in 10 districts currently, will be extended to all districts in the State. Under the crop insurance programme, over Rs 376 crore has been paid to the farmers in Anantapuram district alone. Referring to the agricultural productivity in the State, Dr Reddy said there has been on a steady rise. High yields have been reported from Adilabad, Karimnagar, Kurnool, Anantapur, Krishna, Guntur and West Godavari districts. Compared to last year, the average rice production per hectare has gone up to 3,000 kilos from 2,631 kilos, while maize has improved to 4,247 kilos from 2,398 kilos, he said. LIVESTOCK INSURANCE MAKES FARMERS TO GO IN FOR CROSS-BREEDING Livestock insurance, particularly cattle, is catching up in rural India. A general insurance firm such as ICICI Lombard sees this to be as big as the health insurance portfolio. But more than that, it is encouraging cross-breeding of cattle, says Mr.
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Pranav Prasad, Head Rural and Agriculture Business Group, ICICI Lombard. Cattle farmers are bringing good breeds from other regions to their places and are also cross breeding, now that they are aware of livestock insurance, he says. Dairies and cooperatives are seeing livestock insurance as one way of protecting their bottom lines. Dairy farmers are realizing that cattle is insurable and financially includable, this has brought about an awareness of prevention of health problems in cattle. ICICI Lombard, which has insured nearly one lakh cattle in the three years since it began this venture, sees its livestock business expanding, including extending group insurance for cattle.Currently, the firm extends livestock insurance to Andhra Pradesh, Chhattisgarh, Orissa and Haryana covering 70 districts. The insurance firm makes use of veterinarians for settling claims and feels it has control over fraud claims. ICICI Lombard has a tie-up with Livestock Development Authority and it is one of the contracted insurance firms with the latter. The advantage of this is that the authority subsidizes 50% of the insurance premium for the cattle. Premium for the cattle is 3 to 5 per cent of the insured sum.

WEATHER INSURANCE
Overall, the company realizes Rs 200 crore as livestock insurance currently. Mr. Prasad says ICICI Lombard aims to insure one million cattle by 200910. Before that, it plans to have at least 2.5 lakh cattle insured during the next fiscal. Meanwhile, index-based weather insurance is also drawing the farmers

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interest. From a meager enrolment of a little over 200 farmers in 2004, ICICI Lombard now has enlisted 2.5 lakh farmers for this policy. About three lakh hectares have been covered by this, Mr. Prasad says. The weather insurance ensures that farmers are compensated through the policy in case weather plays truant with the crop or its output. Different parameters have been set up and the weather index is drawn up district-wise through a tie-up with National Collateral Management Services, an arm of NCDEX. The index monitors rainfall during sowing and temperature during harvest.

AVIVA LIFE INTRODUCES RURAL MICRO INSURANCE Aviva Life Insurance, the 74:26 joint venture between between Dabur and UK's largest insurance group, Aviva Plc, today introduced Grameen Suraksha, a micro-insurance rural term insurance plan for BASIX customers. This traditional term plan has been developed with the objective of giving the rural policyholder maximum benefits. Grameen Suraksha is designed such that it reduces the burden of the policyholder to pay premium yr after yr. Instead, under this plan, the policyholder pays premium for a period of just two years and then avails the term benefit for either 5 or 10 yrs. In case the policyholder is unable to pay the 2nd annual premium, the plan will still offer a full cover for 18 months or 48 months from the due date of unpaid premium for the five-year or the 10-year policy plan respectively. In addition, tax benefits can be availed as per Section 80C of the Income Tax Act, 1961.

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Bert Patterson, managing director, Aviva Life Insurance, India said, "Aviva has been a serious player in the micro insurance arena. We have been associated with BASIX since 2002 and together we have insured lives of many in the social sector. With the launch of Grameen Suraksha for BASIX customers, we hope to increase our reach and provide the benefits of life insurance to maximum number of people in rural and social sector. Aviva India has covered close to 900,000 lives in the social sector in association with BASIX and other micro insurance organizations." Under the new plan, the premium is calculated based on the sum assured and age (18 to 45 yrs) of the policyholder. The minimum sum assured is Rs 5,000 and the maximum is Rs 50,000. The policyholder also has the option of surrendering the policy in which case the surrender value is then paid. ING VYSYA PLANS TIE-UPS TO TAP RURAL INSURANCE ING Vysya Life Insurance Company is eyeing collaborations to tap what they consider a vast potential market in rural India where most people remain uncovered by insurance. "The challenge is to reach out to nearly 90 percent of the Indians who are uncovered by any type of insurance. As almost 60 percent of Indians live in rural areas, we are looking at partnering with institutions and NGOs that will help us to spread awareness about insurance and reach out to the potential customers," said Yvo R. Metzelaar, managing director of ING Vysya, which also has GMR Technologies and Industries as a third partner. A joint venture between Dutch financial major ING and southern Indiabased Vysya Bank, ING Vysya Life Insurance Company is among 12 private players competing for a bigger slice of the Indian market that opened to private sector participation only 2 yrs ago.

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With around 25,000 policyholders paying an average premium of Rs.9,000 per year, ING Vysya is working out new strategies to reach its target of having two million customers by 2010, Metzelaar said. "We are looking at more banking and other types of financial institutions like cooperatives and well-entrenched NGOs to reach out to more people to make our services more attractive, efficient and affordable, particularly in the rural areas," Metzelaar told IANS here. As Vysya Bank has more of a retail presence in southern India, particularly Karnataka and Andhra Pradesh, the insurance venture is scouting for a possible partner that would help it broaden the market reach to other regions. A study by the Foundation of Research, Training and Education in Insurance (FORTE), a collaboration of the Federation of Indian Chambers of Commerce and Industry (FICCI) and ING Insurance, has revealed that there is tremendous potential for growth in the rural areas. With only 11% of Indians covered by old age pension or provident fund schemes and the lack of any social security or medical cover for an overwhelming majority in the unorganized sectors, insurance is slowly becoming need-based instead of a tax-saving measure, the FORTE study observed. Unlike their urban counterparts, the rural folks still have low awareness about advantages of insurance cover for life and property, said sources in the insurance industry. "The challenge in the rural areas is to win more trust than in urban areas. For this we need to have alliances with cooperatives, local banks and NGOs that have the local expertise and reach," said Metzelaar. In the last 2 yrs, ING Vysya Life Insurance's main concentration has been on creating new markets in a country where a decades-old establishment like
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the Life Insurance Corporation (LIC) enjoyed a monopoly as the sole provider of life insurance cover. Dictated by the market demand, ING Vysya has been gradually introducing fresh features in its product packages. With customers having a wider choice due to privatization, the company has been wooing the market with more affordable premium options. "We have 6 products, some with money back features. We have just introduced 4 riders for our products giving the customer more choice in the term offer and an add-on provision for critical illnesses," said Metzelaar. ING Vysya also sees tremendous growth potential in the pension sector. It is currently formulating pension schemes that would be launched as soon as it gets the clearance of the insurance regulatory authority and has trained personnel to roll out the products.

TAP 200 MILLION RURAL YOUTH POTENTIAL TO MULTIPLY FIS, INSUR. CORP. TURNOVER: ASSOCHAM Financial Institutions (FIs) and Insurance Companies can rope in about 200 million Rural Investors in their fold provided they design innovative savings and loan schemes on lines of commercial banks and even post offices and multiply their annual turnovers by disbursing agri, housing, personal and education loans and easy insurance schemes at affordable rates to potential aspirants, according to Associated Chambers of Commerce and Industry of India (ASSOCHAM). In a Paper on `Investment Potential Prospects of Rural India brought out by ASSOCHAM, it has been stated that of 700 million rural population,

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about 200 million rural youth with reasonable per capita income, investment opportunities are virtually non-existent. This is because, these have no access to popular savings instruments of various commercial banks, insurance companies and post offices branches in ulteriors of countryside and are disparately looking to channelise their finances for suitable returns. A good number of rural investors are also aspiring to become self reliant but lack avenues for credit in areas for food processing, better horticultural and agricultural facilities, training for skill development to process their milk etc., says the Paper. It recommends that in aforesaid areas, disbursement of agri loan would work as a magic and insurance schemes would provide rural youth safety net to protect their investments, suggesting that financial institutions and insurance companies should come forward to adequately harness this hitherto unexplored areas, says ASSOCHAM President, Mr. Venugopal N. Dhoot while releasing the Paper. Apart from agri loans, FIs can lure rural investors for housing, personal, auto and education loan. The public and private insurance companies can also introduce affordable insurance schemes with their premium keeping at Rs. 500 to Rs.1000 per month. With this premium, the companies can design schemes that can cover rural youth for at least Rs.50, 000-Rs.1 lakh for a period of minimum 10 years. Currently, only 8-10% rural households are covered under life insurance schemes and remaining 90% can be targeted for these insurance schemes. According to ASSOCHAM, rural youths, income has risen due to shifting of its occupation from agriculture to non-farm agricultural income and it has

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become an important facet of rural India. This income mainly comes from dairy, food processing and packaging, commodity trading and infrastructure development income. The non-agriculture base of rural occupation and income have been growing in rural GDP figures that are estimated at 45%. In view of rural investors rising income, they have now more buying capacity than before. The FIs can lure them for renovation and modernization of their housing at 6-7% rate compared to 10-12% rate in urban India. Rural masses are in need large sums for the marriages in their families and other close relations and personal loan at affordable rate will be an ideal choice for them. Rich farmers who have benefited from agriculture, farming, dairy processing & other sectors are using tractors, jeeps, tempo etc. for loading and unloading their crops and other products to traders. These farmers should be targeted for Auto Loans and the repayment of these loans should be between 6-7 years with easy interest rates. According to ASSOCHAM, rural Life Insurance business could rise to US$ 20 billion and the non-life insurance to US$ 15 billion by 2010. The Chamber has also holds that a 500% increase in the size of current Indian insurance business of US$ 10 billion to US$ 60 billion by 2010 is quite likely in view of demand factor. The rural market offers tremendous growth opportunities for insurance companies and insurers should develop viable and cost-effective distribution channels; build consumer awareness and confidence. Nearly 20% of all farmers in rural India own a Kissan Credit cards. The 25-30 million credit cards offer a huge data base and opportunity for insurance companies. An

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extensive rural agent network for sale of insurance products could be established. The agent can play a major role in creating awareness, motivating purchase and rendering insurance services Being an agrarian economy again there are immense opportunities for the insurance companies to provide the liability and risks associated in this sector. The Paper found that the rural markets are still virgin territories to a great extent and offer exciting opportunities for insurance companies. The surest path to success is to judge and measure the requirements of the people correctly and offer a scheme that they would be able to afford. ASSOCHAM has therefore felt that this is the opportune time for the public and private insurance companies to enter into rural India in a big way by introducing easy premium schemes in life insurance and for agri insurance, auto insurance etc. According to ASSOCHAM, the big challenge for FIs and insurance companies is to design rural saving products which will cater to seasonal and unpredictable inflows of money. However, personal cash flows are getting more predictable with increased services share in the rural economy. To reach the rural investors, ASSOCHAM has suggested that the FIs and insurance companies should interact with local government/development agencies, as well as Panchayats and identify various products for the preparation of the Service Area Credit Plans in the rural areas. They can also organize local groups like Village Development Councils and Farmers Club and these bodies should act as a bridge between them and the rural investors and ensure that the products developed match the demand of local clients. These bodies should have rural educated workforce which will
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be used for better delivery and distribution of small products by adequate awareness. Rural women could also be included into distribution network and they would be ready to work in minimum monthly income of Rs.10001200 with efficiently and sincerity. If distribution network can be built around this theory then wider distribution of small savings products can be enhanced in a low cost manner and unserved markets can be addressed by formal institutions. RURAL BANKING AS CATALYST While public investment in agriculture has declined to 16.2 per cent, the rural banking system has been encouraging farm development through provision of credit facilities for production of crops including horticulture, plantation, forestry; purchase of farm equipment; livestock and fish farming; irrigation facilities and installation of diesel engines, and so on. Bank credit is also provided for establishing village/cottage industries, stocking/supplying farm inputs and cattle-feed, and business and trade purposes. From 1969-70 to 1999-2000, up to Rs 3.1 crore has been provided to the farm sector. With enhanced incomes, and further supplemented by bank credit, the rural population is acquiring consumer durables, constructing houses, purchasing vehicles, computers, and so on. All these assets need to be protected from damage/loss, natural or manmade. Thus, the rural areas offer enormous opportunities for committed private insurance companies in both life and non-life insurance schemes. This will, in turn, help create more that would have direct impact on rural

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development and the country's economic growth, in general. In fact, insurance in the farm sector should benefit from the advances of science and technology as well. LIC in the last decade has evolved a number of products which, however, do not suit the needs of the rural areas. Similarly, the four GIC subsidiaries have also been providing insurance cover for specific kinds of assets owned by rural households through bank credit. But more has really put in the required marketing effort in the villages. The claim lodgement and settlement procedure is time-consuming and cumbersome. Cattle insurance under the government-sponsored Integrated Rural Development Programme and crop insurance (till now covering banks' loans) have not met with the expected results. Valuable data and information on rural areas has been available on the rural areas through the publications/surveys of the Central Statistical Organization, National Sample Surveys, National Council of Applied Economic Research, and so on. From 1989, the National Bank for Agriculture and Rural Development has been formulating Potential Linked Credit Plan, and the Lead Bank has been the Annual District Credit Plan that give considerable insights into the Government's plans for farm and rural sector development. Besides, the village profile available with each of the branches of nationalized / public sector banks contain exhaustive data on the population, cultivating households, categories of farmers, and classification of workers, livestock, cropping pattern, farm Equipment and machinery and so on. There are more than 1,75,000 rural credit outlets in addition to the offices of

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the District Rural Development Agency, the District Industries Centre, the District Development Manager of nationalised banks and Lead District Manager of the Lead Bank. All these institutions and agencies can offer considerable information to insurance companies. Educated unemployed youths of the villages can be trained and become valuable assets for the companies. While insurance companies are eager to build their business in the urban areas, there is a hitherto untapped potential for business in the rural areas which can be exploited. The Centre and the State governments must encourage private and foreign insurance companies to enter the rural areas, and provide protection to rural assets from damage and loss due to natural and man-made calamities. For this purpose, reasonable and need-based concessions/reliefs in taxations and subsidies required infrastructural facilities and administrative support must be extended, at least for ten years. The government may consider appointing an Expert Committee on Rural Insurance to work out the modalities for private and foreign companies interested in entering the rural areas.

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8. BIBLIOGRAPHY Books: INDIAN INSURANCE INDUSTRY TRANSACTION AND PROSPECTUS, D.C. SRIVASTAV & SHASHANK SRIVASTAV INSURANCE THEORY AND PRACTICE, NALINI PRAVA TRIPATHY & PRABIR PAL INSURANCE MANAGEMENT, SURENDER MANOLA. News Papers: 1 Economic Times 2 Times Of India WEBSITES: 1. www.rediff.com 2. www.khoj.com 3. www.google.com
4. www.yahoo.com

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