A PRESENTATION ON THE TOPIC OF

OBLIGATIONS OF INSURER IN
RURAL SECTOR
BY
RANJIT BEPARI
 Now the insurance sector is open to
private insurers, an insurers who is
registering under Insurance Regulatory
& Development Act (IRDA),1999 for
carrying on general insurance business
will have a minimum paid up capital of
Rs.100 crores.
 Under these provision section 32B and
32C of insurance Act 1938 provides that,
every insurer have to do certain
percentage of life insurance and general
insurance business in the rural or social
sector, as may be specified by the
Insurance Regulatory & Development
Authority.
 The underwrite the business in the
rural sector, to the extent of at least
2% of the total gross premium in the
1st Financial Year, at least 3% of the
gross premium in the 2nd Financial
Years and 5% of the gross premium
in the 3rd and further Financial
Years. The obligations include crop
insurance also.
 In case of existing insurers, the
minimum business is to be decided
by the IRDA in consultation with
insurer.
The Rural sector has been defined as
any place, which as per latest
census, rural area is an area in which
the population is not more than 5000
and has a population is not more
than 400 per square kilometer and
 at least 75% of the male working
population is engaged in agriculture
sector.

Crop insurance is classified under

“miscellaneous” category of general
insurance field, for which it is
mandatory to keep aside 50% of
premium as reserve.
 Types of Agriculture Insurance:
Agricultural insurance covers a wide
spectrum of activities like
horticulture, plantations, livestock,
poultry, aquaculture, sericulture,
etc. Further, it extends to the entire
production process including post-
harvest storage, processing and
transportation of produce to the final
markets.
 Some of the agriculture insurance Schemes
presently available in the country are:
i. Crop insurance

ii. Horticulture/ Plantation insurance

iii. Cattle insurance

iv. Sheep/Goat insurance

v. Pig insurance

vi. Poultry insurance

vii. Sericulture insurance

viii.Apiculture(shrimp/prawn) insurance

ix. Farmers’ Package insurance

x. Agriculture pump-set insurance

 Organizations transacting Agriculture
Insurance in India:

i. National Insurance Corporation of India

ii. New India Assurance Company Limited
iii. Oriental Insurance Company Limited
iv. United India Insurance Company
Limited
 With passing of Insurance Regulatory &
Development Act (IRDA)-1999, a door has
opened for entry of private insurers. The
License for a private insurer was issued during
October,2000. Some of the private insurers in
the in the general insurance are:
a. Reliance
b. Tata-AIG
c. Royal Sundaram
d. Iffico-Tokio Marine
e. Bajaj-Allianz
f. ICICI-Lombard, etc.
 As per the stipulations and norms of
IRDA, every new insurer in the general
insurance industry, shall do at least a
minimum amount of business in the
social sector, which includes crop and
agriculture sector.