Proposal to establish model insurance village in India

International Desk | Published: 2021-05-08 17:50:17

The Insurance Regulatory and Development Authority of India has proposed to set up model insurance villages across the country to increase insurance penetration at the rural level and its contribution to GDP.

According to the Press Trust of India, the idea was mooted by the country's insurance regulator, IRDAI, in a discussion on insurance in rural areas with a special focus on agriculture and related activities.

The regulator says the concept of a standard insurance village could be implemented in at least 500 villages in different districts of the country in the first year and the project could be expanded to at least 1,000 villages in the next two years.

According to the concept paper, villages should be carefully selected considering various relevant aspects and parameters for the successful implementation of the concept over a period of three to five years.

In this case, every non-life insurance and reinsurance company needs to be involved in introducing the concept of an office and efforts should be continued in selected villages for a minimum of 3 to 5 years so that the insurance benefits are visible to that population.

The IRDAI says insurance companies can engage in dialogue with the state government and ministries, which conduct various development programs or plans for farmers, rural and vulnerable sections of society.

The Insurance Regulatory and Development Authority of India also mentioned in the memorandum that insurance companies can integrate insurance with such national development programs of the state government and the ministry.

The regulatory body's concept paper further said that the target market was mainly for rural low-income families or people with low savings and limited financial capacity.

The Insurance Regulatory and Development Authority of India (IRDAI) has invited partners to comment on the proposal by May 16.

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