Govt to launch public sector insurance firm

This company will execute the government's general, life and medical insurance-based schemes for stakeholders like farmers, employees and beneficiaries from the Below Poverty Line and Above Poverty Line categories

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Govt to launch public sector insurance firm
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The insurance industry may soon have a new player--the Maharashtra government. The state government is planning to set up an insurance company in a joint venture with a public sector insurance company.

This company will execute the government’s general, life and medical insurance-based schemes for stakeholders like farmers, employees, and beneficiaries from the Below Poverty Line (BPL) and Above Poverty Line (APL) categories.

“The state government runs a number of insurance schemes. The Maharashtra government is examining the establishment of an insurance company to handle this. The company will take premiums for various covers and settle claims,” a senior state government official told DNA.

Finance minister Sudhir Mungantiwar confirmed that the idea was being contemplated. “We are in discussions with the public sector insurance companies… for a joint venture,” said Mungantiwar, adding this would help the state government benefit from a substantial corpus that was otherwise given to public and private sector insurers under its schemes.

The official said the state government would be able to cut costs. “The activity and authorization process will be the same but done by a company or trust controlled by the government,” he added. The state could either set up a company or a trust. 

The official pointed to how the Dr NTR Vaidya Seva Health Insurance Scheme in Andhra Pradesh and the Aarogyasri Health Care Trust in Telangana were implementing health insurance schemes in trust mode.

Officials, however, expressed concerns over the possibility of political interference in the claims payment process if the government ran insurance schemes. Also, there are worries over the state’s ability to approve claims.

The Maharashtra government covers various categories of beneficiaries like the 18 lakh state government employees who get medical and life insurance cover.

The Gopinath Munde Farmer Accident Insurance Scheme (GMFAIS) ensures the 1.37 crore land abstract holding farmers in the 10 years to 75 years age group. The farmers or their kin will get financial assistance for 13 perils like road and rail accidents, drowning, electrocution, lightning, murder, and snake or scorpion bites. The benefits will include Rs 2 lakh for death and Rs 1 or 2 lakh for disability.

The Rajiv Gandhi Jeevandayee Arogya Yojana (RGJAY), which is now rechristened after social reformer Mahatma Phule, is a PPP-based cashless mediclaim covering beneficiaries from BPL, APL and indigent categories.
Government vehicles and unorganized sector workers are also covered under insurance.

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