LIVESTOCK INSURANCE IN INDIA
Compiled & shared by- DR. RAJESH KUMAR SINGH, JAMSHEDPUR
• Livestock farming involves numerous risks – natural, social and human.
• The uncertainty of livestock yields as a result of death of animals is one of the basic risks that every farmer has to face.
• Risks are simply future issues that can be avoided or mitigated and risk is always a probability issue whereas uncertainty is the lack of complete certainty, that is, the existence of more than one possibility. The true outcome/state/result/value is not known.
• The individual farmer with limited resources is seldom able to face such risks, and this result in disastrous losses.
• Livestock insurance, exists in many countries as an institutional response to nature induced risk.
• The importance of risk mitigation cannot be overstated as far as Indian farmers are concerned.
o In India, agriculture and allied activities such as animal husbandry continues to be the main source of livelihood for millions of households.
o A large majority of producers are small farmers.
• Livestock for their feed depends on the fodder production which depends on the monsoon which has been uneven.
• Apart from this, there is widespread incidence of diseases, drought, floods and fluctuations in market prices of livestock products which makes it a risky venture.
o A recent example is the incidence of Bird flu which resulted in a huge loss to the poultry industry.
• In this juncture, livestock insurance plays a vital role for maintaining the sustainability of the production.
• A concrete step for introducing crop insurance at the national level was taken only in October 1965 and livestock insurance was started after that in late 70’s.
Present status of Livestock Insurance
• For promotion of the livestock sector, it has been felt that along with providing more effective disease control and improvement of genetic quality of animals, a mechanism of assured protection to the farmers and cattle rearers needs to be devised against eventual losses of such animals.
• In this direction, the Government has approved a new centrally sponsored scheme on Livestock Insurance.A Centrally sponsored scheme of livestock insurance is being implemented in all the States with
twin objectives: providing protection mechanism to the farmers and cattle rearers against any eventual loss of their animals due to death; and demonstrating the benefits of insuring livestock to the people. The
scheme, which was introduced in 100 selected districts on pilot basis during 2005-06, has now been extended to 300 selected districts covering all states. The scheme benefits farmers and cattle rearers
having milch cattle and buffaloes. In 2010-11, Rs. 20.12 crore has been released up to December 2010 and 20.63 lakh animals were insured from 2006-07 to 2009-10.
TYPES OF INSURANCE IN LIVESTOCK SECTOR
• Livestock insurance in India is a multi-agency programme.
o General Insurance Corporation (GIC) along with its subsidiaries – United India Insurance Company Ltd., New India Assurance Company Ltd., Oriental Insurance Company Ltd., and National Insurance Company Ltd., is carrying out livestock insurance. The insurance market was liberalized only in the year 2000. After this, understanding the volume of business, private sector (BASIX-Royal Sundaram) have also entered into the market. The type of insurance, procedure, claim details, etc. are listed below.
• Cattle Insurance
o Under this insurance, animals are covered against death due to diseases or accident (including fire/lightning/famine/flood cyclone) surgical operation, strike, riot, civil commotions risk.
o Generally there are three types in it:
Cattle insurance,
Foetus (Unborn Calf Insurance) and
Calf heifer rearing insurance.
• Sheep and Goat Insurance
o This scheme is also governed under Market Agreement.
o 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.
o Earthquake and landslide covers are also provided. Standard and common exclusions apply as per Cattle Policy.
o Animals are identified by means of small brass buttons ear tags.
o Animals under scheme category enjoy certain benefits in premium rate and claim procedure.
• Pig, Horse, Donkey, Yak, Mule insurance etc., are also available.
• Poultry/Duck Insurance
o The cover is available to the poultry/duck farm owned by the farmers.
o Insurance covers all types of exotic and cross breed poultry birds and ducks against death due to accident (including fire, lightning, famine, riot and strike and civil commotion) or diseases as per Poultry Insurance Policy.
• Animal Driven Cart Insurance
o This insurance covers carts, tongas and coaches drawn by buffaloes, bulls, bullocks, horse, mule, donkeys and camels and also the animals pulling it. T.P. liability and death, disablement of the driver as per Animal driven cart Insurance pol
CATTLE INSURANCE
• The scheme covers the following animals, whether indigenous, exotic or cross-bred.
o Milch Cows and Buffaloes
o Calves / Heifers
o Stud Bulls
o Bullocks (Castrated Bulls) and Castrated Male Buffaloes
• Animals within a specified age group are accepted under the Standard Insurance Scheme.
• Sum insured under the policy will be the market value of the animal.
• Indemnity under the policy will be the sum insured or market value prior to illness whichever is less. The indemnity is limited to 75% of sum insured in case of a PTD claim.
• The basic premium rate per annum is 4% of the sum insured. Long term policies are also issued with long term discounts.
• The premium rates under the policy are concessional for covering animals under government subsidized schemes.
• Group discounts are also available.
Insurance Coverage
• The policy shall give indemnity for death due to.
o Accident (due to fire, lightning, flood, inundation, storm, hurricane, earthquake, cyclone, tornado, tempest and famine).
o Diseases contracted or occurring during the period of the policy.
o Surgical Operations.
o Riot and Strike.
• The policy can also be extended to cover PTD on payment of extra premium;
o Permanent total disability which, in the case of milch cattle result in permanent and total incapacity to conceive or yield milk.
o PTD which in the case of stud bulls results in permanent and total incapacity for breeding purpose.
o In case of bullocks, calves / heifers and castrated male buffaloes results in permanent and total incapacity for the purpose of use mentioned in the proposal form.
Documents to Effect Insurance Coverage
• Proposal form
• Veterinary health certificate from a qualified veterinarian giving the age, identification marks, health, and market value of the animal in the prescribed format.
Identification of Animal
• All insured animals should be suitably identified by natural identification marks and color should be clearly noted in the proposal form and Veterinarian’s Report.
• Ear tags made of suitable material are applied to the ear of the animals and the code number is entered into the Veterinary Health Certificate.
• Photographs of animals may be insisted in case of high value animal.
Claim Procedure
• In the event of death of an animal, immediate intimation should be sent to the insurers and the following requirements should be furnished:
o Duly completed claim form.
o Death certificate obtained from qualified Veterinarian on Company’s form.
o Postmortem examination report if required by the Company.
o Ear tag applied to the animal should be surrendered. The condition of ‘No Tag- No claim’ will be applied if the tag is not surrendered.
• Claim procedure for PTD claim
o A certificate from the qualified veterinarian to be obtained.
o The animal will be inspected by the company’s Veterinary Officer also.
o Complete chart of treatment, medicines used, receipts, etc. should be submitted.
o Admissibility of claim will be considered after two months of Veterinary Doctor / Company Doctor’s report.
o The indemnity is limited to 75% of sum insured.
SHEEP AND GOAT INSURANCE
Highlights
• All indigenous, crossbred and exotic sheep and goat will be covered under the Scheme.
Scope
• The policy provides indemnity against death of sheep and goats due to accident including fire, lightning, flood, cyclone, famine, earthquake, landslide, strike, riot or diseases contracted or occurring during the period of insurance.
Sum Insured
• The market value of sheep and goats varies from breed to breed, from area to area and from time to time.
• The examining veterinarian’s recommendations is considered as the proper guide for acceptance of insurance as well as for settlement of claims.
• Sum insured will not exceed 100% of market value.
Claim Procedure
• In the event of death, immediate intimation should be given to the Company and the Insured should furnish the following documents and required information.
• Duly completed claim form.
• Death certificate from a veterinarian on Company’s form
• Post-mortem examination report, if required by the Company.
• Ear tag wherever applicable.
POULTRY INSURANCE
Highlights
• This is a comprehensive insurance scheme applicable to poultry farms consisting of layer birds, broiler birds and parent stock (Hatchery) which are exotic and crossbred.
• All birds in a farm should be covered. After issuing policy, if additional birds are introduced in the farm, immediate notice to be given to insurer otherwise claim will be repudiated.
• The scheme is applicable to poultry farms consisting of minimum number of birds as specified.
The scheme is available for insuring birds in the following age groups
Broilers • 1 day to 8 weeks
• 1 day to 6 weeks
Layers • 1 day to 20 weeks
• 21 weeks to 72 weeks
• 1 day to 72 weeks
Hatchery Birds (Parent Stock) • 1 day to 72 weeks
• The premium rates are applicable on per cent basis which are applicable to the peak value of birds in the applicable categories.
• The sum insured is the peak value and for broilers it is Rs 45 and for layers Rs 75. There is a week wise valuation table in-built in the policy which is applied for calculating indemnity. In case of parent ,stock the same is negotiable.
• The policy is charactersied by excess and final indemnity is restricted to 80% (60% in case of Gumboro).
• The scheme is characterized by No claim discounts as well as good feature discount.
Insurance Coverage
• The policy shall provide indemnity against death of birds due to accident (including fire, lightning, flood, cyclone, storm, tempest, earthquake, strike, riot, act of terrorism) or diseases contracted or occurring during the period of insurance subject to the exclusions.
How to Effect Insurance
• Proposal form.
• Veterinary Health Certificate from a qualified veterinarian.
• All birds in the farm should be covered. Farm should follow standard package of practices, vaccination schedule, deworming and debeaking.
• Farm should maintain essential records as per insurers specifications.
Claim Procedure
• In the event of death of birds, immediate intimation should be given to the Company and the Insurer should be supplied with the following documents and required information:
o Duly filled in claim form.
o Vet. P.M. Report for sample birds.
o Daily records of mortality, feeding, etc.
o Purchase invoices for the birds.
o Any other point to substantiate the loss like photographs, medical bills, etc. as and when required.
• In case of alarming death/outbreak of epidemic nature, immediate notice within 12 hours should be given to the Company and all birds should be segregated and produced to the representative of the Company or to any person authorised by the Company for inspection.
• Daily mortality details should be sent to the Company on weekly basis failing which report will be treated as nil for that particular week.
• Delay in reporting of the claim should be avoided and if there is delay for more than three days the claim would be treated as non-standard.
• In case of doubtful claims/ farms for which claim ratio is adverse, Technical Report from an expert may be insisted for settlement of claim.
