The Insurance Regulatory and Development Authority of India (Irdai) has come out with the concept of model insurance villages to increase insurance penetration in rural areas with special focus on agriculture and allied activities with the financial support of various institutions like Nabard and CSR funds.
- Through this initiative, the idea is to offer comprehensive insurance protection to all the major insurable risks that villagers are exposed to and make available covers at affordable or subsidised cost.
- The IRDAI’s discussion paper says that the concept may be implemented in a minimum of 500 villages in different districts of the country in the first year and increased to a minimum of 1,000 villages in subsequent two years.
Background
- India is predominantly rural with more than 65 per cent of the population residing in rural areas.
- Most rural people are hardly aware of insurance as a concept nor have they experienced the benefits of insurance.
- In rural areas, agriculture and allied activities are the main occupations and the prime source of livelihood.
- The target segment of rural insurance consists largely of low-income households or individuals who have little savings and limited financial capacity.
(References: Mint and Indian Express)
