Kerala moves to expedite Rs 500-crore natural disaster insurance scheme

THIRUVANANTHAPURAM: The Kerala government is moving to expedite a Rs 500-crore insurance scheme to provide financial protection against losses caused by natural disasters. A core committee comprising three IAS officers has been constituted to implement the comprehensive group insurance scheme. The proposed scheme includes parametric insurance for financial protection during natural disasters and indemnity insurance for BPL families. The premium for the scheme will be met from the Consolidated Fund and the Chief Minister’s Distress Relief Fund.

The insurance scheme will be implemented under the World Bank-assisted Resilient Kerala programme. The core committee comprises Finance Additional Secretary Jeromic George, Disaster Management Commissioner V. Vighneshwari and Rebuild Kerala Deputy CEO Sandeep Kumar. It will be responsible for preparing the eligibility criteria and tender documents, evaluating the tender and coordinating among various departments.

The insurance scheme is being introduced on the lines of the model adopted in Nagaland, amid concerns that expenditure on emergency rescue operations, relief, rehabilitation and reconstruction following natural disasters could affect the state’s financial stability. Under the parametric insurance component, individual assessment of the damage caused to each house will not be required. The insurance amount for relief and rehabilitation will be made available to the government first. The coverage will be based on the average amount spent by the state on natural disaster relief over the past decade. The policy will have a five-year term.

Under the indemnity insurance component, BPL homeowners will be eligible for compensation in the event of heavy rain, floods or winds. The cover will be up to Rs 10 lakh and will include damage to the house and household articles, as well as rent incurred until repair work is completed. The parametric insurance cover of Rs 500 crore is expected to involve an annual premium of Rs 15 crore to Rs 40 crore, while 32.3 lakh BPL families will be covered at a premium of Rs 250 per household, amounting to Rs 80.75 crore annually. The total annual expenditure on the two insurance components is estimated at Rs 120.75 crore.