After obtaining the green signal from the Centre, the Maharashtra government has chosen to execute the Pradhan Mantri Fasal Bima Yojana (PMFBY) in the arrangement of what’s known as the “Beed Model”.. The model, which was first experimented on Beed, entails insurance firms returning a portion of the premium collected in the event compensation payout falls below some ceiling.
Back in 2020, drought-prone Beed in Maharashtra failed to attract bids for implementing the PMFBY scheme. The public authority controlled Agricultural Insurance Company was approached to carry out the scheme with a few changes. If the compensation amount crossed 110 per cent of the volume insured, the state government would bridge the excess; however, if the compensation calculated fell below the premium collected, the company was to return 80 % of the premium accumulated to the state government. The 20 per cent amount accounted for the business’s administrative costs.