FM Asks Insurers for Speedy Settlements Under PMJJBY and PMSBY

The Finance Minister, Smt. Nirmala Sitharaman conducted a review meeting through video conferencing with the heads of insurance companies on Saturday. In the meeting, the Finance Minister asked insurers to speed up the sanctioning of the claims under Pradhan Mantri Suraksha Bima Yojana (PMSBY) and the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY).

The Finance Minister directed the insurance companies to process claims under the PMJJBY and PMSBY in seven days. Until now, the insurers had a 30 days time period to process the claims under these two schemes. 

The Finance Minister also stressed streamlining the documentation requirements and accelerating the disbursement process of the pending claims under the PMJJBY. She stated that there needs to be end-to-end digitisation of the claim settlement process between the insurance companies and banks.

The Finance Minister appreciated the initiatives taken by the insurance companies for facilitating the claims processing under the PMJJBY and PMSBY during the pandemic. The initiatives include the process for claim document transmission through email and mobile application, thus eliminating delay caused by the paper transmission. 

The Finance Minister asked the public sector insurance companies to implement an API-based App by June 2021 for claim transmissions. She even stated that there would be the issue of the simplified claims process and rationalised forms shortly. Currently, the banks issue the insurance policies to their account holders, and the premium is auto-debited from the bank accounts.

The Finance Minister stated that there would be consideration of an attending doctor’s certificate and certificate issued by the District Magistrate (DM) or authorised officer in place of the death certificate for claim settlement. She asked the insurance company officials to continue being sympathetic while giving services to the nominees of the deceased policyholders, especially during the current pandemic period.

The government launched the PMJJBY and PMSBY in 2015. The PMJJBY provides a life insurance cover of Rs.2 lakh for all beneficiaries with an annual premium of Rs.330. The PMSBY provides an accidental insurance cover of Rs.2 lakh for the beneficiaries with an annual premium of Rs.12.

The objectives of the PMJJBY and PMSBY are to ensure that many persons working in the unorganised segment obtain the financial security of Rs.4 lakh totally by enrolling under both these schemes.

Under the PMJJBY, there is a payment of a total of 4.65 lakh claims valuing Rs.9,307 crore. From the starting of the COVID-19 pandemic, i.e. 1 April 2020 onwards till date, there has been payment of Rs.1.2 lakh claims amounting to Rs. 2,403 crore under the PMJJBY at a disposal rate of 99%. Under the PMSBY, there has been payment of a total of 82,660 claims valuing Rs.1,629 crore as of 31 May 2021.

In the meeting on Saturday, the Finance Minister also reviewed the progress made under the Pradhan Mantri Garib Kalyan Package (PMGKP), an insurance scheme for health workers fighting COVID-19. During the review, the Finance Minister observed that under the PMGKP scheme, there is a payment of 419 claims to date, amounting to Rs.209.5 crore disbursed to the account of the nominees. 

The enrollment number of the PMJJBY is 103 million subscribers and under the PMSBY is 234 million subscribers. The faster processing of the claim amounts under these schemes will provide much-needed financial relief to the nominees who have lost their near and dear ones to COVID-19. 

The finance minister also directed the states to undertake COVID-19 claims of health workers on a priority basis. The meeting helped to ease and speed up the claims process of the PMJJBY and PMSBY. The government’s steps will enhance the speediness of the claim settlement process. 

The faster claim processing of the insurance amount under the PMJJBY and PMSBY will help nominees of the beneficiaries of these schemes in these difficult times. The steps undertaken by the government in the meeting will provide some relief to the nominees, especially when the claim settlement can be done online without an extensive process.

For any clarifications/feedback on the topic, please contact the writer at mayashree.acharya@cleartax.in