PARA 13.2 IC 78, Miscellaneous Insurance One Liner, Chapter-12 : Rural Insurance-I

PARA 13.2 IC 78, Miscellaneous Insurance One Liner, Chapter-12 : Rural Insurance-I

Insurance exams offered by the Insurance Institute of India (III), consist of various papers either in Life or Non Life or Combined. Here we are providing ONE LINER IC 78, Misc Insurance  Chapter 12: Rural Insurance I  for para 13.2 and III exam . These questions will be very helpful for upcoming promotional exam in 2020.

IC 90, Human Resource Management is a very important topic in insurance promotional exam. This IC 78, miscellaneous insurance paper comes in all GIPSA exams which makes it very important.


1.According to Section 32 C, every insurer shall provide insurance policies to the persons:

  • Residing in the rural sector
  • Working in the unorganized or informal sector
  • Who are economically vulnerable
  • Who belong to backward classes of the society and other category of persons
  • Such insurance policies shall include insurance for crops.

2.Every general Insurer is expected to ensure that the below mentioned percentage of the Gross premium Income, comprises of premium generated in the rural or social sector.

  • Two per cent in the first financial year (2%)
  • Three per cent in the second financial year (3%)
  • Five per cent in third to seventh financial years (5%)
  • Six per cent in the eighth financial year (6%)
  • Eight per cent in the ninth & tenth financial years and the financial years thereafter (8%)

3.Covers that are focused in covering the risks of the rural folk are known as rural insurances

4.Rural policies comprise the insurance of the following:

  • Cattle, sheep and goat, work horses etc., camels, poultry and shrimps and prawns.
  • Other livestock e.g. elephants, pigs, rabbits, etc.
  • Sub-animals e.g. silkworm and honey bee
  • Plantations e.g. rubber, tea, sugarcane, etc.
  • Horticultural crops e.g. grapes, oranges, apples, etc.
  • Property e.g. agricultural pump sets, etc.
  • Package covers, e.g. animal driven cart, rural accidents, farmers package etc.
  1. Small Farmers Development Agency (SFDA) and Marginal Farmers and Agricultural Labourers (MFAL) Projects.
  2. The Integrated Rural Development Program (IRDP) is a centrally sponsored scheme founded by the Central Government and the States on 50:50 basis
  3. The objective of the program is to assist the families below the poverty line in rural areas to cross this line by taking up self-employment ventures
  4. The following documents, amongst others, are required to be submitted in case a claim is reported:
  • Complete claim form
  • Death certificate from a veterinarian
  • Post mortem report if required by the company

10.Special schemes of insurance have been introduced for the IRDP Programme – Milch Cattle from 1977 and cross bred female calves, heifers and bullocks (agricultural purpose) etc. from 1980

  1. The word ‘Cattle’ for the purpose of insurance refers to the following animals whether indigenous, exotic or cross bred, within the age limit indicated.
  • Milch Cows – 2 years to 10 years
  • Milch Buffaloes -3 years to 12 years
  • Stud bulls (Cow / Buffaloes species) -3 years to 8 years
  • Bullocks (Castrated bulls and Castrated male buffaloes)-3 years to 12 years
  1. In case of scheme animals, the policy is issued as agreed value policy and claims are settled for 100% of sum insured
  2. Species Covers
  Death PTD Extra
Scheme Animals  (Indigenous / cross bred) 2.25%    (net) 0.85%(net)
Non-Scheme Animals (Indigenous / cross bred) 4.00% (gross) 1.00% (gross)
Exotic Animals 4.00% as above  plus 2.00% extra 1.00%



  1. Standard policy wordings for Cattle Insurance as per the specimen incorporated in the Agreement provided for indemnity only for death due to:
  • Accident (Inclusive of fire, lightning, flood, inundation, storm, hurricane, earthquake, cyclone, tornado, tempest and famine)
  • Diseases contracted or occurring during the period of this policy.
  • Surgical Operations
  • Riot and Strike

15.The policy could be extended to cover PTD on payment of extra premium:

  • Permanent Total Disability which, in the case of Milch Cattle results in permanent and total incapacity to conceive or yield milk.
  • PTD which in the case of Stud Bulls results in permanent incapacity for breeding purpose.
  • 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.
  1. Transit cover
  • For Scheme animals, no extra premium is to be charged for transit of animal from the place of purchase to the place of stabling. For nonscheme animals, the maximum distance was specified (not exceeding 80  km).
  • In case of transfer of animal during currency of policy, transit cover can be extended to the new owner without any additional premium in case transit is within 80 km.
  • In case the transit is for more than 80 km, an additional premium of 1% to be charged and such transit shoud ony be by road or rail and not by foot.
  1. Cattle Insurance Exclusions
  • Malicious or willful injury or neglect, overloading, unskillful treatment or use of animal for purpose other than stated in the policy without the consent of the Company in writing.
  • Accidents occurring and/or Disease contracted prior to commencement of risk.
  • Intentional slaughter of the animal except in cases where destruction is necessary to terminate incurable suffering on humane consideration on the basis of certificate issued by qualified Veterinarian or in cases where destruction is resorted to by the order of lawfully constituted authority.
  • Theft and clandestine sale of the insured animal.
  • Pleuro pneumonia in respect of cattle in Lakimpur and Sitasagar district of Assam.
  • Transport by air and sea.
  1. Cattle Insurance Special conditions
  • The company is usually not liable to pay the claim if death is due to disease occurring within 15 days from the commencement of risk.
  • Claim is not entertained unless the ear tags are surrendered to the Company
  1. The policy shall be void and premium forfeited if the insured:
  • Has not disclosed material facts, Has made a false claim or Has not observed the terms and conditions of the policy
  • Every insured animal must be in sound health and free from injury at the time of insurance or renewal.
  • The company has a right to inspect the animal and premises of the insure
  • In the event of illness or accident, the insured must cause the animals to be treated by a qualified Veterinarian and also give notice to the Company.
  • The Insured shall provide to every animal proper food, water and shelter and take precautions against loss. Each insured animal shall be given the same care and attention as if not insured.
  • On the death of insured animal the insured shall: Give immediate notice to the Company, Provide the Company with an opportunity of inspecting the carcass and Furnish particulars supported by Veterinary certificate as to proof of death, identity and value of the animal etc.
  • If there is any other policy covering the same animal, liability will be limited to the rateable proportion of the loss.
  • If the death of the animal was due to the negligence of any person, the Company is entitled to sue in the name of the insured and recover compensation from the person.
  • The company may cancel the policy and return the premium on pro-rata basis. The insured may cancel the policy and receive refund of premium as per short period scale (provided no claim has arisen during the current period of insurance)
  • Only differences as to the amount of loss shall be referred to arbitration.

  1. Claim procedure for non-scheme animals

In the event of death of an animal the insurer should be immediately informed and the following requirements should be furnished:

  • Duly completed claim form
  • Death Certificate obtained from qualified Veterinarian on Company’s form.
  • Post-mortem examination report if required by the Company
  • Ear Tag applied to the animal should be surrendered. The Companies should follow the principle of “No Tag – No Claim
  • The value of the animal should be established properly keeping in view age, etc.
  1. Claim procedure for scheme animals

Intimation of loss / death of animal should be given to the Company or Financing Bank immediately, within 7 days. Claimant has to furnish the following requirements within 30 days.

  • Duly completed and signed claim form along with ear tag.
  • Certification of death from Veterinary Surgeon or a Certificate jointly by any two of the following; subject to their declaration that they have seen the carcass and Ear Tag intact in the ear mentioning number thereof:

i)Sarpanch of the Village

ii)President or any other Officer of Co-op. Credit Society.

iii)Official of the Milk Collection Centre

iv)Supervisor / Inspector / Officer of any Banking or Credit Institution

v)DRDA or its authorized nominee.

vi)Secretary and Vice President of Panchayat

vii)Village Revenue Officer / Village Accountant.

viii)Headmaster of a primary school.

  • Post Mortem report, if conducted.
  1. Claim procedure for PTD claim
  • A certificate from the qualified Veterinarian to be obtained
  • The animal should be inspected by Company’s vet officer also.
  • Complete chart of treatment, medicine used, receipt etc. should be
  • Admissibility of claim to be considered after two months of obtaining Vet Doctor / Company Doctor’s Report. The Company’s Veterinarian should examine the animal and confirm PTD, before settlement of the claim.
  • The indemnity is limited to 75% of Sum (Note: Under cattle claims, no salvage is deducted)

23. Sheep and goat insurance: Sheep produce two different kinds of crops each year viz. wool and lambs.

i)Initiatives by various bodies

  • The Central Sheep and Wool Research Institute in Rajasthan is doing commendable work in breed improvement of sheep and disease prevention.
  • The Andhra-Pradesh Agricultural University Live Stock Research Station (Chittor) is doing research in developing sheep breed for mutton.
  • Sheep production programmes have been approved under IRDP projec
  1. Goat known as a poor man’s cow, produces an estimated 3% of the total milk production in the country, besides providing meat.
  2. At the National Dairy Research Institute in Karnal work is in progress for development of dairy goat.
  3. Sheep and goat insurance policy This provides indemnity against death of sheep and goats due to
  • Accident (including fire, lightning, flood, cyclone, famine, strike, riot and civil commotion) or
  • Diseast
  • Occurring or contracted during the period of insurance.
  1. Sheep and goat insurance Exclusions: willful neglect, intentional slaughter, theft, etc.

However, the following exclusion is specific to this policy:

  • Death due to Enterotoxaemia, Sheep Pox, Reinderpest, Anthrax, Foot and Mouth disease, Haemorrhagic Septicamia, Blackquarter.
  • These diseases are covered only if the animal is successfully inoculated and Veterinary certificate supplied to the company.
  1. Sheep and goat insurance Conditions: Goat and Sheep Insurance are done on the following premises.
  • The cover applies to all indigenous, cross breed and exotic sheep and goats in the age group of 6 months to 6 years (4 months to 7 years to scheme animals).
  • The premium rates normally charged are :

1)Indigenous animals 4% p.a.

2)Cross breed animals 5% p.a.

3)Exotic animals 6% p.a.

  1. Animals should be identified by metal ear tagging and/or tattooing method.
  2. Natural marks should be noted in the proposal and veterinary certificate.
  3. Poultry Insurance: Poultry means domesticated species of birds, reared for eggs, meat or feathers and includes chicken, ducks, geese, turkey, guinea fowls etc.
  4. ‘Poultry’ for the purpose of insurance refers to (a) layers (b) broilers and (c) parent stock (hatchery) which are exotic and cross bred.

33.Exotic birds mean those whose parents are of foreign breed.

  1. Poultry Insurance Premium rates vary according to:
  • Broilers
  • Layers
  • Parent stock and
  • Irdp scheme or non-irdp scheme
  1. Poultry Insurance Good Features discount

This discount not exceeding 5% may be allowed if the farm is having any five good features listed below:

  • Farms having Resident / own Veterinary officer or Farms managed by Veterinary Doctors
  • Farms with layer flock size of 10,000 batches and above. Farms with broiler flock size of 5000 batches and above
  • Farms having good dead bird disposal system i.e. farms with incinerator
  • Farms with standard layout such as good distance between sheds, fencing, wind breaker trees etc.
  • Farms with sophisticated equipment i.e. farms with automatic feeders, waterers etc.
  • Farms with mortality of less than 5% in previous batch.
  • Presence of thermo regulators to control temperature and humidity.
  1. Poultry Insurance coverage: The policy provides indemnity against death of birds due to:

Accident (including fire, lightning, flood, cyclone / storm / tempest / earthquake, strike, Riot, act of terrorism) or Disease contracted or occurring during the period of insurance

  1. Poultry Insurance Exclusions
  • Malicious / willful injury, neglect
  • Transit by any mode of transport
  • Improper management (including over-crowding
  • Loss / death due to natural mortality, non-specified or unknown diseases or reasons.
  • Undergrowth, cannibalism, action of predators like preying birds and carnivorous animal.
  • Theft and clandestine sale of birds
  • Intentional slaughter of the birds except in cases where destruction is necessary to terminate incurable suffering on humane consideration and to protect remaining healthy flock to reduce additional losses on the basis of certificate issued by qualified vet surgeon or in cases where destruction is resorted to by order of lawfully constituted authority, under intimation to Insurance Company.
  • Consequential loss however caused
  • Permanent and partial disablement of any nature
  • Loss of production.

38.Marek’s disease, Ranikhet disease, fowl Pox and infectious Bronchitis. These diseases are covered if the birds are successfully inoculated against these diseases and the necessary veterinary certificate is supplied to the company.

  1. Coccidlosis and other diseases are covered only if preventive and curative measures are taken from time to time.
  • Malnutrition / shortage of water, death due to starvation because of non-supply of food to birds or similar reasons of whatsoever nature.
  • Undergrowth
  • Cannibalism
  • Loss due to huddling and / or piling of birds
  • Avian Leucosis Complex (A.L.C)
  1. Poultry Insurance Underwriting
  • In addition to the proposal form a veterinary certificate is necessary. In case of layer farms having more than 5000 birds inspection of the farm is done by the Company’s own vet officer or panel Doctor.
  • All birds in the farm should be insured
  • The minimum number of birds prescribed should be maintained and all the birds are covered on flock basis and hence no identification is necessary.
  • Farms should have veterinary facility of their own or on consultancy basis.
  • Proper food, water and light should be provided for the birds.
  • The farms should not resort to replacement of birds in the affected sheds i.e. after claim is reported due to disease / any other reason.
  • The proposer must keep all the essential records such as daily stock register, mortality record, incidence of diseases, vaccination particulars etc.
  1. Poultry Insurance Claims: Claims are admissible only if the mortality due to insured peril in the flock exceeds the ‘excess’ limit prescribed.
  2. Daily mortality details should be submitted on weekly basis, failing which reports will be treated as ‘nil’ for that week. In the case of alarming death / outbreak of epidemic nature notice with 12 hours should be given and all birds segregated and produced for inspection.
  3. Duck insurance: Ducks in the age group – 6 months to 2 years – can be covered provided the farm has 100 or more birds.
  4.  Leg band identification is required.
  5. The indemnity is limited to 75% of the value of the bird at the time of death as per the table of values for different ages of birds, certified by the veterinarian.
  6. 46. Cover is against death due to accident or disease and the exclusions are more or less, similar to those in the ‘Poultry’ Policy.
  7. Aquaculture (shrimp/prawn) insurance: A market agreement was introduced with effect from 1.1.1999.
  8. Aquaculture (shrimp/prawn) insurance Coverage: The insurance covers only total loss or destruction of shrimp, prawns and is available as under:

Section I: Basic cover

It provides cover against only Total Loss of the Shrimp / Prawns due to the following:

  • Summer Kill, Pollution (from external source only)
  • Poisoning, Riot and Strike Malicious acts of Third Parties
  • Earthquake, Explosion / Implosion
  • Storm, Tempest, Cyclone, Typhoon, Hurricane, Tornado, Flood, Inundation, Volcanic eruption and / or other convulsions of nature.
  • Aircraft and other aerial devices or articles dropped therefrom, impact with any road vehicle, horses and cattle.
  • Terrorism
  1. Normal Premium rate for Section I is 3% for Cyclone prone areas and 2% for other areas. Premium rate for Section II is 4 % in addition to the rate for Section I
  2. Aquaculture (shrimp/prawn) insurance Exclusions: The company shall not be liable in respect of loss / death of subject matter due to or arising from or through:
  • Malicious or wilful injury, poisoning, negligence, error or omission by the insured or his family members or employees.
  • Improper and incompetent management and rough handling
  • Partial loss of any kind
  • Infidelity of any person, burglary, poaching and theft.
  • Natural mortality of the subject matter
  • Undergrowth and cannibalism.
  • Predators, competitors, weed fish and dangerous insects
  • Physical alteration / change of chemical status, pH factor and salinity of soil and water
  • Asphyxia
  • Clandestine sale or missing of Shrimp / Prawns
  • Loss of production and loss of profit
  • Consequential loss of any nature
  • Transit by any means
  • Use of wrong / excessive chemicals
  • War etc and nuclear perils
  • Diseases due to improper management and/or nutritional deficiencies.
  • Losses due to or resulting from Plankton Blooms (unless associated with natural climatic reasons)
  • Polyculture
  1. Period of cover and sum insured: Policy period is four and half months from the date of stocking of the post larve i.e. PL-15 to 20. No cover should be granted at a later date after stocking.
  2. Aquaculture (shrimp/prawn) insurance Warranties
  • The Shrimp/Prawn culture ponds should be prepared in accordance with prescribed, recommended and established practices
  • The Prawn/Shrimp seeds of PL 15 to 20 should be healthy and of good quality and selected in accordance with established and prescribed norms and tests and (purchased) from well – known hatcheries / sources.
  • The feed should be of high quality, procured from reputed firms.
  • The stocking density of Shrimp/Prawns should not be more than 8 per Sq. m in case of P. Mondon and 10 per sq. m in case of extensive / modified Extensive and 15 to 20 pcs. Sq. m in case of semi intensive.
  • If there is any suspicion of outbreak of any disease or catastrophic loss due to insured perils, then the farmer/insured should resort to premature harvest based on expert opinion and in consultation with the Company.
  • In all the aforesaid matters concerning farming practices, the norms, stipulations and guidelines recommended by competent Government authority, Fisheries Department officials, Research Institutes, Fisheries College etc. should be complied with.
  1. Underwriting considerations
  • The insured shall at all times exercise all reasonable care and diligence in the selection of employees and shall cause Shrimp / Prawns insured to have sufficient and proper feeding.
  • The water level of tanks, lakes and ponds should be maintained constantly at a level which is safe for Prawn Cultivation. The water movement must be regulated by suitable inlets, outlets and sluices.
  • The project area should have strong and sufficient bunds at all times and is supervised by adequate watch and ward staff under the supervision of a qualified technical person.
  • The insured shall not introduce or permit to be introducing any diseased or infected shrimp / prawn amongst the insured stock.
  • Immediate steps to eradicate diseases, epidemics and parasitic infestation.
  • Proper records are maintained on regular basis viz. stock position, Biomass, feeding, occurrence of disease and preventive curative measures taken, inputs and expenditures etc. Fortnightly declaration in the prescribed format to be submitted to the Company.
  • All the tanks / ponds of the insured should be covered by insurance without any selection. Further all the ponds should be identified properly and noted in the proposal form.
  • Depending on the period of culture the valuation table should be suitably drafted and incorporated in Policy
  • While arriving at production cost and peak value due provision is made for deduction for natural mortality.
  1. Aquaculture (shrimp/prawn) insurance Claims: The insured shall, upon the occurrence of any event giving rise to or likely to give rise to a claim under this policy, give immediate notice within 24hours to the Company, and shall within fourteen (14) days thereafter furnish to the company fully completed claim form, death certificate with details certified by an official of fisheries / MPEDA  or any marine Biologist or a graduate qualified in fishery science, Meteorological Report or any supporting document All dead Shrimp / Prawns should be produced without fail to the representative of the Company or any person authorized by the Company before disposal. Each and every claim is subject to a deduction of 20% from the amount of claims payable (excess clause)

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