Community Managed Micro Insurance

Telangana

Genesis of Micro Insurance for the Self Help Group Members


Udayasree –a Self Managed Community Based Micro-Insurance Interventions” Viainagaram

In fact Micro- Insurance for the SHG women sprouted in Vizianagaram District for the first time. In the Year 2003 –04 Zilla Samakhya initiated this innovation under the banner of ‘Udayasree’ which came out as the risk mitigation mechanism to protect the rural poor women in case of a sudden demise of SHG members which is happening very frequently as noticed by the members.  

In Vizianagaram District 347124 women organized into 25659 Self Help Groups. These Self Help Groups federated themselves into 1251 Village Organizations incorporated under AP Mutually Aided Cooperative Societies Act 1995 which in turn federated into 34 Mandal Mahila Samakhyas, and all the Mandal Samakhyas are confederated into Zilla Mahila Samakhya at District level. Eventually the SHGs and their federations are empowered to play an active role in insurance operations, to reduce rural people’s vulnerabilities and to protect their income and asset base, by creating an enabling environment for self management by the community itself. With this social infrastructure of the peoples’ net-work, the implementation of the innovation is made possible. In fact all the members of the SHGs and their federations are poorest of the poor who are denied all the opportunities for development on the pretext of poverty.

UDAYASREE is a community based mutual benefit assurance scheme totally managed by the Zilla Samakhya, Vizianagaram in collaboration with LIC. The success and popularity of the schemes paved way for other districts to start similar schemes. The scheme aims at providing relief to the immediate family members of the deceased SHG women. The scheme assures payment as follows:

Natural Death Rs. 30,000.00
Accidental Death Rs. 75,000.00
Permanent Disability of both the limbs/eyes Rs. 75,000.00
Permanent Disability of one limp / eye Rs. 37,500.00

Year wise Coverage

Year Total No. Enrolled Claims Settled Amount
2003-04 26,853 82 16,50,000.00
2004-05 51,178 226 46,32,500
2005-06 64,929 313 66,20,000
2006-07 75,049 245 53,70,000
2007-08 221000 602 1,65,90,000

Total

3,48,62,500


ABAYA - CHANGE IN THE LIFE - FROM UNSECURED TO SECURED” CHITTOOR MODEL

In the year, 2005, in one of the meetings of Zilla Samakhya Executive Body, the President of Mandal Samakhya Ramsamudram Smt. Alivelu raised the issue of death of one of the V.O. leader in her Mandal Samakhya and how the deceased VO leader’s family suffered a lot. She narrated that due to untimely demise of the VO leader, the school going children have became school drop outs and the husband of the deceased VO leader got married another women within a month and the children of the deceased VO leader have been looking after by the maternal grand mother who is widow and old lady without no one to look after her as the deceased VO leader was the only daughter. Now the children and mother of the deceased VO leader were helpless and requesting the Mandal Samakhya to provide some financial help to continue their lives and also to continue the study of these children. She finally requested the Zilla Samakhya Executive Body to extend some financial help to these helpless poor people. The Executive Body of Zilla Samakhya discussed this issue at length and came to a conclusion that when our people purchasing the Animals under SHG Bank Linkage that animal was insured, if that animal was died, the SHG member can buy new animal with the amount settled by the Insurance Company and sustaining no loss, in the similar lines, if our members lives also insured, if any tragedy occurred, the family and children may be saved from the suffering. After deriving the idea of insuring the lives of the SHG members, the Zilla Samakhya and Officials of the Project discussed the issue with different Insurance Companies and studied the policies available in the market and finally formulated one unique insurance scheme under the name “Abhaya Insurance”, tie-up with Life Insurance Corporation of India, Kadapa branch.

In Chittoor District 6,28,214 women formed into 56,138 Self Help Groups. These Self Help Groups organized themselves into 1,935 Village Organizations incorporated under AP Mutually Aided Cooperative Societies Act 1995 which in turn federated into 65 Mandal Mahila Samakhyas. And all the Mandal Mahila Samakhyas are confederated into Zilla Mahila Samakhya at District level.

With this social infrastructure of the peoples’ net-work, the implementation of the innovation is made possible. In fact all the members of the SHGs and their federations are poorest of the poor who are denied all the opportunities for development on the pretext of poverty. It is strongly believed that people have the potential to come out of poverty, provided timely facilitation is ensured and even they deserve access to relevant and affordable insurance and be protected from risks on death / disability. It is a fundamental human right that every person is insurable.

  •  In Chittoor District through this community based insurance in the year 2006 1,26,150 SHG members were insured with a total premium of Rs. 63,07,500/-. During the year 2006-07 the following claims have been settled.
  •  Including scholarships sanctioned to 16,509 students who was studying Class IX to Inter @ Rs. 900/- per student Rs. 1,48,58,100/-., the claim settled thus.
    Premium paid Rs. 63,07,500/-
    Claim settlement Rs. 1,98,30,000/-
    Scholarship Rs. 1,48,58,100/-

    Total

    Rs. 4,09,95,600/-

  •  With the experience gained in the year 2006-07 the Zilla Samakhya have enrolled the Spouses of SHG Women also along with SHG members as the death rate in male is more when compared to female. Accordingly, in the year 2007-08 two types of policies have been taken.
    1. For single women (single policy)
    2. Both wife and husband (dual policy)

The unique feature of this intervention is the entire process of service delivery system is totally administered and monitored by the Community Based Organizations for the benefit of their members by collecting nominal service charges of Rs.10/- from each applicant.

The entire process of insurance is done by the community that is from enrollment of members, collection of premium, Service Charges, payment of premium to the LIC and collecting data of deaths by the Call Center, claim settlement process through community (Bima Mithras), disbursement of claim settlement amount to nominees by community – collecting and submission of data of school going children, and disbursement of scholarship.

In fact credit goes to Sri.Raghunandhan, the then Project Director, DRDA,Chittoor for establishment of Call Center , positioning of “Abhya Mithras’ and developing software with a sole objective of providing insurance services to the insured through ‘Abhya Mitras’ selected from active SHG members. The responsibility of Abhya Mitras is to enquire into each claim of death and disability and after the confirmation of the death as per the insurance regulations hand over an amount of Rs.5000/- as initial solatium.

Developement Process

SERP, after careful examination of the insurance programs in Vizianagaram and Chittoor Districts, encouraged the rest of the Districts to implement the similar insurance interventions in tie up with Micro- Insurance Providers. As a result, motivated by the experience of Vizanagaram and Chittoor the pioneers, Visakapatnam, Nizamabad under the banner of ‘Barosa’, Karimnagar under the banner of Kutumbarakha, Kadapa under the banner of ‘Janapriya’, Nellore under the banner of ‘Santhwana’ West Godavari, East Godavari, Khammam Zilla Samakhyas replicated the intervention with their own models/ products with various insurance service providers. The Schemes, systems and procedures differed from district to district. The collection of premium, service charges mostly depended on the choice and availability of the schemes / products in the micro-insurance market at that time.

In this context, SERP, with the objective of universalizing the intervention in all the 22 Districts with uniform products, protocols and procedures, established an exclusive Micro- Insurance Unit with experienced and senior professionals drown from the Government as well as from the development sector to execute and monitor the entire process of micro insurance interventions for life, disability, health, cattle etc for the ultimate benefit of the Community at large.

Ever since, the Micro-Insurance Unit has made exhaustive field visits to the districts to study the schemes/ procedures/ beat practices etc. With the launch of Aam Aadmi Bima Yojana’ SERP could achieve the objective of univesalization of insurance activities across all the 9 Districts in Telangana. SERP has signed a Memorandum of Understanding (MoU) for the first time with Life Insurance Corporation of India for ensuring effective and quality Service. Standardization of the protocols and evolving operational systems by establishing Call Centres, ZS Insurance Sub-committees, positioning of Bima Mithras and an exclusive Anchor Persons for each and every District took place subsequently.