Financial Daily from THE HINDU group of publications
Saturday, Sep 10, 2005
Financial Daily from THE HINDU group of publications Saturday, Sep 10, 2005 |
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Money & Banking
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General Insurance Industry & Economy - Natural Calamities Cover for Maharashtra students dents insurers, post-floods — Death claims, replacing lost textbooks, repairs to schools Radhika Menon
Mumbai , Sept. 9 THE Rajiv Gandhi Insurance Scheme, meant for students between standard one and standard twelve, is proving to be a losing proposition for insurance companies following an inundation of claims post the Mumbai floods in July. The scheme, run by the Government of Maharashtra, provides compensation of Rs 50,000 in the case of death, Rs 30,000 for disability and Rs 350 for loss of textbooks. The insurance scheme, created two years ago, is managed by Oriental Insurance and New India Assurance. At a premium of Rs 1.22 per child, the insurance scheme covers 2 crore children in this category. On an average, this works out to a total premium amount of Rs 2.44 crore. In fact, this year the insurers lowered the quote from Re 1.46 paise per child last year to Re1.22 per child. But the cost of textbooks that have been replaced so far amounts to Rs 3.11 crore. The claims of the 95 children who died would add up Rs 47.5 lakh. Mr Sumit Mallick, Secretary, Education, Government of Maharashtra, said that the scheme was a financial loss to insurance companies even before the floods. However, the prestige of getting a Government contract prompted the companies to continue the scheme. In the recent deluge in the State, 5.3 lakh students were affected and the losses in terms of damaged school rooms, infrastructure and textbooks have been pegged at Rs 60 crore as on September 1, 2005. NGOs that have been working towards providing students with the necessary assistance say that the scheme is not fool-proof. While the insurance scheme covers only textbooks, items such as bags, notebooks and uniforms are not provided for. Many school buildings were affected in the districts such as Thane, Raigad, Kolhapur and Satara. Mr Mallick said, "A total of 6,439 school rooms were damaged. We estimate the cost of repair at Rs 34 crore. Replacing computers and other lab equipment will cost us about Rs 16.5 crore." Ms Nisreen Ebrahim, Managing Trustee, Rangoonwala Foundation India Trust, involved in the relief operations said that the insurance scheme had partially helped. The funds from NGOs and corporates were being directed towards providing children with school kits and uniforms. Bombay Dyeing, for instance, supplied 70,000 school uniforms, she said. However, official figures often ignore students in the non-formal education segment, said Ms Nisreen. The Rangoonwala Foundation, for instance, has provided school kits to 913 children from schools and 144 children from the area of non-formal education.
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