Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) are the two insurance schemes launched under the Jan-Dhan Se Jan Suraksha program. Lauded for their affordability and accessibility, the delivery of these schemes has made formal insurance a reality for millions of low-income households. As of July 2024, the program has completed nine years, with a cumulative enrolment of 20.62 crore and 45.36 crore Indian adults under the PMJJBY and PMSBY schemes, respectively. Yet, in the last few years, customer protection issues have surfaced in the delivery of these schemes. Media investigations and reports have revealed several instances of banks charging customers’ accounts for the two insurance schemes without their consent. At the same time, the structural issues on the supply side are a significant part of the problem that discourages providers from adequately servicing customers of these two insurance schemes. These issues pertain to the incentive structure for financial intermediaries, the distribution channel that restricts Non-Banking Financial Companies (NBFCs) and other grassroots organisations from playing the role of intermediaries in the sale of these products, customer selection and product pricing, and instances of frauds that make the sale and servicing of these schemes a challenging proposition for the provider. The objective of this policy brief is to summarise learnings from fieldwork conducted in Rajasthan and Gujarat towards (i) building evidence on the customer protection issues in the sale and servicing of the two insurance schemes and (ii) bringing to the forefront the structural issues on the supply-side that are holding back Financial Service Providers (FSPs) from offering high-quality service in the context of these two schemes. Addressing the issues in the structural design and architecture of the two insurance schemes are crucial to the success of the program and curbing customer protection concerns. The policy brief lays out policy recommendations across four broad themes- structural design, process efficiency, market monitoring, and awareness and accessibility.
For policy brief, click here
For slide deck, click here
