Nagaland has become the first state in India to adopt a Disaster Risk Transfer Parametric Insurance Solution (DRTPS) following a Memorandum of Understanding (MoU) with SBI General Insurance.
About Disaster Risk Transfer Parametric Insurance Solution (DRTPS)
- Objective:
- To protect critical infrastructure.
- To reduce economic losses resulting from extreme weather events.
- Tenure and Coverage:
- The MoU is valid for three years, from 2024 to 2027.
- The insurance premium will be paid by the Nagaland Government.
- In case of a disaster, the insurer will provide support as per the policy terms.
- Significance:
- Addresses the rising frequency of extreme weather events due to climate change.
- Aims to enhance financial resilience and ensure safe livelihoods for sustainable development.
About Parametric Insurance:
- Definition: A type of insurance that provides predefined payouts upon the occurrence of a specified event, such as a natural disaster.
- Functionality:
- Covers the probability of a loss-causing event.
- The payout is predetermined and based on the occurrence of the insured event.
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Frequently Asked Question:
What is the main objective of Disaster Risk Transfer Parametric Insurance Solution (DRTPS) in Nagaland?
The main objective is to protect critical infrastructure and reduce economic losses resulting from extreme weather events.
How long is the Memorandum of Understanding (MoU) between Nagaland and SBI General Insurance valid for?
The MoU is valid for three years, from 2024 to 2027.
Who will be responsible for paying the insurance premium under the DRTPS in Nagaland?
The insurance premium will be paid by the Nagaland Government.
What is the significance of adopting the DRTPS in Nagaland?
It addresses the rising frequency of extreme weather events due to climate change and aims to enhance financial resilience for sustainable development.
Can you define Parametric Insurance in relation to the DRTPS in Nagaland?
Parametric Insurance is a type of insurance that provides predefined payouts upon the occurrence of a specified event, such as a disaster. In Nagaland, this insurance solution will provide support based on predefined terms in case of a disaster.