Insurance issued through AICI is compulsory for all farmers who access seasonal crop production credit from the lending institutions and is voluntary for non-loanee farmers. NAIS has three overall objectives: (1) provide a measure of financial support to farmers in the event of crop failure as a result of an insured peril; (2) to restore the credit eligibility of farmers after a crop failure for the next season; and (3) to support and stimulate the production of cereals, pulses and oilseeds.
Litigation resulting from AICI’s denial of claims resulting from the March 2014 hail storm was later considered by the Madhya Pradesh High Court. The bench of justices SK Gangele and Sheel Nagu ordered the company to process all the farmers’ claims under the scheme and compensate for the losses. This marked the first time that insurance claims for crop loss due to hailstorm were ordered to be paid by AICI.