Question of the day

Agricultural producers and producer groups will be able to secure their financial interests against the risks specific to agricultural activities: excessive drought, hail, floods, torrential rain, pest attacks, animal diseases or pathologies. In the Official Gazette of 16 October this year was published Law No 183 of 11 September 2020 concerning subsidised insurance in agriculture.

Thus, agricultural insurance premiums will be subsidised from the National Fund for the Development of Agriculture and Rural Areas. The subsidy rate will be determined on the basis of insurance premiums calculated in accordance with the special conditions for insurance of agricultural production risks, and will constitute 70 % of their amount, if the cumulative amount of subsidised insurance subsidies authorised for payment in the year preceding the conclusion of the insurance contract constituted up to 6 % of the size of the Fund.

According to the law, insurers are legal persons holding licences issued by the National Financial Market Commission to carry on the activity of insurance in the category ‘non-life insurance’ and who, on the basis of the insurance premiums received, pay compensation for the damage caused by the insured risks provided for by the law.

Sum insured in the case of the harvest of agricultural crops: product of the volume of the forecast average harvest per hectare and the anticipated market price for the harvestif the parties do not agree on a lower amount of cover. Average harvest the forecast per hectare shall be calculated as the average yield of the agricultural crop to be insured, obtained by the farmer in 3 of the last 5 years, excluding the year in which the highest harvest was obtained and the year in which the lowest harvest was obtained.

At the same time, at the request of the insurer, the insured person or AIPA, the parties shall recalculate the forecast harvest if, as a result of factors other than those against whom they are insured, it appears that the crop will either be less than 75 % of that forecast or be more than 50 % higher than that forecast.

In accordance with the law, insurance premium shall be determined in accordance with the basic rates applied to the sum insured; and includes the insurer’s management costs, which may not constitute more than 15 % of the value of the premiums written per contract;.

The insurer may agree to pay the insurance premium in trancheswithin the period indicated in the insurance contract.

The law will be implemented in three months’ time, on 16 January 2021.

Source: monitor.fisc.md