Actualidad Colombia

Incentives for farming insurance premiums

External Regulatory Circular P-11

In its capacity as administrator of the National Agricultural Risk Fund (FNRA), the Agricultural Sector Fund (Finagro) has added new instructions to its Service Manual, affecting agricultural insurance. These instructions set out the main parties in agricultural insurance, describing what is meant by insurance company, policy holder, insured party and beneficiary. The insurance policy may be taken out either on a person’s own behalf, by the farmers or by third parties, when the contract is entered into through a collective policy underwritten by the insurance company and, usually, a financial institution.

Distinction is made between small, medium-sized and large farmers when these are the insured parties, for the purposes of calculating the premium’s incentive percentage.

It also sets out the conditions of access to the agricultural insurance incentive, which include the activities that can be insured (for example agricultural crops, pastureland, forest plantations and cattle, pig and/or sheep breeding).

The new instructions in Finagro’s Service Manual specify the threshold figures for the incentive, the insurance payouts, the premium’s incentive percentage and the procedure for the payment by the insurance companies of 1% of the value of agricultural insurance premiums, as established in the Single Decree on the financial, insurance and security market sector.