New Purpose of Multi-Risk Crop Insurance After Orientation Act-Insurance

Parliament adopted an orientation law to amend multi-risk crop insurance Official newspaper March 3, 2022.

Its purpose is to strengthen the resilience of French farms in the face of climate change by building a universal risk management system, connecting states and insurance organizations and encouraging insurance policies. During 2023-2030, public spending from this new system will be part of the annual financial range of € 600 million.

Most of the technical provisions resulting from this Orientation Act are taken by the law or ordinance for the application set forth in January 2023 (L. no. 2022-298, art. 1er). In the case of crop damage caused by climate hazards that occurred before In January 2023, pre-law provisions will apply. Signed an insurance contract one day in advanceer January 2023 will be able to comply with the law if the operator requests it prior to April 2023. If this fails, the contract will automatically comply at the latest the following year when it is renewed.If the conditions for entry into force of the law do not meet 1er In January 2023, this date may be postponed to 1 by August 2023 (Article 17).

Possibility to combine insurance and public compensation

Crop insurance subscriptions remain free. In the event of damage to crops or crops due to climatic hazards, affected farmers will receive insurance coverage if a multi-risk contract is in place, as well as compensation based on national solidarity. If not insured, the operator will also be compensated based on national solidarity (created by C. rur., Art. 361-1, A, L. no. 2022-298, art. 2).

Encourage contract subscriptions

We recommend a multi-risk harvest contract subscription. Combined with the assistance provided by the European Union’s National Fund for Agricultural Risk Management (FNGRA), enrollment assistance will increase to up to 70% of premiums. The relevant insurance policies and the crops that are insured and likely to have access to these aids are determined by law.

The insurance policy in question must include a deduction of at least 20% of the operator’s average annual production. The decree sets the level of applicable deductions depending on the type of crop, the type of production, or the minimum surface area criteria per contract (C. rur., Art. L. 361-). 4mod. By L. Art 3).

Insurance companies that provide these guarantees are set up by order of the Minister of Agriculture and Economy after consulting with the Commission for Orientation and Development of Crop Insurance (CODAR) to benefit from this assistance. Must comply with the specifications (C. rur ., art .L. 361-8 mod .par L. art .8).

FNGRA compensation

The National Agricultural Risk Management Fund (FNGRA), with advice from CODAR, depending on crop type and contract, is due to climate hazards when these losses exceed statutory thresholds. Contributes to compensation for harvest and crop loss. These thresholds cannot be less than 30% of the operator’s average annual production.

Therefore, for businesses that are insured and benefit from indemnity subscription assistance, FNGRA will supplement what they receive under the contract. This additional compensation can be paid directly by the insurance company on behalf of the state.

For uninsured operators, FNGRA’s compensation suffers the same losses and is only part of the average compensation received by insured operators in this regard.

Compensation can be paid by the state or a network of authorized interlocutors. Compensation benchmarks and loss assessment methods are the same for insured and uninsured (created by C. rur., Art. L. 361-4-1, L. art. 4).

If loss compensation is based on one or more indicators and the insured disagrees, the agency responsible for compensation will, on the one hand, send the file to the “Indicator Committee”, which relies on the Minister of Agriculture. increase. Determine the validity of revaluing the rewards and even the index to CODAR.

In other cases where the operator disagrees with the compensation, a counter-assessment must be carried out. The decree sets the conditions of application (created by C. rur., Art. L. 361-4-2, L. art. 5).

Therefore, there are three levels of systems:

• The first level of loss is borne by the farmer. Less than 20% of the loss.

• The second level will be covered by the insurance company if the contract is signed. Within 20% of the loss up to the intervention level of FNGRA, as defined by the legislation issued for each production.

• The third level is only compensated by FNGRA based on its own intervention threshold.

Establishment of Insurance Guidance Development Committee

CODAR is created within the National Commission for Risk Management in Agriculture (CNGRA) and its composition is determined by published legislation. It represents trade union organizations, insurance companies and states that represent farmers.

Note: Unlike other provisions of the law, this will come into effect immediately. Therefore, CODAR can be operated without waiting for 1 as soon as the law is January 2023.

The role of CODAR is to ask the government every year about the general operating conditions of crop insurance (thresholds, compensation, insurance assistance, etc.), especially after hearing from insurance representatives who carry out multi-risk crop insurance. Make a recommendation (C. rur., Art. L.361-8mod. 8).

After consulting with CODAR, a three-year statute will be issued that sets thresholds, subsidy rates, and compensation rates (created by C. rur., Art. L. 361-9, L. art. 9).

Future creation of a group of insurance companies

Article 12 of the law empowers the government to do the following in accordance with the ordinance:

• Impose obligations on insurance companies that provide these guarantees to convey the data they hold to the state. Insurers may also need to anonymously share billing data with third party structures. It returns all this data to the state and all participating insurers, pools the insured’s risk, develops a common technology price without questioning commercial freedom, and jointly collaborates on risk reinsurance activities. You are responsible for doing so.Insurance products under reasonable conditions, etc.

• Oversee the procedure for claim evaluation and compensation.

• Create a group of insurance companies that are responsible for all or part of the above obligations. The insurer is obliged to participate if it offers a subsidized multi-risk harvesting contract.

• Complement the mission entrusted to the Caisse centrale deréassurance (CCR) by defining management methods and applicable sanctions, especially from a reinsurance perspective, and setting the reporting obligations of uninsured operators.

In the above areas, the government has a period of six months from the promulgation of the law to the issuance of the ordinance, that is, until September 2, 2022.

For each ordinance, the ratification law must be submitted to Parliament within three months of its promulgation.

Postponement of application overseas

This law does not apply to Guadeloupe, Martinique, Reunion, Mayotte, Saint Barthelemy and Saint Pierre Emikeron (L. art.13). In fact, operating in these territories is a relief fund for overseas territories included in the national budget. However, prior to March 4, 2024, the Ordinance empowers the government to take steps related to this relief fund and determine the conditions under which relevant businesses can access FNGRA (L. art.14).

Whole Life Insurance Dictionary, March 10, 2022