The initiator of this draft law is the Ministry of Agriculture, which notes in its report that the existing insurance mechanism in the agricultural sector, in place since 2009, has proven ineffective and does not meet modern requirements.
The Ministry provides examples from European practice, where the coverage of agricultural insurance is 100% in Cyprus, 78% in Austria, 43% in Germany, and 26% in Spain.
The proposed draft law introduces a new concept of index insurance, under which protection is provided based on a special index, whether it be a yield index, a weather index, or another defined by insurance standards.
Within this mechanism, payments are made if the value of the indicator during the term of the insurance contract deviates from what is established in the policy.
Furthermore, the draft law creates conditions for the introduction of insurance in the livestock and aquaculture sectors.
If the law is adopted, it is planned to develop subordinate legislation that will define the procedure for subsidizing, transferring insurance premiums, as well as the methodology for insuring agricultural crops. A subsidy plan will be approved annually.
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