Subsidized harvest insurance: an ordinance specifies the scheme created by the law of March 2, 2022 – Business

Faced with climate change, the time is no longer for prevention alone but for the development of “risk management tools”. This unfortunate finding is particularly true for the agricultural sector. Among these tools, the insurance contract, and more particularly the multi-risk weather crop insurance (hereafter, “harvest insurance” or “MRC insurance”) occupies a central place. Evidenced by Ordinance No. 2022-1075 of July 29, 2022, commented here, on the development of tools for managing climate risks in agriculture. The text complements the reform already carried out by Law No. 2022-298 of March 2, 2022, which was intended to encourage farmers to subscribe more massively to this type of insurance, in particular by increasing the level of public subsidy for these contracts, and which established a system distributing the burden of climate risks according to their intensity between farmers, insurers and national solidarity. The two texts will enter into force simultaneously in principle on 1er January 2023 (art. 17 of the law of March 2, 2022).

Criteria for providing subsidized crop insurance

To follow the ordinance, two series of conditions will be imposed by the new article L. 361-4-1 of the rural code.

As for insurance companies, they must first obtain an authorization within the meaning of Article L. 321-1 of the Insurance Code. The requirement is classic. They will then, and above all, have to comply with specifications that will be adopted under conditions determined by a future decree. This requirement is not new. Such a document was already adopted and revised annually by joint order of the Ministers of Agriculture and the Economy. If we refer to the version published in 2022, and which should probably largely inspire the new specifications, we will find there elements which will go beyond the insurance contract alone and which will address more professional considerations related to the documents to be provided by the insurance companies or the certification and control of these companies.

They must also, and on a mandatory basis, join the co-reinsurance group provided for in Article L. 442-1-1 of the Insurance Code, provided that it is created within the time limits set by…

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