Agricultural Insurance from the State

Friday, July 2, 2021
Agricultural Insurance from the State

On July 1, Ukraine adopted a law on amendments to the Tax Code and state insurance of agricultural market participants

Bill 5105 On Amendments to the Tax Code of Ukraine regarding the improvement of legal regulation of insurance of agricultural products with state support regulates the relationship between insurance of agricultural products and state support. "The insured are legal entities, individuals — entrepreneurs and capable individuals who have entered into insurance contracts with insurers or are insured in accordance with the legislation of Ukraine."

"It is imperative that agricultural producers use effective risk management tools, especially weather risks that can lead to a sharp drop in agricultural production," comment the authors of the project.

Changes in the Tax Code increase the tax on income under agricultural insurance contracts by 0.5% to 3.5% for the subsequent redirection of money to support the insurance of agricultural products. Partial reimbursement of insurance payments in favor of farmers has been increased to 60%.

The law amended the law of Ukraine On Insurance. Previously, agricultural products were insured through the Agrarian insurance pool, but such a program turned out to be ineffective. From now on, the powers of the body supervising insurance activities will be performed by the National Bank of Ukraine.

Amendments to the laws On farming, On collective agricultural enterprise and On agricultural cooperation clarify the procedure for obtaining state support in insurance of agricultural products.

Separately, the sequence of obtaining state support for agricultural insurance is prescribed, participants in the agricultural market are determined, their responsibilities, products, risks, and insured events are described.

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