Published legislation and draft legislation - Colombia

Updating insurance companies’ obligations to the agricultural sector

Regulatory Circular P-7/ 2018 issued by FINAGRO

The Colombian government understands agricultural insurance to be a legal instrument for protecting and incentivizing food production, for looking into ways of improving the rural sector’s economic profitability and for protecting investments. For this reason, the state contributes towards the premiums that agricultural producers have to pay when they take out their agricultural insurance policies.

With this in mind, the purpose of the National Agricultural Risk Fund, managed by the Agricultural Sector Financing Fund (FINAGRO) has been extended to include the co-funding of the costs involved in strengthening the technical underpinning of agricultural insurance and to promote risk management in the sector, as well as granting subsidies, support and incentives to implement risk management instruments.

In the framework of this reinforcement, and in line with the regulations passed, FINAGRO has used this Circular to update certain areas of agricultural insurance relating to insurance companies’ obligations, among which the following are of particular interest:

  • Timeline for insurance companies to report claims: for claims received in the first semester of 2018, the reporting deadline will be August 2018; and for those received in the second semester, the cut-off date will be February 2019.
  • Update to the distribution system used for the Agricultural Insurance Incentive.
  • Inclusion of the appendix titled “Certificate of uptake of prevention and control mechanisms to combat money laundering and the financing of terrorism on the part of Financial Institutions”.

The dates on which insurance companies must pay 1% of the total value of the premiums to the National Agricultural Risks Fund have been renewed, as has the regulatory framework for the agricultural sector and the update of the “Producer category statement” appendix, that must be completed by the insurance companies.