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Contribution to insurance premium

Pillar II. of the Hungarian RiskManagement System

Budapest, 13.09.2017.

Thank you for your attention!Aim of the support measure

Reduce economic losses caused by adverseclimatic eventsIncrease the range of plants to be insured andthe variety of risks to be insured againstIncrease the proportion of agricultural land tobe insuredMore stabilized farming

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Complex Agricultural Risk Management –National legislation

Act No CLXVIII./2011. about agricultural risk management

Government Decree No 272/2014. Call for proposal (VP3-17.1.1-16)

- Detailed rules for the implementation of the measure- Type of contracts, plants eligible for support- Evaluation of applications, deadlines- Support intensities for contract types- Data exchange

Co-operation Agreement

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EU legislation• 2012-2014:

COUNCIL REGULATION (EC) No 73/2009 Article 70.(crop, animal and plant insurance) – 75% EU Fund

• 2015:COMMISSION REGULATION No 702/2014 Article 28. – 0% EU Fund

• 2016-2020:REGULATION No 1305/2013 OF THE EUROPEAN PARLIAMENT ANDOF THE COUNCIL Article 37. – 85% or 53% EU Fund

• Granted for loss caused by an adverse climatic event, whichdestroys more than 30% of the average annual production ofthe farmer

• Financial contribution per farmer max. 65% of the insurancepremium

• Occurrence of an adverse climatic event to be recognised by thecompetent authority of the Memeber State

• The financial contribution shall be paid directly to the farmer

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Beneficiaries

Insured farmers/agricultural companies, who submitted a

single application and have „A”, „B” or „C” type of

insurance contract for those arable plants, fruits or

vegetables that have been declared in the single

application for the application year concerned.

(Act No CLXVIII./2011. 2.§ 23.)

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Type of contracts

„A” type (package): mainly arable crops, grapes, apple and pear can be insured against 9 risks (hail,

drought, agricultural flood, winter frost, spring frost, autumn frost, heavy rain, storm, and fire)

„B” type: some arable crops, but mainly vegetablesand fruits can be insured against at least one of the

following risks: hail, winter frost, autumn frost, storm and fire

„C” type: All other combinations

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Eligibility criteria

Contract in compliance with the general/specificcontractual terms (Call for proposal (VP3-17.1.1-16))

Single Application

Copy/Data of the contract sent to PA (deadline: 30th of Sept.)

Proof of payment sent to PA (deadline: 15th of Nov.) – insurance companies, contracting parties

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Application for the support

- Single Application- Simple question (yes/no)

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Data of the insurance contract

Data exchange between insurance companies and the HungarianState Treasury (PA)

Data content: personal data of the farmer, plant insured, average annual production, size of the agricultural land insured, MEPAR blocks, premium by contract type for each insured farmer

Deadlines:31st of July: insurance companies send data of the contracts1st of August: PA sends data of the insured farmers to insurancecompanies (data of plants insured declared in the singleapplication)1st of August – 30th of September: insurance companies modifythe contracts if necessary30th of Sept.: insurance companies send final data of the contracts

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Proof of payment

I. The insurance company has to submit the proof of payment in electronic way by using the portal ofPA

II. The insurance company and the contracting partyalso have to submit the proof of payment inelectronic way by using the portal of PA

Data content: registration number of the farmer, contract number, type of contract, amount paid bythe farmer

Deadline:15th of November

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Support intensity

The financial contribution granted per farmer shall not exceed 65% of the insurance premium

In case of exceeding the amount given forsupport, the following method should be used:

1. Intensity should be reduced till 40% in case of „C” type contracts

2. Intensity should be reduced till 40% in case of „B” type contracts

3. Intensity should be reduced till 55% in case of „A” type contracts

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Implementation

SingleApplication

InsuranceContract

Proof of payment

Official registration of documents in IACS

Administrative checks of the farmer & contracts

Administrative checks of the proof of payment

On the spot control at theinsurance companies

Calculation

Authorization of payment

Checks executedby software and

officers

Checks executedby software and

officers

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Statistics

2012 2013 2014 2015 2016

Number of beneficiaries

1 599 4 963 7 185 8610 10998

Amount paid 3,09 m € 8,4 m € 10,22 m € 9,6 m € 12,33 m €

Supportintensity

„A”: 65%„B”: 65%„C”: 65%

„A”: 65%„B”: 65%„C”: 65%

„A”: 65%„B”: 63%„C”: 30%

„A”: 65%„B”: 52%„C”: 30%

„A”: 65%„B”: 43%„C”: 40%

Number of insurancecompanies

4 6 9 11 11

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Statistics

2012 2013 2014 2015 2016

Number of contracts

1599 4963 7181 8610 10777

Area insured(hectare)

171 162 586 025 832 737 862 531 1 093 848

Insurancepremium(„A”+”B”+”C”)m €

5,14 13,3 18,28 19,23 25,99

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