The President of NAAI gave a report on agricultural insurance status at the cabinet meetings of the Chairman of the Government of the Russian Federation

The possibilities of extension of agricultural insurance with state support, as well as the improvement of its terms became some of the issues landed at the Russia cabinet meetings on August 3, which was dedicated to the progress of harvesting in 2015. Korney Bizhdov, the President of NAAI, spoke about the situation in agricultural insurance at the meeting.
The teleconference under the chairmanship of the Prime Minister of the Government of the Russian Federation, Dmitry Medvedev, took place in of Sochi. The main report on harvesting was given by the Minister of Agriculture of the Russian Federation Alexander Tkachyov, speeches of governors of a number of regions were also heard. Veneamin Kondratyev, the Acting Head of the Krasnodar Territory, and the Governor of the Volgograd region, Andrey Bocharov, touched on issues of agricultural insurance amongthe other ones. In particular, Veneamin Kondratyev, the Acting Head of the Krasnodar Territory, asked for extension of the insurance coverage, having suggested to lower the threshold of crop loss, which is not accepted as insurance event, to the level of 10%, but not 25%, as it is now.
The President of NAAI, Korney Bizhdov, gave a summary report on subsidized agricultural insurance with state support which was built up by joint efforts of the Ministry of Agriculture of the Russian Federation and the insurance community. Annually this system provides insurance coverage of up to 18% of cropland, about 7 thousand agricultural enterprises become its clients, due to it growers received payments over 11 billion rubles during the first three years of effecting the law. At the end of 2014 the first adjustment of the system was made. The purpose of it was to improve terms of insurance for agriculture producers: the list of risks was expanded, the threshold of crop loss which is accepted as insurance event was cut from 30% to 25%, since 2015 the centralization and monitoring of agricultural insurers that are going to become members of a unified all-Russia association of agroinsurers has been enhanced. At the same time, the launch of now working insurance system revealed a number of practical problems, such as insufficiency of infrastructure and of agricultural technologies standards. Korney Bizhdov reported on the project which has already been undertaken by NAAI together with Roshydromet ;a research system of regional criteria of the natural hazards differentiated by types of crops which are to make the adjustment of insured event simpler and more transparent.
The President of NAAI also addressed the Prime Minister Dmitry Medvedev with a request from the insurance community to draw attention to a problem of the so-called "agricultural lawyers": the organized groups of "experts" whose aim is to receive imaginary insurance payments under agricultural insurance contracts. As a rule, it is realized with the help of shady, obviously, fraudulent scheming and deception of judicial authority. To such practices, as NAAI noted, we can refer a purposeful transfer of insurance case to the court of other territorial entity of the Russian Federation which is located more than a thousand kilometers from the region where the insured event took place, or presentation of claim several years later after the harvesting of the insured crop, or failure to notify the insurer about filing a petition in court and some others. The Prime Minister, Dmitry Medvedev, instructed NAAI to prepare and send all the information available on the matter to the Government for consideration and initiation of possible measures.
"The insurance companies are very much concerned about the phenomenon as the agricultural insurance coverage under contracts is rather high , and illegal payments can reach tens millions rubles, – the President of NAAI, Korney Bizhdov, notes. – Such legal risks have already forced some reliable insurers to quit the agricultural insurance market, and not only in the subsidized segment. This activity, which has nothing to do with the protection of growers’ interests, is just destructive for agricultural insurance."
Responding to the offer of Krasnodar Territory to extend insurance coverage by lowering the threshold of crop loss to 10%, instead of 25%, the President of NAAI, Korney Bizhdov, emphasized that the concept of the operating system is directed on coverage of catastrophic losses of growers which can cause financial collapse of the enterprise, in fact, to its bankruptcy.
"Any insurance coverage extension will require substantial rise in price of insurance and thus surge in subsidized insurance, which will be difficult to realize at the federal level, – the President of NAAI, Korney Bizhdov comments. – At the same time, if a certain territorial entity of the Russian Federation comes forward with the initiative to create its own regional program supplementing the federal system of subsidized crop insurance with a wider coverage, NAAI can endorse it".
Apart from participation in Russia cabinet meetings, the President of NAAI, Korney Bizhdov , discussed of a number of specific problems concerning agricultural insurance with the heads of some regions.