Brokers of Moldovan insurance companies claim that in 2023, the number and amount of insurance transactions for cherry, sour cherry, apricot, and peach orchards against spring frosts decreased by 1.5-2 times compared to last year. The main reason is the amendments with administrative restrictions that have come into effect under the legislation on subsidized agricultural risk insurance at the beginning of this year, EastFruit informs.
The essence of the changes is that policyholders’ debts on contributions to insurance companies from the beginning of 2023 may be only a very small percentage of the amount of their insurance fund and authorized capital. Exceeding these limits, reflected in the financial statements of insurance companies, can cause big problems for them in the National Commission for the Financial Market – up to the introduction of an external management regime. Meanwhile, large debts arise often, since subsidies (compensation in the amount of 70% of insurance premiums) from the National Fund for Subsidizing Agricultural Producers and Rural Areas are transferred to insurance companies with long delays.
For this reason, insurance companies have set hard limits for their brokers on the total amount of crop insurance against spring frosts in the first quarter of 2023. During this period, early stone fruit orchards are mainly insured.
Moldovan insurance market operators claim that there is a draft law abolishing the above-mentioned restrictions in the law on subsidized insurance. The document has a good chance for early adoption by the Parliament. Therefore, farmers and insurance companies are most likely to still insure pome fruit orchards against late spring frosts in 2023.
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