New rural insurance rules expand protection and compensation periods in Brazil

As of this Wednesday (30), the Brazilian agricultural sector has new rules that expand the protection of rural producers and strengthen risk coverage mechanisms.

Law No. 15,526 consolidates rural insurance as an instrument of agricultural policy and updates standards for contracting, regulating and paying compensation.

The text is published in this Wednesday's edition (30) of the Official Gazette of the Union.

Compensation

The new legislation determines that rural insurance contracts clearly state the documents required for the analysis of claims and provides deadlines for completing the processes.

claims adjustment without the need for an in-person inspection: up to 15 days after the producer’s notice;

payment of compensation: up to 30 days after delivery of the required documents or completion of the technical inspection.

Credit

Another new feature is the integration of rural insurance into the set of guarantees for rural credit operations.

The legislation authorizes financial institutions to require clauses that allow the assignment of policy rights as a guarantee of the operation. Compensation may also be allocated primarily to the financial agent in the event of an accident.

The federal government must also establish conditions to encourage producers to take out rural insurance.

Access

The law expands incentives for rural credit operations protected by rural insurance. Among the expected benefits are more favorable financing conditions, priority in obtaining credit and preferential access to the extension or renegotiation of rural debts.

The text also makes the Union's expenses intended for economic subsidy for rural insurance premiums mandatory, subject to the limits set out in the Federal Budget.

Furthermore, producers who wish to access the federal subsidy must provide information about their agricultural activities, in a format that will be defined by the Executive Branch.

Transparency

The new legislation also aims to increase transparency in the sector, in accordance with the following measures: