The Chamber of Deputies approved a bill that reforms rural insurance, providing for lower interest rates and priority in rural credit operations when they are covered by this insurance, whose premium will be subsidized by a fund financed with public resources. The matter returns to the Senate due to the changes, according to a note from "Agência Câmara". Bill 2951/24 was approved with a substitute from the rapporteur, Deputy Pedro Lupion (Republicanos-PR), who made few changes, such as detailing the clauses of this insurance so that it can be given as collateral in rural loans. According to the text, the fund could be composed of shares in companies in which the Union has a minority stake (such as the former Eletrobrás), or by excess shares necessary to control mixed-economy companies (such as Petrobrás), as well as real estate and other rights of the Union. The fund, nicknamed the "Catastrophe Fund," has been foreseen since 2010 by Complementary Law 137/10, but it never took off due to a lack of continuous resource contributions and regulation. Now, the project aims to fill this gap and foresees the administration of the fund by a legal entity in which insurance companies, cooperative insurance companies, reinsurance companies, companies in the agribusiness production chain, and agricultural production cooperatives may participate as shareholders. The text allows the company to be public, including a federal bank, but does not specify how these actors will participate as shareholders. Currently, the complementary law provides for the creation of a specific company in which these interested companies could participate as shareholders.
No blocking
The approved substitute bill prohibits the contingency or blocking of expenses that constitute constitutional and legal obligations, including those related to subsidizing rural insurance premiums (such as those of the fund), in addition to those already listed as exceptions in the budget guidelines law. Subsidies for rural insurance will also have mandatory budget execution, however, restricted to the amount foreseen in the original annual budget bill sent by the Executive to Congress. The text allows, on the other hand, the reallocation of resources from the Agricultural Activity Guarantee Program (Proagro) for this purpose if this does not compromise the program's operation and already contracted operations. At the discretion of the fund's board of directors, its resources may be used to strengthen a database with information on rural insurance operations or for the zoning of agricultural risks. It will also be possible to create sub-funds with segregated assets to serve specific sectors.
Risky letters
As a form of supplementary coverage, according to regulations from the Superintendence of Private Insurance (SUSEP), the fund may transfer risks to reinsurance companies or purchase Insurance Risk Letters (LRS), including those from special purpose insurance companies regulated by Law 14.430/22. The LRS is a nominative, transferable, and freely negotiable credit instrument representing a promise of payment in cash and linked to insurance and reinsurance risks.
Rural insurance
In the law that authorized the Union to grant subsidies to rural producers to pay insurance premiums, the text included other benefits for rural credit operations covered by insurance. Thus, in addition to financing the insurance premium in the part not subsidized by the fund, the borrower may count on favorable conditions regarding interest rates, terms and limits, and priority access to rural credit, including extensions or renegotiations. The current requirement of the insurance law (10.823/03) regarding the provision of production data is also modified by the bill. Instead of providing individualized historical data of previous production cycles related to the agricultural activity to be insured, as is currently required, the bill refers to regulations of the Executive Branch for the definition of the types of information. This regulation will also define: restrictive measures for access to the rural insurance premium subsidy in case of non-compliance with the provision of data; The bill also establishes minimum risk coverage parameters and mandatory clauses for rural insurance contracts benefiting from economic subsidies. New responsibilities are created for the already established interministerial management committee for rural insurance, such as encouraging the creation and expansion of premium subsidy programs for this insurance by states and municipalities. Regarding agricultural activity insurance, the substitute bill establishes deadlines for the process of obtaining compensation after loss events. Thus, in addition to a list of mandatory documents to be provided by the insured to the insurer, the bill provides as a mandatory clause the establishment of a minimum advance notice period for the insured to inform the insurer of the effective date of harvest, cutting, or release of the area of crops covered by the insurance in cases where the settlement of the claim depends on an on-site technical inspection to assess the damages. This claim processing must occur within 15 days of the insured's notification if an on-site technical inspection is not necessary. The payment deadline will be 30 days, starting from the delivery of the documents or the on-site technical inspection, whichever occurs last.
Loan guarantee
To serve as collateral for rural sector loans, the bank may require that the insurance policy contain, cumulatively or not, clauses that: establish the fiduciary assignment, in favor of the creditor financial institution, of the rights and indemnities obtained under the policy; define the creditor financial institution as the primary beneficiary of the indemnity in case of a claim; establish maximum settlement and payment periods shorter than those stipulated by the law regulating private insurance; or clearly identify the insured object, the contracted coverage, the limits, the terms, and the other conditions for characterizing and activating the claim. In all cases, the rural insurance given as collateral in these operations must be contracted with insurance companies that meet minimum economic and financial capacity requirements defined in regulations.
Debates
According to the rapporteur, Deputy Pedro Lupion, the presence of rural insurance is still very limited. The low coverage, among other factors, is due to "the complexity of our regulatory frameworks, the insufficiency of resources allocated to subsidies, the uncertainties inherent in accessing government programs, and the operational difficulties faced by producers and insurers." Lupion is the coordinator of the Parliamentary Agricultural Front. In 2025, the Rural Insurance Premium Subsidy Program (PSR) allocated R$ 565.4 million to insurance, enough to subsidize approximately 3.2 million hectares of crops, about 2.61% of the total temporary and permanent crops in the country. Lupion's text details the conditions for using rural insurance as collateral for rural credit operations and expands the objectives of the fund intended for supplementary coverage of rural insurance. Congressman Bohn Gass (PT-RS), deputy leader of the PT-PCdoB-PV federation, stated that agriculture is a risky activity and it is fundamental that producers have insurance. "Given the need for farmers to be protected when they lose crops, not by their own choice, but due to rainfall." According to Congressman Rodolfo Nogueira (PL-MS), if rural insurance had been available for more years, farmers would not be in debt. "They would use rural insurance as a tool to recover from crop failure," he said.
This text was translated by machine from Brazilian Portuguese.