Policy-oriented agricultural insurance is an important policy to benefit farmers by providing premium subsidies by the government to resolve agricultural production risks. However, the reporter took stock of the administrative punishment decisions made by local insurance regulatory bureaus in 2016, and found that individual insurance companies played a "tricky" role in agricultural insurance business, which led to the phenomenon of "benefiting farmers" in some areas.
Many farmers strongly appeal that the effect of the national policy of benefiting farmers should not be greatly reduced because of the illegal operation of individual insurance companies. Only by strictly investigating the "catty" in agricultural insurance and severely punishing illegal insurance companies and related responsible persons can the policy of benefiting farmers be guaranteed.
Several branches of PICC P&C Insurance in China were fined.
In 2016, several branches of China People’s Property Insurance Co., Ltd. were successively punished by the local insurance regulatory bureau for illegal activities in agricultural insurance business, which exposed all kinds of chaos in the current agricultural insurance field.
First, farmers were not paid according to actual losses. Typhoon Seagull landed in western Guangdong in September 2014, causing damage to some local rice and triggering insurance claims. In May, 2016, Guangdong Insurance Regulatory Bureau made an administrative penalty decision on Maoming Branch of China People’s Property Insurance Co., Ltd., because in this insurance claim, some rice insurance businesses of the company did not perform their compensation responsibilities strictly according to the actual damaged area of farmers, and there was an average compensation behavior.
Zhu Weizhong, director of the Property Insurance Supervision Department of Guangdong Insurance Regulatory Bureau, said: "In this case, the insurance company randomly selected 3-5 villages in each town, and 3-5 farmers in each village. According to the random inspection of farmers’ risk area and loss degree, the risk area and loss degree of farmers in the whole village were calculated, and the compensation was made accordingly. The village was not surveyed and the loss was determined according to the regulations."
The relevant person in charge of the Rural Insurance Division of China People’s Property Insurance Company Guangdong Branch said that the regulatory authorities punished the company mainly because the company did not strictly investigate the village and determine the damage to the households in this case, but only determined the damaged area and loss rate of the whole village according to the disaster situation of some farmers, and paid all the farmers who reported the case according to the loss rate.
The second is to compile false claims information. In September 2016, Henan Insurance Regulatory Bureau made an administrative penalty decision on Zhumadian Branch of China People’s Property Insurance Co., Ltd., and found that Zhumadian Branch of China People’s Property Insurance Co., Ltd. had an illegal act of compiling false claims data. The illegal facts are as follows: In the 12 peanut insurance claims and 32 wheat insurance claims of Zhengyang County Branch of Zhumadian Branch of China People’s Property Insurance Co., Ltd. in 2015, there was a problem that the same camera took photos in two different towns at the same time.
The administrative penalty decision issued by Jiangxi Insurance Regulatory Bureau in July 2016 showed that the Insurance Regulatory Bureau imposed administrative penalties on the related companies and their responsible persons in view of the irregularities of Wanzai Branch of China People’s Property Insurance Co., Ltd. and Yuanzhou Branch of China People’s Property Insurance Co., Ltd. in 2014, such as compiling false claims data in the course of agricultural insurance business.
The third is to expand the compensation fee to offset the premium. Hunan Insurance Regulatory Bureau made an administrative penalty decision on Lianyuan Branch of China People’s Property Insurance Co., Ltd. in May 2016. After investigation, it was found that the total amount of compensation for the six compensation cases of the company in 2014 with the number of CHSJ201443250300000205 was 66,492.9 yuan, of which 18,832.64 yuan was used to return the premiums that the village cadres should pay.
Where did the repeated illegal operations come from?
During the Twelfth Five-Year Plan period, China’s insurance service agriculture modernization achieved remarkable results, providing 6.5 trillion yuan of risk protection for 1.04 billion households and paying 91.4 billion yuan of compensation to 120 million households. In 2015, the main crops insured in China exceeded 1.45 billion mu, accounting for 59% of the national sown area. The average coverage rate of the three staple crops exceeded 70%, and 189 types of crops were insured.
Undoubtedly, agricultural insurance has made great achievements in leveraging social funds to effectively resolve agricultural management risks and support agricultural production. However, it should not be ignored that some insurance companies have repeatedly violated regulations, which has caused the phenomenon of "pit farmers" in some areas.
Maoming Branch of China People’s Property Insurance Co., Ltd. was administratively punished in May 2016, involving 121,700 mu of rice insured area and 21,300 mu of claims. For this compensation case, an expert’s appraisal opinion on the loss rate of disaster provided by Guangdong Branch of China People’s Property Insurance Co., Ltd. shows that the loss rate of yield per mu is 15%-23%.
The relevant person in charge of the Rural Insurance Division of China People’s Property Insurance Company Guangdong Branch said that in this case, the specific compensation standard for each mu actually paid to all farmers was: 400 yuan/mu ×100% (calculation standard of compensation per mu during the growth period) ×20% (average loss rate per mu) =80 yuan.
This means that in this case, the amount of compensation due to farmers whose actual loss rate per mu exceeds 20% is lower than the amount actually paid by the insurance company. By the same token, if the insurance company fabricates false materials and the loss degree is not determined accurately during the survey and damage determination, it will easily cause the amount that the insurance company should pay to be inconsistent with the actual compensation amount.
The relevant person in charge of the Rural Insurance Division of China People’s Property Insurance Company Guangdong Branch said that in this punished case, the company lacked the manpower for claim settlement, survey tools and on-site handling experience, so it could not effectively survey and determine the damage to households under the limitation of claim settlement.
Zhu Weizhong pointed out that in the catastrophe claims, the insurance company did not invest enough manpower and material resources to ensure that the claims process met the regulatory norms, which was the subjective reason for the illegal behavior.
The insurance company’s expansion of the compensation fee to offset the premium is related to the fact that the insurance amount of agricultural insurance does not cover the materialized cost and the farmers’ enthusiasm for participating in insurance is not high. The person in charge of an insurance company in Guangdong said that at present, the actual cultivation cost per mu of rice is about 1000 yuan, but the insurance amount of policy rice insurance is only 400 yuan/mu. In the event of a major disaster, calculating compensation according to the insured amount can not make up for the actual losses of farmers, resulting in low enthusiasm of farmers to pay premiums.
A village cadre who works as a part-time insurance coordinator in Guangdong said: "Some farmers, I can’t find anyone after riding a motorcycle for several times, and the money burned is more than the premium to be collected. Sometimes I would rather pay the premium for farmers." When the premium paid by town and village cadres is difficult to recover from farmers and cannot be reimbursed by insurance companies through normal channels, insurance companies and local town and village cadres often conspire to obtain compensation by falsely reporting or expanding insurance accidents, and then distribute the compensation again, some of which are sent to farmers and some of which are sent to town and village cadres to offset the premium paid before.
The weak management of the grass-roots team of agricultural insurance also leads to frequent violations of agricultural insurance. The reporter learned from the investigation at the grassroots level that the landing of agricultural insurance at the grassroots level mainly depends on township and village cadres. Most of these personnel lack professional knowledge and training in related insurance business, and there is a contradiction between the actual business level and the actual demand.
Agricultural insurance calls for innovation drive.
The reporter learned in some rural areas that in some places, young and middle-aged laborers go out to work, and most of the people left behind in rural families are old people, women and children. Most of the income from breeding is not the main source of income for families. Insured farmers pay little attention to agricultural insurance underwriting claims, and farmers’ awareness of rights protection is relatively insufficient.
Yi Jiaming, a big rice grower, pointed out that we should further increase the propaganda of agricultural insurance policy, continue to increase the amount of insurance, cover the materialized cost of agricultural production, improve the enthusiasm of farmers to participate in insurance, and increase the attention and supervision of claims. Insurance companies should also widely publicize agricultural insurance policies and agricultural insurance underwriting and claims information through radio, television, internet, SMS and other means to protect farmers’ right to know.
Zhu Weizhong suggested that the insurance regulatory authorities continue to focus on agricultural insurance compliance management, forcing insurance companies to increase resource input, improve business processes and standardize practical operations. At the same time, for the Pratt & Whitney insurance with a large number of insured households and a small average household area, as well as the claims for severe disasters such as super typhoon, the operating standards should be further refined according to the actual situation, so that insurance companies can make claims quickly, meet the needs of local governments and farmers, and meet the regulatory norms of agricultural insurance.
Insurance companies undertaking agricultural insurance business should speed up product innovation. At present, the underwriting of agricultural insurance is prone to moral hazard and adverse selection, and most of the losses are determined by manual survey, which is costly, difficult and inefficient, easily causing disputes and even damaging the legitimate rights and interests of farmers.
The relevant person in charge of the Rural Insurance Division of China People’s Property Insurance Company Guangdong Branch suggested that policy agricultural insurance should be gradually changed from traditional agricultural insurance to agrometeorological index insurance. "Agricultural meteorological index insurance only needs to pay compensation according to various meteorological data provided by local authoritative meteorological agencies, and there is no need to conduct house-to-house survey to determine losses, which will greatly reduce the management cost and operation difficulty of policy-based agricultural insurance and improve the efficiency of claim settlement." He said. (Odianqiu)
