Reform on subsidizing cotton and wheat insurance in Uzbekistan
12 July 2019
This summer, Uzbekistan underwent several legal reforms of the agricultural insurance sector.
The first noteworthy reform is the Parliament’s Decree from 19 June 2019 on “Improving the insurance system of future yields in cotton and wheat production”. According to this decree, 4 percent of subsidized agricultural credits will be used to insure credit takers’ production of cotton and wheat via the insurance company “Agrosugurta”. Credit takers interested in the subsidized credits are required to purchase the crop insurance until 1st of February (for wheat) and until 1st of June (for cotton). Furthermore, the Ministry of Finance of Uzbekistan provides 20% subsidy to cover the indemnity payments of the insurance (the remaining 80 percent of the indemnity payments will be covered by “Agrosugurta”). The original text of the decree can be found here (in Uzbek): http://www.lex.uz/docs/4379349
Second, the President of Uzbekistan, Shavkat Mirziyoev, criticized the slow developments in insurance markets in Uzbekistan during a meeting on developing insurance service markets on 10 July. He particularly highlighted that only 11 percent of insurance premiums are currently used to cover indemnity payments. Internationally, about 50-60 percent of the premiums are spent to cover claims. In this meeting, it was decided to close the current organization “State inspection on insurance control” with the argument that there is no need for an organization to control the insurance market, but rather there is a need for an organization to modernize the sector. Therefore, instead a new organization “Agency for development of insurance market” is established to create short and long term strategies to develop the sector. The related press release can be found here (in Uzbek): https://kun.uz/news/2019/07/10/sugurta-bozorini-rivojlantirish-agentligi-tashkil-etiladi-sohaning-yaimdagi-ulushini-2-baravar-oshirish-vazifasi-qoyildi.