Agricultural insurance premium return chaos to be treated

In order to attract farmers to take out insurance, some insurance companies have used the trick of "premium return" and promised to return twice or even twice the premium to insured farmers. If there is a disaster, the "return" can be "cashed" in the way of disaster compensation or even accommodation compensation; if there is no disaster, we can only fabricate false compensation cases to return to the insured farmers. The "return of premiums" is the return of self-paid premiums, which seems to give benefits to farmers, but in fact, insurance companies are still profitable. Because the insurance premium subsidies given to farmers by finance at all levels have fallen into the hands of insurance companies.

It is an unavoidable fact that the insurance premium of scattered farmers is difficult to collect. However, the difficulty in collecting premiums is only a superficial phenomenon, and the spread of the problem of "premium refund" is not entirely due to the inevitable consequences of "difficult premiums". The main reasons are:

First, the decision-making goal of small farmers' management of agricultural production is not consistent with the decision-making goal of national agricultural development. For most small farmers, especially in the eastern region, their family income mainly comes from non-agricultural industries, and the harvest of agriculture has little impact on their family income. As a result, they are not interested in agricultural management, and some even give up farming. From the perspective of their own economic interests, agricultural insurance is dispensable to them, so they naturally pay less attention to agricultural risk management. The country needs to bring about the sustainable development of agriculture through agricultural modernization. as an indispensable means of risk management, agricultural insurance can provide risk protection for the national agricultural development strategy.

Second, the decision-making objectives of some insurance companies in operating agricultural insurance are not consistent with the government's principle and desire to adopt "market operation" in the development of agricultural insurance. The government is willing to reduce the burden of farmers' premiums by means of financial subsidies, increase the effective demand for agricultural insurance, and support the development of agricultural insurance, while insurance companies mainly aim at the scale of premiums and profit targets, in order to find this bucket of gold, even at the expense of illegal operation.

Third, for scattered farmers who lack the desire to take out insurance, persuading them to pay part of the premium requires a lot of work and costs more. The purpose of financial subsidy to some agricultural insurance premiums is to encourage farmers to take out insurance, but if this policy produces the wrong incentive direction and violates the original intention of formulating this policy, it needs to re-examine and evaluate the effect of the policy.

As a matter of fact, the chaos of "premium refund" is not incurable. According to the author's survey, we can at least start from the following aspects:

First of all, insurance companies operating agricultural insurance need to have a correct guiding ideology. Although the government-supported project will not let the insurance companies involved in the operation bear excessive operational risks and will not easily let the insurance companies go bankrupt, it is impossible to give them huge profit margins.

The government finance can adjust the structure of agricultural subsidies, appropriately increase the subsidies of the central and provincial governments to agricultural insurance premiums, and within the scope of agricultural subsidies, the portion of agricultural insurance premiums that should be borne by farmers are allowed to be withheld from other agricultural subsidies (such as the "three subsidies"), so as to simplify the payment procedures.

Secondly, through innovation to solve the problem of low enthusiasm of small farmers to take out insurance. As far as the author is concerned, some companies have provided farmers with products and services with higher "added value" by means of innovative products or innovative insurance services, thus arousing farmers' enthusiasm for insurance. Other channels can be developed to help farmers pay insurance premiums, for example, some agricultural leading enterprises or agriculture-related enterprises are willing to pay insurance premiums for farmers, but they can try to obtain farmers' consent to achieve zero-payment insurance. Of course, in this case, if there is a disaster loss, the indemnity can only be claimed and enjoyed by the insured farmers, that is to say, the indemnity has nothing to do with the enterprise that pays the premium.

In areas where conditions permit, we can learn from the useful experience of the United States and develop insurance types similar to American "CAT" (agricultural catastrophe risk insurance). For farmers who are very small and lack enthusiasm for insurance, agricultural insurance products with lower protection are provided, and most or all of the premiums are borne by the government, and farmers only pay a small part or do not pay insurance premiums.

Finally, companies operating agricultural insurance should strengthen self-discipline, and regulatory departments should also increase efforts to investigate responsibility, and strictly control and punish the chaos of "premium return" in agricultural insurance. As long as insurance institutions that engage in "premium return" or obtain financial subsidies through fake insurance contracts are found, they should not only severely punish the provincial, prefectural and county-level responsible persons and perpetrators of the company concerned in accordance with laws and regulations, but even investigate the responsibility of the head company. for companies that have repeatedly committed serious violations, they might as well consider suspending the business of the county or even the province, and will not be allowed to enter the agricultural insurance market there for a number of years.

(the writer is a professor in the Department of Insurance and Director of the Rural Insurance Research Institute of the Capital University of Economics and Business)