Public-Private Partnerships

1

• Public-Private Partnerships
• for Risk Management in Agriculture
• Turkish Experience
• Global Conference on Insurance and Reinsurance
  Pools for Natural Catastrophe Risk
• (8-9 December 2005 Istanbul)
• Bülent BORA
• Director General, TARSIM
• Agricultural Insurance Pool Management, Turkey

2
Public-Private Partnership in Risk Management in
Agriculture in Turkey

• After several unsuccessful attempts for the
  establishment
• of a sound agricultural insurance system in
  Turkey, long-
• expected agricultural insurance law allowing
  public-private
• partnership, offering technical and economic
  resources
• to preserve the agricultural sector from
  suffering under
• difficult conditions, finally was passed on
  14.06.2005.

3
Public-Private Partnership in Risk Management
in Agriculture in Turkey

• Aim of the Agricultural Insurance Law No. 5363
• Determination of procedures and principles
  regarding
• the implementation of agricultural insurance in
  order to
• compensate farmers for losses occurring in their
• agricultural activities due to natural risks.

4
Legal Regulations for the New Agricultural
Insurance System

• Law (5363/ 2005 June 14th) for Agricultural
  Insurance.
• Regulation (2005 Sept. 22) for Working Procedures
  and Principles of Agricultural Insurance Pool.
• Regulation (2005 Sept. 22) for Implementation of
  Agricultural Insurance.

5
Institutions which are Involved in the New
Agricultural Insurance System of Turkey
Government
Private Sector
Organizations (Insurance and Agriculture)
Union of the Turkish Chambers of Agriculture
Association of the Insurance and
Reinsurance Companies of Turkey
Ministry of Agriculture and Rural Affairs
Undersecretariat of the Treasury
Insurance Companies
Agricultural Insurance Pool
TARSIM
TSV
6
Institutions which are Involved in the new
Agricultural Insurance System of Turkey

• Agricultural Insurance Pool
• Management Committee
• Managing Company (TARSIM)

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Agricultural Insurance Pool

• Members of the Management Committee (7)
• Ministry of Agriculture and Rural Affairs (2)
• Undersecretariat of the Treasury (2)
• Association of the Insurance and Reinsurance
  Companies (1)
• Union of the Turkish Chambers of Agriculture (1)
• Managing Company of the Pool - TARSIM (1)

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Agricultural Insurance Pool

• Duties of the Management Committee
• Determination of the principles of implementation
  regarding the operation of the Pool.
• Carrying out studies for determination of crops,
  risks, and regions to be supported.
• Carrying out studies for determination of the
  ratio of subsidies on the basis of crops, risks
  and regions.
• Fixing problems faced in practice and carrying
  out studies to solve them.

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Agricultural Insurance Pool

• Duties of the Management Committee
• Determination of principles and procedures for
  loss adjustment.
• Making contracts with insurance companies writing
  agricultural business within the context of this
  law.
• Making contracts with the Managing Company
  regarding working principles and procedures.
• Determination of the commission of the insurance
  companies in return for their premium transfer.

10
Agricultural Insurance Pool

• Managing Company (TARSIM)
• TARSIM, a management entity, was established
• as a corporation by the insurance companies
  writing
• agricultural business in order to carry out all
  tasks of
• the Pool, within the context of the law.
• Insurance companies (presently 16) participate to
• TARSIM with equal shares.

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Agricultural Insurance Pool

• Duties of TARSIM
• Carrying out all kinds of works and organizations
  for loss adjustment activities.
• Carrying out the activities concerning risk
  sharing, risk transferring and implementation of
  reinsurance plan, and presenting reinsurance
  program for approval to the Management Committee
  of the Pool.
• Implementation of the decisions taken by the
  Management Committee and fulfilling the
  secretarial works of the Pool.
• Collection of the premiums and payment of
  indemnities.

12
Agricultural Insurance Pool

• Duties of TARSIM
• Informing farmers regarding agricultural
  insurance and carrying out public relations and
  publicity campaigns.
• Keeping statistics and preparing reports of the
  agricultural insurance for the Management
  Committee.
• Direction of resources of the Pool for
  investment.
• Making suggestions to the Management Committee in
  necessary cases.
• Carrying out all other works and operations
  related to the management of the Pool.

13
Institutions which are Involved in the new
Agricultural Insurance System of Turkey

• Duties of the Ministry of Agriculture and Rural
  Affairs
• Taking necessary measures to develop and expand
  agricultural insurance.
• Presenting proposals for approval to the Council
  of Ministers regarding premium subsidies on the
  basis of crops, risks, and regions.
• Monitoring regular and proper payments of
  indemnities.
• Organization of seminars, training and
  publications.
• Cooperation with the Pool and Managing Company.
• Payment of the premium subsidies of the farmers
  to the Managing Company.

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Basic Elements of the New Agricultural Insurance
System in Turkey

• Risks to be Covered
• Natural risks to be covered such as drought,
  hail,
• flood, storms, tornadoes, earthquakes, fire,
• uncontrollable pests, diseases, and accidents for
  crops,
• greenhouses, agricultural buildings, agricultural
• machinery and livestock shall be determined by
  the
• Council of the Ministers based on the proposals
  of the
• Management Committee of the Pool.

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Basic Elements of the New Agricultural Insurance
System in Turkey

• Participation
• Participation of the farmers in the Insurance
  System is voluntary.
• All insurance companies which have a licence for
  selling agricultural insurance shall participate
  to the agricultural insurance pool with equal
  shares.

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Basic Elements of the New Turkish Agricultural
Insurance System

• Marketing and Sale of Insurance
• Sales and marketing activities shall be carried
  out by the
• traditional way and means of the insurance
  sector
• Insurance Intermediaries
• Other Sales Channels of insurance companies
• Insurance contracts shall be issued with the name
  of the
• underwriting insurance company according to the
  conditions
• and standards as determined by the Pool.

17
Basic Elements of the New Agricultural Insurance
System in Turkey

• Risk sharing and Reinsurance
• All premium collected by insurance companies and
  total risk shall be transferred to the Pool.
• Pool holds the authority to retrocede the risks
  to insurance companies (subject to acceptance) .
• In cases when sufficient retrocession is not
  realized, then the government will participate
  automatically for the rest of the risks.

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Basic Elements of the New Agricultural Insurance
System in Turkey

• Risk Sharing and Reinsurance
• Necessary arrangements for reinsurance agreements
  with domestic and international companies and
  institutions shall be carried out by TARSIM.
• In case protection received from domestic and
  international reinsurance market is not
  sufficient, the excess, which shall be determined
  by the Council of Ministers, shall be guaranteed
  by the Govenment.

19
Basic Elements of the New Agricultural Insurance
System in Turkey

• Premium Subsidy
• With the aim of promoting the development of the
  agricultural insurance, premiums of the farmers
  shall be subsidized by the Government.
• The amount of premium subsidy shall be determined
  by the Council of the Ministers annually
  according to the proposal of the Ministry of
  Agriculture and Rural Affairs on the basis of
  crops, risks, regions and farm size.
• Only the registered farmers in the Farmer
  Registration System shall be eligible for premium
  subsidy.

20
Basic Elements of the New Agricultural Insurance
System in Turkey

• Supervision
• Insurance implementations of TARSIM shall be
  supervised by the Undersecretariat of the
  Treasury, all other operations shall be
  supervised by the Ministry of Agriculture and
  Rural Affairs.

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TURKISH AGRICULTURE INSURANCE ORGANISATION 2005
PRIME MINISTRY Turkish Treasury
AIF AGRICULTURAL INSURANCE FOUNDATION (VAKIF-TSV)

• INSURANCE COMPANIES
• Underwriting
• Marketting
• Sale
• Claim Payment

Reinsurance Companies

• Loss Assesment Organization
• Risk inspection Organization
• Research and Development (Data collection,
  Databank, GIS, Risk Analysis)
• Training Support
• INFRASTRUCTURE
• FOR AGROPOOL

Premium
Claim Payment
Farmers
Source TSV
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GOVERMENT SUBSIDIES
TURKISH AGRICULTURE INSURANCE ORGANISATION 2006
PRIME MINISTRY Turkish Treasury
Ministry of Agricultural and Rural Affairs
(MARA)

Premium Subsidies
AIF AGRICULTURAL INSURANCE FOUNDATION
(VAKIF-TSV)

• INSURANCE COMPANIES
• Marketing
• Sale

Reinsurance Companies

• Underwriting

TARSIM_ADMINISTRATION AND SERVICES COMPANY FOR
POOL

• Claim Payment

• Loss Assesment Organization
• Risk inspection Organization
• Research and Development (Data collection,
  Databank, GIS, Risk Analysis)

Premiums
Premium
Claim Payment
AIF AGRICULTURAL INSURANCE FOUNDATION
(VAKIF-TSV) Training for Lossadjusters risk
inspectors And Insurance sector

• Premium Collection
• Reinsurance Supply

Farmers
AGRICULTURAL INSURANCE POOL Board (Ministry of
Agricultural and Rural Affairs, Prime Ministry
Turkish Treasury, Association of the Insurance
and Reinsurance Companies of Turkey, Union of
Turkish Chambers of Agriculture, Administation
and Services Company for Pool-TARSIM)
Claim Payment
Source TSV
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Thank you for your attention.....
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• Public-Private Partnerships
• for Risk Management in Agriculture
• Turkish Experience
• Global Conference on Insurance and Reinsurance
  Pools for Natural Catastrophe Risk
• (8-9 December 2005 Istanbul)
• Bülent BORA
• Director General, TARSIM
• Agricultural Insurance Pool Management, Turkey