Bill No. 2,951/2024 strengthens the legal framework for rural insurance

16/09/2026

In brief

Bill No. 2,951/2024, authored by Senator Tereza Cristina (PP-MS), was approved by the Plenary of the Federal Senate on September 3, 2026 and forwarded for presidential sanction on September 9, 2026, thereby concluding its passage through the National Congress. The period for sanction or veto runs from September 9 to 29, 2026.

The text amends Law No. 8,171/1991 (Agricultural Policy), Law No. 10,823/2003 (subsidy for the rural insurance premium), and Supplementary Law No. 137/2010 (supplementary coverage fund), with the aim of improving the legal framework for rural insurance against a backdrop of a sharp decline in coverage — from 16.3% of the planted area in 2021 to a projection of approximately 2.3% in 2025.

Among the main highlights of the proposal, the following stand out:

Designation of the economic subsidy for the rural insurance premium (PSR) as a mandatory expenditure, limited to the amount provided for in the Annual Budget Law (LOA) and allocated to the Ministry of Agriculture and Livestock.
Prohibition on budgetary contingency and freezing of the funds earmarked for the rural insurance premium subsidy.
Integration of rural insurance into the collateral for rural credit operations, with favorable conditions (interest rates, terms, and limits) and priority of access, including in extensions and renegotiations, by means of clauses providing for the fiduciary assignment of rights and indemnities and the designation of the financial institution as the first beneficiary in the event of a claim.
Establishment of deadlines for the adjustment and settlement of claims: up to 15 days for adjustment (where an on-site technical inspection or harvest is waived) and up to 30 days for settlement, counted from the delivery of the documents or the inspection, whichever occurs last.
Regulation and restructuring of the “Fundo Catástrofe” (Catastrophe Fund) (Supplementary Law No. 137/2010), intended for the supplementary coverage of rural insurance risks, provided for since 2010 but never effectively implemented.
Requirement to provide data on agricultural and livestock activity by the producer as a condition for access to the economic subsidy.

Although the legislative process has been concluded, several provisions will depend on specific regulation by the Executive Branch and on the definition of the Fund’s bylaws for full implementation.

Further details

The main changes introduced by the bill to the legal instruments are as follows:

Agricultural Policy (Law No. 8,171/1991)

Redefinition of rural insurance as an instrument of agricultural policy and insurance policy, covering losses arising from claims affecting property and livestock, as well as from natural phenomena, pests, and diseases affecting agricultural activity.
Standardization of mandatory contractual clauses, including the objective list of documents required from the insured and the maximum deadlines for adjustment (15 days) and settlement (30 days) of claims, in contrast to Law No. 15,040/2024 (new legal framework for insurance contracts), which sets a maximum period of 30 days for adjustment plus a further 30 days for settlement.
Use of insurance as rural credit collateral: the policy purchased by the producer becomes part of the collateral package for the operations, allowing for irrevocable fiduciary assignment, the designation of the financial institution as the first beneficiary, and the requirement of minimum economic and financial capacity thresholds for the insurer, to be defined by regulation.

Premium Subsidy (Law No. 10,823/2003)

Mandatory nature of the economic subsidy, limited to the amount in the LOA and linked to the Ministry of Agriculture and Livestock.
Benefits and incentives for insurance-backed credit operations, including favorable conditions for interest, terms, and limits, priority of access, and financing of the premium itself, with mandatory granting in cases of extension or renegotiation as regulated by the Executive.
Governance and transparency: mandatory provision of data by the producer, creation of public databases on rural insurance operations, and provision of a manual codifying the PSR rules.

Supplementary Coverage Fund – “Fundo Catástrofe” (Catastrophe Fund) (Supplementary Law No. 137/2010)

Expansion of the roster of quotaholders: in addition to the Federal Government, insurers, insurance cooperatives, reinsurers, companies in the agribusiness production chain, and agricultural and livestock production cooperatives may optionally participate.
Mandatory participation of insurers for access to the Rural Insurance Premium Subsidy Program – PSR: although participation in the Fund is, as a rule, optional in the capacity of quotaholder, the substitute bill establishes that the participation of the insurance company in the Fund, once it is in operation, will be mandatory for the purposes of access to the Rural Insurance Premium Subsidy Program.
Payment of quotas by the Federal Government by means of currency, government bonds, shares in companies in which it holds a minority interest, real estate, and other assets or rights.
Capital markets and reinsurance instruments: the Fund may acquire Insurance Risk Notes (Letra de Risco de Seguro – LRS), transfer risks via reinsurance, or make an assignment to a Special Purpose Insurance Company (Sociedade Seguradora de Propósito Específico – SSPE), pursuant to Law No. 14,430/2022.
Governance: a Board of Directors with equal representation of the private sector, a requirement of actuarial balance, and a prohibition on the payment of returns to quotaholders.

Points of attention for the sector

With the imminent entry into force of the new law, agribusiness players should note, from a practical and strategic standpoint, the following:

Structuring of collateral and financing: the integration of insurance into credit operations opens up scope for reviewing collateral structures, fiduciary assignments, and financing conditions — a sensitive point in structured operations, CPRs, CRAs, and barter arrangements.
Budgetary predictability, with caveats: although the mandatory nature of the subsidy and the prohibition on budgetary contingency increase certainty, the amount remains limited to the LOA and conditioned on fiscal offset measures — the debate over the adequacy of the funds persists.
Dependence on regulation: the effectiveness of several provisions will still depend on infra-legal regulation and on the definition of the Fund’s bylaws, including, among other points, the operating and coverage rules of the “Fundo Catástrofe”, the minimum economic and financial capacity requirements for insurers, the minimum coverage parameters and mandatory clauses of subsidized insurance, the data to be provided by rural producers, and the operational conditions for access to the PSR — points that warrant close monitoring of the regulatory agenda and advance preparation by insurers, financial institutions, and other agribusiness agents.
Data management and compliance: the mandatory provision of data as a condition for access to the subsidy requires the adaptation of internal processes for data collection, governance, and protection.
Contractual review: the new adjustment and settlement deadlines and the mandatory clauses require the review of policies and model contracts in light of this substitute bill and Law No. 15,040/2024.
Timing window: the urgency of the approval stemmed from the start of the summer crop planting, which reinforces the importance of swift contracting decisions in order to take advantage of the new conditions as early as the current cycle.

Companies operating in the rural insurance, agricultural credit, reinsurance, capital markets, or agribusiness supply chain sectors should closely monitor the presidential sanction and the infra-legal regulation, as well as assess in advance the impacts on their products, contracts, underwriting policies, collateral structures, and data governance routines.

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