Canada Production Insurance Regulations
Marginal note:Insured perils
4 (1) A production insurance agreement shall provide that all insurance contracts to which the agreement applies, except those covering losses specified in paragraph 15(c), shall provide insurance against more than one of the perils specified in the agreement.
Marginal note:Determination of losses
(2) The agreement shall provide that losses of a farm enterprise, with the exception of the losses referred to in section 15, shall be determined by subtracting the total production of an agricultural product, adjusted for any quality losses, from the total production guarantee for the agricultural product on all exposure units of the farm enterprise.
Marginal note:Agricultural products to be distinguishable
(3) The agreement shall provide that, for the losses in respect of an agricultural product to be determined separately under an insurance plan, the agricultural product shall meet the following criteria:
(a) the agricultural product can be distinguished from other like agricultural products;
(b) the agricultural product has a separate market price from other like agricultural products;
(c) the agricultural product has different productive capabilities or production risks from other like agricultural products; and
(d) there is sufficient volume of production and availability of data to ensure the financial viability of an insurance plan related to the agricultural product.
(4) The agreement shall provide that any insurance coverage benefit under an insurance contract that is an exception to subsections (1) to (3) is deemed to be a risk-splitting benefit.
Marginal note:Level of premium support
(5) The agreement shall provide that the risk-splitting benefit shall be subject to the level of premium support from Canada that is associated with high-cost production coverage, as set out in the agreement, and shall be supported as being feasible by documentation showing that the following conditions are met:
(a) standards and procedures for adjusting losses are in place;
(b) administrative resources agreed to as adequate by the parties to the agreement are available;
(c) administrative costs associated with the risk-splitting benefit are reported separately from the other administrative costs associated with insurance plans; and
(d) sufficient volume of production and data are available to ensure the financial viability of the risk-splitting benefits.
Marginal note:No double indemnity
(6) The agreement shall provide that if there is a risk-splitting benefit under an insurance contract, there shall be loss adjustment and payment processes to ensure that damage is paid for only once or that any indemnity payable under a risk-splitting benefit is deducted from any other indemnities payable under an insurance contract.
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