KATHMANDU, Feb 26: The Insurance Board, the insurance sector regulator, has finalized a policy on fisheries insurance that will soon make it mandatory for all non-life insurance companies to provide coverage to fishes grown in ponds of at least 200 sq m.
The measure is expected to provide cushion to fish farmers in case of damages or losses of their products and pave the way for banks and financial institutions to open the floodgates for credit into the sector.
“The copies of the policy will be circulated among non-life insurance companies in a day or two,” Binod Aryal, executive director of the Insurance Board, told Republica.
The policy - drafted in coordination with the Fisheries Development Center - bars insurance companies from collecting more than two percent of the sum assured as premium amount. But if fishes are grown adopting a highly intensive fish farming technology, a 10 percent discount will have to be given on the premium amount.
The maturity period of any fishery insurance policy should be at least three months and the policy should be bought within 15 days of releasing the fries in ponds.
Ponds for fish farming should be at least 200 sq m and 3 ft deep. But in case of trout farming, the pond should meet the requirements set by technical experts.
“In case fish farmers want to insure fish ponds, a premium amount no more than one percent of the sum assured should be charged,” the policy says.
Once the insurance policy is issued, fish farmers will be able to lay claims if their products or ponds suffer damage or total loss from fire, lightning, earthquake, floods, drought, typhoon, hailstorm, diseases, lack of oxygen, excess use of ammonia or use of poisonous substances, among others. “A compensation of 90 percent of sum assured will be given by insurers in such cases,” the policy says.
Compensation will be given to farmers based on product or production value. This means insurance coverage will be provided based on market value of fully grown fishes or cost incurred in rearing fishes till the time of their harvest. This is unlike in the case of crops, livestock and poultry insurance in which coverage is provided on cost incurred in growing products till the time of their harvest.
However, insurance companies will not be liable for damage or losses caused by carelessness or overcrowding of fishes in ponds, among others, the policy says. “Farmers will also not be able to get compensation if fishes have to be destroyed on government instruction,” the policy adds.