In most years the Protection Fee pool collected will be sufficient to meet all claims. If a large number of claims are made in any one year that exceeds the amount of Protection Fees collected, at the discretion of the Latevo Farmers Mutual Board, claims will be paid on a proportional basis, ensuring that all members with claims in that year are treated fairly
On an annual basis this is a sound and sensible approach that provides long term security for members of Latevo Farmers Mutual. The protection fees paid to the mutual will be to the benefit of all it’s members, rather than the global insurance industry. Proportional claim payments ensure that the mutual remains self-funded and will lead to better services and better priced protection fees into the future.
In the 15% of years where there may be an extreme weather event or an increased number of claims in a catastrophic year and this impacts on the number and size of claims, Latevo Farmers Mutual will attempt to ensure that the full claim amount is paid out. This will be done by relying on any previous surpluses plus support from either state or federal governments.
If the pool of Protection Fees, and any surpluses/support, is not sufficient to pay out claims in full the Latevo Farmers Mutual Board will meet in January to ensure that all approved claims are paid proportionally. For example, 80% of each claim may be paid out.
At this stage, the 2019 Latevo Farmers Mutual Farm Income Protection program does not have the guaranteed support of either State or Federal governments and all claims will be exclusively paid out of the Protection Fee pool.
Please review the Product Disclosure Statement for more information.