SPRINGFIELD – To ensure farmers have insurance in the event of a natural disaster or other costly incident, State Senator Dave Koehler supported a new law that will strengthen regulations for farm mutual insurance companies.

“We have to protect our farmers and the land they own that puts food on our tables,” said Koehler (D-Peoria). “Ensuring farmers have coverage in the case of a natural disaster is important, especially here in Illinois where our ag industry is vital.”

Farm mutual insurance companies offer a type of mutual insurance to farmers or rural property owners. Prior to this new law, the Illinois Department of Insurance required unlimited catastrophic aggregate reinsurance coverage. Currently, only one company will be offering contracts that meet the DOI’s requirements, and as a result, many farm mutual insurance companies will struggle to find reinsurance coverage.

Senate Bill 765 requires farm mutual insurance companies to have and maintain adequate — rather than unlimited — catastrophic reinsurance, which is defined as the amount required for a 500-year catastrophic event. The Koehler-backed law ensures broader access to reinsurance products, preventing more than 51,000 policy holders from becoming uninsured at the end of the year.

“This law allows the marketplace to correct and set appropriate coverages and pricing for farm mutual companies and its policyholders,” said Koehler. “I will always be an advocate for our farmers, and this is a much-needed step to ensure their property is protected.”

Senate Bill 765 was signed into law Friday and took effect immediately.