In order to undertake insurance of various agricultural products, livestock, poultry, honeybee, silkworm and cultured aquatic animals against damages arising from natural accidents and forced events such as hail, storm, drought, earthquake, flood, frostbite, freezing, fire, lightning, general and quarantine plant pests and disease, general and quarantine contagious animal diseases as a means towards achievement of the objects and policies of the agricultural sector, the Agricultural Products Insurance Fund is established in the Agricultural Bank.

The Agricultural Products Insurance Fund is financially independent and a juridical person, administered on the basis of legal regulations concerning governmental companies with a high council consisting of the Ministers of Agriculture, Economic Affairs and Finance, Commerce, State and Head of the Plan and Budget Organization presided by the Minister of Agriculture. The scope of functions and powers of the High Council shall be provided in the articles of association of the Agricultural Products Insurance Fund.

The High Council of Agricultural Products Insurance Fund shall have a technical committee consisting of competent and fully-empowered representatives of the members of the High Council and the Fund with the following functions:

1. Examination and confirmation of all projects, plans and matters referred to the High Council by the Fund.

2.Supervision of proper execution of approved projects and plans on behalf of the High Council.

3.Examination and furnishing of consultative opinion with respect to matters and problems referred by the Fund.

The board of directors of the Fund shall consists of five persons including the managing director of the Agricultural Bank, one person from the board of directors of the Agricultural Bank, a representative of Jihad Sazandegi and two other persons nominated by the Minister of Agriculture and approved by the High Council. The managing director of the Agricultural Bank shall also be charged with the position of managing director of the Agricultural Products Insurance Fund.

The initial capital of the Agricultural Insurance Fund is the amount of one billion Rials which shall be appropriated and paid by the government upon the proposal of the Ministry of Agriculture. The capital of the Fund may be increased in accordance with the related articles of association and with the approval of the High Council of Agricultural Products Insurance Fund.

The government is obligated to prepare the aforesaid articles of association and to present same to the Islamic Consultative Assembly for approval within three months as of the date of approval of this Bill.

Government aid for provision of part of the premium share of the farmer and compensation of contingent losses of insurance activities shall each year be included in the state general budget and paid to the Fund upon proposal by the High Council of the Agricultural Products Insurance Fund and approval of the Council of Ministers.

Gradually as the Agricultural Products Insurance Fund declares the necessary readiness for execution of the functions thereof on the basis of this Bill in any region and for any product, the Fund for the Assistance of Damaged Producers of Agricultural and Livestock Products shall terminate its activities in such region and for such product and shall transfer the related resources and facilities to the Agricultural Products Insurance Fund.

The above law, consisting of a single article and seven notes, was approved by the Islamic Consultative Assembly in the session of Sunday, Khordad 1. 1362 (22.5.1983) and approved by the Guardian Council on 25.3.1362 (15.6.1983).