Registration Insurable / Non-Insurable Risks Ranking Compensation & Premium

The Fund undertakes an annual exercise of registration of cane plantations starting by mid April of any year to end on 31st May of that year. During the period mid February to end of March, only planters and metayers who have received an invitation should call at any office of the SIFB to register their holdings. As from the beginning of the month of April up to end of the month of May of any year, irrespective of an invitation received, Planters / Metayers may register their holdings at any office of the SIFB during working hours on any week day.
This exercise formalizes the insurance policy for the ensuing crop provided for in Section 40 of the Act. Registration after 31st May is effected on payment of late registration fee. The main objective of this exercise is to confirm the data (holdings) of an insured. The registered data is thereafter used by the insured to enter into a contract for the supply of his canes for milling.

On and above, this exercise permits an interaction between the Fund and its insureds. The Insureds have the opportunity to enquire about their holdings, cane weight, Insurable Sugar, compensation, etc.

Millers have to register their factories with the SIFB not later than 31st May of any year.
Risks covered under General Insurance are cyclone, drought and excessive rainfall. Insureds are compensated for losses arising out of the occurrence of one or a combination of the insured risks. Losses occurring during the intercrop season due to fire are compensable.

Staff of the Fund (inspectorate division) undertakes periodical inspections (a minimum of three annually) to take note of the state of cane cultivation. Competitive weeds, gaps between stools, bad fertilisation, diseases, pest (except yellow spot) etc are classified as adverse items. Planters are advised of the condition of their cane plantations in case of existence of any adverse item. In case of disagreement the planter can request for a reinspection of his fields. The adverse item thus recorded reduces compensation payable in case of event years.

The ranking system was introduced in 1965 under the Cyclone and Drought Fund Ordinance. Every insured has a ranking which is his classification as an insured. Each ranking value corresponds to a premium percentage, a first loss percentage and value shortfall percentage as tabulated in the Ranking Table.

Ranking correlates negatively with the premium percentage and the first loss percentage, and positively with the value shortfall percentage. In other words, an insured having a higher ranking will receive more compensation, in case of an event, and pay less premium compared to another insured with a lower ranking having the same Total Insurable Sugar and shortfall.
The ranking formula was last amended by regulation Government Notice No. 94 of 2007.


The product of the insured’s ISH and the extent in hectares on which canes have been cut down and sent to mill gives his Insurable Sugar, commonly termed Total Insurable Sugar (TIS), which may be adjusted for uninsured risks.
ISH = Sum of sugar produced at 78% for insured’s 3 best years
Sum of harvested hectares for insured’s 3 best years

The insured’s “best” years are also known as his “normal” years.

In case of an event year, and on obtention of returns (canes supplied on behalf of planters) by millers, brokers, middlemen and co-operative credit societies together with extraction rates issued by the Cane Planters and Millers Arbitration and Control Board the sugar accrued to each insured is determined. The sugar accrued is then compared to the total insurable sugar (TIS) to assess any compensable loss payable around the end of February.
Based on compensable loss varying from 55% to 80% (depending on the ranking of the insured) and the value of sugar of the insured, compensation is payable after the deduction of the first loss and sugar accruing.
Premium is claimable at the end of the harvest, i.e, on or before the 31st of December of any year after the period of Insurance Cover.
Based on the ranking of the insured, premium payable is equivalent to a percentage (varying between 2.75% and 4.4%) of the value of the total insurable sugar of that insured.
The determination of sugar price for insurance purposes by December of any year enables the Fund to pay any compensable loss to insured during the following year as early as possible (usually by the end February/early March). Thus the final sugar price which is determined by the end of May of the following year may slightly differ with the sugar price for insurance.