The agency which administers the federal crop insurance programis challenging a Government Accountability Office report which saysit made improper payments to people who had died.

The Risk Management Agency says that since May it has been usingthe Social Security Death Master File to ensure all of its paymentsare appropriate.

"RMA recently received approval from SSA to obtain the completedeath master file which provides all federal and state reporteddeaths since 1936, and is prepared to integrate the complete fileinto the RMA computer matching system," said John Shea, RMAspokesman.

The GAO report, sent to various agencies and members of Congressand released earlier this week, generated huge interest whenpublished.

The report said RMA paid $22 million to more than 3,400 cropinsurance policyholders who had been dead for at least two yearsfrom 2008 to 2012.

The GAO said some of those payments might have been made whilethe farmer was still alive, but there was no way to know forsure.

However, an official of RMA, a unit of the U.S. Department ofAgriculture, said that while writing the report, GAO provided anumber of samples to RMA to assess whether the premium subsidiesand A&O allowances provided on behalf of deceased policyholderswere proper.

"In every case, RMA determined the subsidies and allowances wereproper," Shea said. 

The issue is important to the insurance industry. There are 17crop insurers, and an estimated 18,000 insurance agents selling theproduct.

Shea defends RMA policies in dealing with alleged payments todead policyholders.

"In most circumstances the crop insurance cycle provides atleast one, and possibly several opportunities each year to verifythe insured person or their legal representative is alive andeligible to participate in the program," he said

He said policyholders pay the premium annually, are required toprovide a signed certification each year when they file the annualproduction and yield report., and are  also required toprovide a written signature if there is a claim for loss.

 Shea said that in response to the GAO'srecommendations, RMA moved aggressively to implement formal,systematic procedures to identify and prevent improper subsidies onbehalf of deceased individuals.

"RMA has taken all the steps necessary to comply with the auditfindings, and has moved aggressively to implement new controls,providing additional assurance that program benefits are notimproperly made on behalf of deceased producers," Shea said.

GAO has issued a number of reports critical of the program, andthe RMA has been under intense scrutiny since last year whengovernment investigators found a huge fraud ring in North Carolinathat for decades siphoned over $100 million from the program. Thefraud ring involved insurance agents, adjusters, farmers and dozensof others.

A report released this month by the Insurance InformationInstitute said crop insurance has become the largest single sourceof financial protection to farmers.

The program has grown from insuring 182.2 million acres in 1997to more than 280 million acres in 2012.

The I.I.I. report said data from the Federal Crop InsuranceCorp. show claims payments (indemnities) for the crop year 2012totaled more than $14.7 billion, the result of the severe droughtthat has resulted in significantly lower crop yields. Industryobservers expect payouts to go higher as insurers finalize theremaining claims.

The government pays 60 percent of claims.

Total premiums for catastrophic and regular crop insuranceprograms combined amounted to more than $11 billion, and thegovernment's coverage subsidy came to $6.9 billion, the I.I.I.said.

Claims for crop year 2011, when losses were pushed up by droughtin the Southern Plains and flooding in the Midwest, were $10.9billion.