Insurance agents will continue to be allowed to participate in talks between farmers and loss adjusters dealing with crop insurance claims under new language in the standard reinsurance agreement (SRA) approved by federal officials.
The new language agreed to by the U.S. Department of Agriculture's Risk Management Agency loosens conflicts of interest language in loss adjusting policies for the federal government's crop insurance program, according to officials of the Independent Insurance Agents of America.
Officials of the Big "I" said the new policy loosens a so-called "gag order" proposed for addition to the SRA language in order to reduce fraud and abuse in the crop insurance program.
At the same time, a Big "I" spokesperson said the trade group would try to work with the agency to continue funding for its data-mining initiative, scheduled to run out of funding next year.
The spokesman said this program needs to be reauthorized, perhaps by asking Congress to divert the funds needed to do so from the Premium Reduction Plan, which funds efforts to find methods for cutting crop insurance premiums.
Under the proposed language for the SRA, agents would have been prevented from answering claim questions from farmers while loss adjusters assessed damages.
During a meeting in Kansas City with RMA officials regarding fraud, waste and abuse in the crop insurance program, the Big "I" obtained data showing that fewer than 5 percent of more than 1.2 million crop insurance policies are considered fraudulent.
"The trade group used this positive development to underscore that farmers with claims need to be able to talk to their agents, because many of them do not know their claims adjustors and need timely and reliable sources of information when their livelihoods are at stake," said Robert Fulwider, Big "I" Executive Committee member and president of Wuestenberg Agency Inc. in West Liberty, Iowa.
"It is completely unrealistic to expect agents to remain silent when farmers call them seeking important information about their claims," Mr. Fulwider said. "Many farmers have established longstanding relationships with their insurance agents and rely on those agents in times of need, and failure to get needed information can have serious consequences for these consumers."
Regarding data mining, Patrick O'Brien, Big "I" director of federal government affairs, said that program should be reauthorized because it shows that "agents are providing the best possible service to the farming community and are a tremendous asset to the Federal Crop Insurance Program."
Mr. O'Brien explained that "the data clearly shows that this program is helping save taxpayer dollars, while the Premium Reduction Program is bad policy for American farmers. The funding would be better used for the data-mining program."
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