NACIA Washington Update - Initial Review of SRA Draft
December 4, 2009

We have had a chance to do an initial review of the SRA released this morning and wanted to pass along these thoughts. The outcome of the SRA talks could directly affect agents participating in the crop insurance proposal. RMA has decided to make crop insurance delivery costs – which include agent commission – a principle issue in the process. In its press release, RMA lists six primary objectives for the new SRA, including to, “align Administrative and Operating (A&O) subsidy to insurance companies closer to actual delivery costs.” The release then cites a recent study showing that annual FCIC payments to companies and agents doubled from $1.8 billion in 2006 to an estimated $3.8 billion in 2009, while the number of total policies dropped slightly during those years. As a result, for instance, the SRA draft appears to reduce A&O payment levels throughout and, for the first time, it incorporates “reference prices” for corn, wheat, and other key crops to prevent A&O payments from rising with commodity prices.

As you know, agents don't have a seat at the SRA table but we are asked by companies to do grassroots to influence the outcome. I think it is more important than ever for us to take a close look at the “small print” of how these negotiations are affecting agents. NACIA represents agents from all of the companies and is the only organization dedicated solely to crop insurance agents. We do not accept money from the companies for our organization. It is more important than ever that we review these proposals and weigh in with the companies we represent who are at the table.

We will keep you apprised so that you can participate as effectively as possible as the SRA negotiations move into high gear over the coming weeks and months. To view the entire press release, please click here.

If you know agents who are not members of NACIA please ask them to join ASAP.