Crop Insurance
WASHINGTON UPDATE by Cheryl Koch
I ndependent insurance agents continue to be an important and driving force behind protecting the federal crop insurance program , according to Christy Seyfert , Assistant Vice President and Director of Crop Insurance at Zurich RCIS , who spoke recently at KAIA ’ s Rural and Small Agents Conference in Hutchinson .
Seyfert spends most of her days on Capitol Hill , voicing the concerns of agents and private carriers when it comes to changes proposed to the Federal Crop Insurance Act . The Act , which is permanently authorized , can be amended during the annual federal budget process , the appropriations process , by the Farm Bill or any other legislation that seeks to find funding offsets for other programs .
As Congress and the President seek to find common ground and prevent another government shutdown , cuts in crop insurance look to be on the agenda , as they have been in all but one of the last ten years of budgets submitted by the President to Congress . Here are some of the changes proposed in the current budget cycle :
• Limit premium subsidies to $ 40,000 per individual or entity
• Eliminate subsidies in the Harvest Price Option program
• Provide a means test for producers with adjusted gross income of more than $ 500,000 .
Previous attempts to make significant changes to crop insurance and weaken the program make it more difficult for farmers to bounce back following weather-related or other disasters . Such changes can also negatively impact the overall safety net depended on by so many . Budget changes of this kind have been met with great opposition by rural constituents and lawmakers who represent them . the final bill . Seyfert indicated that the insurance industry remains committed to the public-private partnership that includes private sector distribution , but challenges lay ahead .
Of particular concern is legislation introduced last year in both the House and Senate , referred to as the AFFIRM Act ( Assisting Family Farms through Insurance Reform Measures ). Senate Bill 1025 , sponsored by Senator Jeff Flake ( R-AZ ), and House Bill 2332 , sponsored by Representative Ron Kind ( D-WI ), both seek to reform the Federal Crop Insurance Act and reduce federal spending on crop insurance . These proposed changes include more stringent means of testing than those included in the current budget proposal , caps on administrative and operating expense reimbursement , and a cap on rate of return . Additional related legislation has also been introduced along with reports by both the Congressional Budget Office ( CBO ) and General Accounting Office ( GAO ) that could have a significant impact on underwriting gains , premium subsidies , and , ultimately , agent compensation .
Seyfert believes that agents and brokers can assist in the effort to positively position the crop insurance program with legislators and regulators by contacting them and letting them know that crop insurance is an important risk management tool that protects America ’ s agricultural community against weather and price volatility . Crop insurance also provides jobs and financial stability in rural areas and ensures a source of affordable and safe food for the nation .
You can get more information by visiting Zurich ’ s website at www . ZurichAdvocacy . com / crop-insurance . Once you reach the page , you ’ ll find a link to help contact your legislators !
In addition to involvement in the current budget process , further changes to crop insurance could result during the process of passing the new Farm Bill . The current bill will expire on September 30 , 2018 , and discussions and hearings are already underway in both the House and Senate . Seyfert expects consideration of the bill to reach the full House and Senate by the end of the first quarter of 2018 , to be followed by amendments , negotiation and the development of
The auhor of this article , Cheryl Koch , has served in nearly every capacity an independent agency has to offer , having been an Account Manager , Producer and Agency Owner . Cheryl is the President and CEO of Agency Management Resource Group located in Roseville , California , and now devotes her time to agency management consulting and training and speaking at industry functions throughout the country .
14 KANSAS INSURANCE AGENT & BROKER | January - February 2018 |