Saxby Chambliss: “An independent study was recently shared with my staff about the profitability of the Federal crop insurance community.…”

“An independent study was recently shared with my staff about the profitability of the Federal crop insurance community. National Crop Insurance Services, NCIS, is an international not-for-profit organization representing the interests of more than 60 crop insurance companies. Representatives of NCIS recently shared the results of an independent study of the Federal crop insurance program compared to the Property & Casualty, P&C, insurance industry for the period of 1992-2006. Key findings include: The Federal crop insurance program is not as profitable as the P&C industry and writing Federal crop insurance entails greater risk; under the current standard reinsurance agreement, SRA, which is the contractual agreement between USDA and approved insurance providers for delivering the program, A&O reimbursements continue to be below actual Federal crop insurance expenses incurred by private insurers. Although the latter finding indicates crop insurance companies' costs are not fully covered by the Federal Government, the committee-approved bill contains an A&O reduction of 2 percentage points below the rates currently in effect for policies except in a State in a year in which the loss ratio is above 1.2.”