Thursday, February 16, 2012

NASCOE Versus Crop Insurance II

A followup to my Feb. 10 post: NASCOE has had their legislative position on crop insurance posted for several days.  They refer to a couple of GAO reports on crop insurance.  Essentially NASCOE is pressing the servicing end, not the sales end, of crop insurance.


2 comments:

  1. Micheale Dewey2/28/2012 10:20 AM

    Here are the reasons that FSA should be selling Crop Insurance instead of Private Company’s:
    Administrative and Operating Expense Reimbursements Paid to Insurance Companies by the Crop Insurance Program in the United States: From 1995 to 2010 was $13,824,279,099
    Indemnities: $51,616,090,842
    Other Federal Expenses: $2,618,503,799
    Total of what the Government pays out to Crop Insurance Agency’s is: $68,058,873,739
    Farmers pay for their part $28,366,946,447

    Total of our Government taxes going to Insurance Agents are: $39,691,927,292, Your seeing right, it over 39 billion.

    This is not money that goes to the farmers this is the money that goes directly to the crop insurance agents.

    I guess if this is ok with you as a tax payer thats your decision, but as for me (a tax payer) I don’t find it acceptable at all. With all the savings that could be realized from this, if FSA administered the crop insurance program, they could hire people just to take care of the program and they could get licensed and take any classes to keep up that license. Most states you just have to take a test you don’t even have to have any classes, so its not rocket science for sure. Just about anyone can get an insurance license. Then take continuing education classes like 8 or so hours every other year, I think it is here in Kansas.

    This is just another case of outsourcing at its worst. This is a program that could be handled by FSA. I work for FSA, the can do agency and believe me, we could make it happen. But the Politicians are being lobbied by the insurance people with our own money no doubt. This is one of the reasons that Insurance Companies are some of the richest companies in the world.

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    Replies
    1. I'm not following the math--if you have a citation for the source of your figures I'll devote some time to it. $39 billion seems too high, $13 billion to the agents would seem closer. That roughly is FSA administrative costs over 15 years, at least the same ball park.

      I remember when FSA was selling CAT insurance (1994 maybe?) there was training required to meet some legal requirements.

      I went back and looked at the Feb. 10 post. I sound more skeptical there than I really intended. Guess I need to post again on the subject.

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