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Murphy: Agents can't be part of crop insurance negotiations

SCOTTSDALE, Ariz. — While acknowledging that California agents have borne the brunt of adjustments in agent compensation under the standard reinsurance agreement he negotiated, Risk Management Agency Administrator Bill Murphy said today that USDA has no plans to involve anyone other than crop insurance company representatives in future formal negotiations.

William Murphy

Bill Murphy
“You are a critical part of the program, but the agreement is with the companies,” Murphy told a California agent who complained at a crop insurance industry conference here that agents in his state had not gotten a fair deal in the negotiation.

Murphy said he is happy to meet with representatives of the agents and other groups with interests in the crop insurance program, but said USDA’s legal counsel advised him that since the contract is with the companies, only company representatives should be at the table.

If he were to open the negotiations to the agents, Murphy said, “you could say the same thing about the corn growers, the reinsurers, FSA [the Farm Service Agency].”

Murphy also said RMA is working on rerating policies for wheat, cotton, rice and others for the 2013 crop year, but has no schedule so far.

Mike Day, CEO of Rural Community Insurance Services, told Murphy that last year's announcement of a rerating in the midst of the business cycle had been a challenge.

“Most of us are worried about the surprise elements of changes in the program,” Day said. “There are pretty astute business people here. We want to know what is going to happen and when.”

Murphy acknowledged that RMA needs to do a better job of informing the companies of changes, and said he is planning a series of meetings that he hopes will help with the communications issue.