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NCIS: Companies and government have money for payments

Reacting to the Agriculture Department’s report today that the corn and soybean crops are expected to be smaller than expected, National Crop Insurance Services said in a news release that crop insurance companies backed by the government will have money on hand to pay the indemnities that are likely to result.

Noting that most corn and soybean farmers have insurance, NCIS President Tom Zacharias said, “Farmers can be assured their claims will be paid, and that the companies will move as quickly and as efficiently as possible, given the expected volume of claims, to assess damages and get indemnity checks into the hands of farmers.”

Zacharias added that companies are required to have adequate surplus and reinsurance at their disposal to make payments when catastrophe strikes. and that they have this money on hand.

“In addition to company surplus and reinsurance, the federal government, serves as the backstop reinsurer for all companies that sell crop insurance,” Zacharias noted. “As such, the federal government shares in the gains and the losses of the program. Gains in prior years can and will be used to offset losses in years like this one.”

Noting that the industry has 5,000 adjusters and 15,000 agents, Zacharias said crop insurance companies are sending adjusters from parts of the country not affected by the drought to drought areas to handle the claims. The industry has already paid out $822 million in indemnities this year, he said.