The USDA's Risk Management Agency will allow farmers who purchased a supplemental hail policy from Crop Pro Insurance to switch their federally subsidized multi-peril crop insurance back to their previous provider after the firm abruptly cancelled hundreds of policies, the agency said in a May 25 Bulletin.
Auburn Insurance President Ruth Gerdes said it was the first time she had ever seen RMA issue such a bulletin in her crop insurance industry career, which started in 1984. Her firm now serves farmers in Nebraska and seven other states.
“RMA did a professional job in managing this. It’s really good to see them putting the farmer first,” Gerdes added.
The decision came after Crop Pro, based in Johnston, Iowa, notified many producers in Nebraska, Colorado and other midwestern states in May that they were unable to obtain reinsurance for some of their Crop Hail Named Peril (CHNP) policies sold for 2018. Crop Pro, a general managing agency for Guide One Insurance Company, did not respond to a request for comment.
RMA noted that the CHNP cancellation caused a “disruption in the market place” and many producers and agents complained about how the cancellation impacted producers’ coverage, the agency wrote in a May 25 bulletin. CHNP policies are not subsidized or reinsured by the Federal Crop Insurance Corporation.
The agency pointed out that producers may have moved their Federally-reinsured Multi-Peril Crop Insurance (MPCI) policy to Crop Pro and Guide One Insurance Company “in an effort to obtain the CHNP policy or changed their MPCI coverage in anticipation of receiving the CHNP coverage.”
But after receiving Crop Pro’s cancellation notice, several producers wanted to transfer their coverage back to the approved insurance provider (AIP) who insured their MPCI policy in 2017. And RMA agreed. Producers can either withdraw a yet-unprocessed transfer request, void a processed request or stay with Crop Pro for MPCI coverage only. But time is running out to discuss this issue with an agent: the deadline is June 15th.
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