Bipartisan bill seeks to reinstate inflation adjustment for crop insurance agents

Act also backed by national association

Bipartisan bill seeks to reinstate inflation adjustment for crop insurance agents

Insurance News

By Kenneth Araullo

The “Ensuring Access to Risk Management Act of 2024” has been introduced in the US House of Representatives, aiming to address compensation issues for crop insurance agents by reinstating an inflation adjustment that was halted in 2016.

The bipartisan bill, championed by Rep Austin Scott (R-GA) and co-sponsored by Reps Jimmy Panetta (D-CA) and Tracey Mann (R-KS), has garnered support from the National Association of Professional Insurance Agents (PIA).

The legislation responds to concerns that crop insurance agents have faced decreasing commissions since the USDA’s Risk Management Agency (RMA) ceased updating the administrative and operating (A&O) expense subsidy cap with inflation adjustments.

This cap, established under the 2011 Standard Reinsurance Agreement (SRA), determines the maximum amount that can be used to compensate agents. Since 2016, the fixed cap in 2015 dollars has not been adjusted, effectively reducing agent commissions annually.

In 2022, language asserting Congress’ belief in RMA’s authority to adjust the cap without altering the SRA was included in an appropriations package and signed into law. Despite this, the RMA has maintained that it lacks the legal authority to make such adjustments, prompting the need for legislative intervention.

Jon Gentile, chief public affairs and advocacy officer at PIA, said that the decision to stop adjusting A&O for inflation resulted in severe outcomes for crop agents and agencies.

“Jobs have been lost, small business growth has been impaired, and local community investments have, in many cases, disappeared,” Gentile said. “If Congress does not provide crop agents with inflation adjustment relief, they are likely to be forced out of the industry, until many farmers no longer have access to knowledgeable agents and their risk management expertise.”

PIA said that it is actively pursuing the passage of the bill and is advocating for a Senate counterpart to further support crop insurance agents and safeguard their roles in agricultural risk management.

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