Crop Insurance Today February 2014 - (Page 1)

TODAY PRESIDENT'SMESSAGE Four Keys to 2014 Laurie Langstraat, Editor TODAY® IS PROVIDED AS A SERVICE OF NATIONAL CROP INSURANCE SERVICES® TO EDUCATE READERS ABOUT THE RISK MANAGEMENT TOOLS PRODUCERS USE TO PROTECT THEMSELVES FROM THE RISKS ASSOCIATED WITH PRODUCTION AGRICULTURE. TODAY is published quarterly-February, May, August, and November by National Crop Insurance Services 8900 Indian Creek Parkway, Suite 600 Overland Park, Kansas 66210 www.ag-risk.org If you move, or if your address is incorrect, please send old address label clipped from recent issue along with your new or corrected address to Donna Bryan, at the above address. It is always a little tricky to prepare the President's Message for the first issue of the year for TODAY® magazine, and there are several reasons for that. First, the first issue is published at the time of our Crop Insurance Annual Industry Convention. Second, with that publication date, it requires that all articles be written and edited several weeks in advance of the meeting. Third, due to the lag between preparation and publication, a lot of "current events" can transpire, making it somewhat difficult for our messages and information to be both timely and relevant. So, with those caveats, let us attempt to put down a few thoughts and get the ball rolling for 2014. Because of the highly fluid and uncertain economic and Tom Zacharias, NCIS President political climate we find ourselves in, it seems that establishing hard-and-fast metrics for 2014 might be a bridge too far. Alternatively, let us consider a few "Rules of the Road," or "Keys," we can use to guide and analyze our decision-making in the New Year. These "Rules" or "Keys" are: first, insurance-based risk management; second, science-based decision-making; third, cost-benefit analysis; and fourth, program integrity. Application of Insurance-Based Risk Management NCIS® EXECUTIVE COMMITTEE Tim Weber, Chairman Mike Day, Vice Chairman Jim Korin, Second Vice Chairman NCIS® MANAGEMENT Thomas P. Zacharias, President Charles Lee, General Counsel James M. Crist, CFO/COO Frank Schnapp, Senior Vice President Mike Sieben, Senior Vice President Creative Layout and Design by Graphic Arts of Topeka, Inc., Kansas Printed on recycled paper. At the end of the day, NCIS member companies are in the insurance business. Through the crop insurance agent force, some 15,000 strong, coverage and liability is established for each INDIVIDUAL farmer who purchases insurance. Crop insurance agents are required to be licensed in the states in which they operate and fulfill their annual continuing education requirements in order to maintain their license. Individual farmers renew their policies or modify their existing policies with their licensed agent and pay an insurance premium for their coverage. In 2013 farmers paid approximately $4.5 billion in premium, establishing approximately $120 billion in liability or more than $400 per acre of coverage given the 290 million acres insured in 2013. Only in the event of a loss, either a revenue or production loss, do farmers receive an indemnity in the Federal crop insurance program. These indemnities are determined by crop insurance loss adjusters who must be licensed by the state where the claim occurs or have received their accreditation through the NCIS Crop Adjuster Proficiency Program (CAPP®). As a result of a joint effort between the National Association of Insurance Commissioners (NAIC), the Risk Management Agency (RMA), and NCIS, CAPP® has been approved by a number of individual state insurance departments to satisfy their own exam requirements. Greater and continued acceptance of CAPP® will help in the long run to ensure that a properly educated adjusting force can quickly service Federal crop insurance claims when disaster strikes, as was the case in the drought conditions of 2011 and 2012. There are several "key" advantages to an insurance-based system for risk management. First, use of actuarial premium-setting allows for a more accurate estimation of program costs Printed with Environmentally friendly vegetable oil based inks. Continued on page 35 CropInsurance TODAY® 1 http://www.ag-risk.org http://www.ag-risk.org

Table of Contents for the Digital Edition of Crop Insurance Today February 2014

Four Keys to 2014
A 25 Year Milestone in Farm Policy, Looking Back at the 1989 GAO Report
Excellence & Professionalism, No Matter What Comes Our Way!
Corn Loss Instructions Updated for 2014
There's a Right Tool for Every Job! NCIS' IMAP could be the one you're missing
Crop Insurance In Action: Crop Insurance Lifeline
FFA Proficiency Winner
Insurable Crops Locations & Plans
Crop Insurance In Action - A Young Farmer on a Mission to Stay in Farming

Crop Insurance Today February 2014

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