Crop Insurance Today November 2014 - (Page 1)
"...Where to now, St. Peter?"
Viability: Tipping Points
Laurie Langstraat, Editor
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National Crop Insurance Services
8900 Indian Creek Parkway, Suite 600
Overland Park, Kansas 66210
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send old address label clipped from recent issue
along with your new or corrected address to
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Tom Zacharias, NCIS President
This is the last in our three part series "...Where
to now St. Peter?" that we began earlier this year. The
purpose for the series was to start thinking about the
future path of the crop insurance industry as we implement the Farm Bill and enter a new paradigm in
farm policy. Our physical metaphor is a stable threelegged stool. The first two legs of the stool we discussed were "Availability" (Crop Insurance TODAY®,
May 2014) and "Affordability" (Crop Insurance TODAY®, September, 2014).
Now we turn our focus to the issue of viability,
specifically the economic viability of the private sector delivery system. As one of the three legs of the
stool, the "viability" of the private sector delivery system is integral to the health and overall well-being of
the crop insurance program.
Stepping back for a moment, it is important to define a few terms and put our discussion in
First, the term "viability." In a business context, "viability" can be defined as the "capacity to
operate or be sustained" (Dictionary.com); alternatively, "viable" can be defined as "having a
reasonable chance of succeeding...financially stable..." (Merriam Webster Online Dictionary).
The Parties Involved
NCIS® EXECUTIVE COMMITTEE
Tim Weber, Chairman
Mike Day, Vice Chairman
Jim Korin, Second Vice Chairman
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.
Time and time again in this publication and elsewhere, the expression "public-private partnership" is used to describe the United States crop insurance program. The public element of
the partnership is personified by the United States Department of Agriculture (USDA) and the
Risk Management Agency (RMA), the Federal agency responsible for administering Federally
regulated crop insurance. Responsibilities of the RMA include: the development of crop insurance policies and the underlying procedures, establishment of fair and adequate premium rates,
provision of financial support and risk-sharing of premium and losses and regulatory oversight
of the crop insurance companies.
The "private" element of the partnership is comprised of the insurance companies, crop insurance agents, crop adjusters and the reinsurance community. Crop insurers are responsible for
selling and servicing the policies, equitable and timely adjustment of crop insurance claims and
risk-sharing of premiums and losses with USDA/RMA.
In this partnership, there is a key factor that determines the economic viability of the private
sector delivery system. Simply put, in order to remain viable, crop insurance companies and
the industry as a whole need to generate an adequate return on their investment. The fact that
sufficient returns are needed to keep enterprise moving is not an earth-shattering revelation, but
it is at the core of the public-private crop insurance partnership, and far too often, it is misunderstood and overlooked.
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Continued on page 38
Table of Contents for the Digital Edition of Crop Insurance Today November 2014
Viability: Tipping Points and Headwinds
Hosting a Successful Adjusting School As Easy as Apple Pie?
What to Watch for with New Herbicides
NCIS 2014 Adjuster School 14 for ‘14
1890 Scholarship Recipients
Crop Insurance Plan Comparison
A Voice for Agriculture
In Memory of David Gabriel and Kent Petersen
Whitmore Retires After 27 years in Crop Insurance
Crop Insurance Today November 2014