Industry News
PIA-Backed Bill to Reinstate Crop Inflation Adjustment Introduced in House
Apr 17, 2024, 15:05 PM
by
Sade Hale
The bipartisan “Ensuring Access to Risk Management Act of 2024,” which would reinstate an inflation adjustment for crop insurance agents, was introduced this week in the U.S. House of Representatives by Rep. Austin Scott (R-GA), with Reps. Jimmy Panetta (D-CA) and Tracey Mann (R-KS) as original cosponsors. The proposal is backed by the National Association of Professional Insurance Agents (PIA).
WASHINGTON – The bipartisan “Ensuring Access to Risk Management Act of 2024,” which would reinstate an inflation adjustment for crop insurance agents, was introduced this week in the U.S. House of Representatives by Rep. Austin Scott (R-GA), with Reps. Jimmy Panetta (D-CA) and Tracey Mann (R-KS) as original cosponsors. The proposal is backed by the National Association of Professional Insurance Agents (PIA).
The bill seeks to provide relief for crop insurance agents who have had their commissions effectively cut for the past several years, ever since the USDA’s Risk Management Agency (RMA) abruptly stopped providing an inflation adjustment to crop agent compensation in 2016. The legislation would require the RMA to reinstate an annual inflation adjustment and provide for specialty crop relief.
Background: The 2011 Standard Reinsurance Agreement (SRA), which is the contract between the federal government and crop insurers, establishes a cap on the administrative and operating (A&O) expense subsidy, a pool of funds from which crop insurers pay agent commissions. Then, beginning in 2016, the RMA stopped making annual adjustments to the total A&O subsidy cap for inflation, leaving the cap fixed in 2015 dollars, where it remains today. These actions resulted in effective cuts to crop insurance agent commissions, during a historically challenging time for agents.
In late 2022, PIA and its allies successfully advocated for the inclusion of language in an appropriations package, which was ultimately signed into law, stating Congress’ belief that the RMA has the legal authority to reinstate the inflation adjustment without renegotiating the SRA. Despite this explicit Congressional declaration, the RMA insists that it does not have the legal authority to reinstate the inflation adjustment and has declined to act. As a result, this bill was developed to address the issue directly.
“For years, crop agents have been compensated less and less every year, with many experiencing substantial financial hardship, all because of this disagreement between the RMA and Congress about the scope of the RMA’s authority,” said Jon Gentile, PIA’s Chief Public Affairs and Advocacy Officer.
“The RMA’s decision to stop adjusting A&O for inflation devastated crop agents and agencies. Jobs have been lost, small business growth has been impaired, and local community investments have, in many cases, disappeared. 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 thanks Reps. Scott, Panetta, and Mann for their support of crop insurance agents and their leadership on this important issue,” Gentile said.
PIA is also working on a Senate companion bill. PIA will advocate for the Ensuring Access to Risk Management Act’s passage.
Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance but specialize in coverage of automobiles, homes, and businesses. PIA’s web address is www.pianational.org.
The bill seeks to provide relief for crop insurance agents who have had their commissions effectively cut for the past several years, ever since the USDA’s Risk Management Agency (RMA) abruptly stopped providing an inflation adjustment to crop agent compensation in 2016. The legislation would require the RMA to reinstate an annual inflation adjustment and provide for specialty crop relief.
Background: The 2011 Standard Reinsurance Agreement (SRA), which is the contract between the federal government and crop insurers, establishes a cap on the administrative and operating (A&O) expense subsidy, a pool of funds from which crop insurers pay agent commissions. Then, beginning in 2016, the RMA stopped making annual adjustments to the total A&O subsidy cap for inflation, leaving the cap fixed in 2015 dollars, where it remains today. These actions resulted in effective cuts to crop insurance agent commissions, during a historically challenging time for agents.
In late 2022, PIA and its allies successfully advocated for the inclusion of language in an appropriations package, which was ultimately signed into law, stating Congress’ belief that the RMA has the legal authority to reinstate the inflation adjustment without renegotiating the SRA. Despite this explicit Congressional declaration, the RMA insists that it does not have the legal authority to reinstate the inflation adjustment and has declined to act. As a result, this bill was developed to address the issue directly.
“For years, crop agents have been compensated less and less every year, with many experiencing substantial financial hardship, all because of this disagreement between the RMA and Congress about the scope of the RMA’s authority,” said Jon Gentile, PIA’s Chief Public Affairs and Advocacy Officer.
“The RMA’s decision to stop adjusting A&O for inflation devastated crop agents and agencies. Jobs have been lost, small business growth has been impaired, and local community investments have, in many cases, disappeared. 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 thanks Reps. Scott, Panetta, and Mann for their support of crop insurance agents and their leadership on this important issue,” Gentile said.
PIA is also working on a Senate companion bill. PIA will advocate for the Ensuring Access to Risk Management Act’s passage.
Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance but specialize in coverage of automobiles, homes, and businesses. PIA’s web address is www.pianational.org.