RMA official: Claims audit process could be adjusted
The drought of 2012 unfortunately has raised the bar on crop damages. USDA’s Risk Management Agency will take that into account, an agency official told Illinois farmers last week.
Published: Sep 17, 2012
If a loss amount is equal to or greater than $200,000 per crop per county per claim type (such as a production loss claim), RMA normally requires a three-year Actual Production History audit before the claim can be settled.
However, Michael Alston, RMA deputy administrator for insurance services, told Illinois Farm Bureau Leaders to Washington his agency may re-evaluate audit requirements if an unusually high volume of $200,000-plus claims emerge this fall. At this point, fewer than 5 percent of claims submitted nationwide trip the audit trigger, Alston said.
“We’re monitoring things, and if we see a huge spike, then we could make some adjustments,” he told FarmWeek. “We’re looking at this state-by-state. If folks in Illinois are experiencing a major tick upwards, we can adjust that.”
As of last Tuesday, some $1.4 billion in spring crop claims had been paid, including roughly $29 million in Illinois losses, though Alston noted “the claims are just starting to roll in.”
Last year, under far less severe conditions, insurers paid a total of $11 billion in largely early-season claims -- $2.3 billion in Illinois.
Audit paperwork requirements will remain the same regardless of whether RMA scales back on audits, Alston said.
At the same time, RMA’s Springfield regional office plans to focus on quality loss claim eligibility requirements for Illinois corn growers whose crop is susceptible to mycotoxin.
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