WASHINGTON, D.C., Dec. 11 - The Independent Insurance Agents & Brokers of America (IIABA) is praising an agreement reached between the U.S. Department of Agriculture’s Risk Management Agency (RMA) and the Nebraska Department of Insurance that ensures commissions affiliated with policies sold by Acceptance Insurance Company subsidiaries and reinsured by the Federal Crop Insurance Corporation (FCIC) will be paid to agents.
RMA Administrator Ross Davidson and Nebraska Department of Insurance Director L. Tim Wagner signed a Memorandum of Understanding that establishes the responsibilities and understandings between the two organizations as they work together to make certain that all outstanding policy claims will be paid and service to producers for 2002 policies will continue. Company personnel, loss adjusters and agents will continue serving insured policyholders by completing the adjusting of 2002 losses. Under the crop insurance program, farmers pay premiums after the producing season. Thus, farmers will be in a position to pay premiums and agents will receive commissions for work completed long ago. The agreement also enables timely and orderly transfer of monies in the crop insurance program.
“We are pleased that our agents’ concerns and the needs of their clients have been properly addressed,” says IIABA Executive Committee member Bob Fulwider, principal and executive vice president of the Ray Wuestenberg Agency, Inc.,West Liberty, Iowa; and The Fulwider Agency, Inc., West Branch, Iowa.
“We applaud RMA and the Nebraska DOI for working together to guarantee that the financial problems of these companies do not prevent crop insurance agents from receiving full, timely payment of their commissions for work already performed on behalf of their farm clients,” Fulwider adds.
Prior to the agreement, IIABA sent a letter to Davidson on behalf of agents impacted by RMA’s rejection of Acceptance Insurance’s proposed sale of its two subsidiary crop insurance companies to the Rain and Hail insurance company. Agents doing business with the two subsidiary companies of Acceptance Insurance—American Growers Insurance Inc. and AmAg—have been extremely concerned because the move has delayed commission payments and the orderly transfer of business.
When the Order of Supervision was first announced, there were major concerns within farmer and agent groups. Some industry sources indicated that agents would be treated as unsecured creditors and might not receive payment.
IIABA additionally worked with Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) and incoming Finance Committee Chairman Chuck Grassley (R-Iowa) on this situation. “I would like to personally thank Sens. Harkin and Grassley for their prompt attention to this matter,” says Fulwider. “This was a tremendous bipartisan effort to ensure the proper business outcome for agents and their clients in Iowa and in other states.”
“This agreement is great news for agents and producers. I tip my hat to Administrator Davidson and Commissioner Wagner for achieving the best result in an unfortunate and sensitive situation,” says IIABA Senior Washington Representative Rob Houton. “We also are grateful to Sens. Harkin and Grassley for working with these officials to ensure an amenable and sufficient transition. This was an issue of extreme importance to independent agents associated with American Growers’ transactions.”
Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life and health—as well as employee benefit plans and retirement products. Web address: www.independentagent.com.