Crop Insurance: FCIC Needs to Improve Its Oversight of Reinsured Companies
RCED-89-10
Published: Oct 19, 1988. Publicly Released: Oct 28, 1988.
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Highlights
In response to a congressional request, GAO evaluated certain Department of Agriculture Federal Crop Insurance Corporation (FCIC) oversight activities over private companies that insure farmers against crop losses from natural disasters.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | To improve the effectiveness of FCIC oversight of the loss adjustment activities of reinsured companies and to provide a better basis for judging the overall performance of individual companies, the Secretary of Agriculture should require the Manager, FCIC, to emphasize the use of statistically valid random sampling techniques and appropriate sample sizes, where it is cost-beneficial, in selecting claims for review. |
Closed – Implemented
FCIC has drafted a handbook that addresses this and other issues. An accomplishment report will be drafted.
|
| Department of Agriculture | To improve the effectiveness of FCIC oversight of the loss adjustment activities of reinsured companies and to provide a better basis for judging the overall performance of individual companies, the Secretary of Agriculture should require the Manager, FCIC, to develop criteria to use in evaluating the results of compliance reviews and for determining the acceptability of a company's loss adjustment performance. The criteria should explicitly state when FCIC will suspend a company's operations and the circumstances under which FCIC will assume a company's loss adjustment function. |
Closed – Implemented
FCIC adopted a set of performace standards for use in evaluating results of its compliance reviews. An accomplishment report is being drafted.
|
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Topics
Agricultural programsClaims processingDisaster relief aidFarm produceInsurance claimsInsurance companiesInsurance lossesInsurance regulationMonitoringNatural disastersReimbursements to governmentCrop insurance