On March 15, the USDA Risk Management Agency issued Managers Bulletin MGR-24-003 “Notice to Cease and Desist Agent/Agency Contract Terminations” in response to concerns raised by Plains Cotton Growers, crop insurance agents and producers about recent actions by some approved insurance providers (AIPs) to decrease their federal crop insurance business in specific crops, plans of insurance and geographic areas.
RMA acknowledged their responsibility to deliver crop insurance to farmers and ranchers and 'ensure all farmers are treated fairly, have access to the program, and that their agent can administer their policy without risk of losing coverage.
The fact that termination notifications sent to agents did not include adequate time for the agent/agency to act before the policy sales closing date for their customers was a major concern for RMA.
RMA stated these recent events conflict the 2024 Standard Reinsurance Agreement (SRA), which says individual insurance policies can be transferred from one AIP to another, but not cancelled by an AIP if the producer is otherwise eligible to participate in the program.
Even if an AIP terminates its contract with an agent/agency it is obligated under terms of 2024 SRA to service any policy that has not been transferred and remains with the current AIP until it is assigned to and accepted by another agent/agency.
The notice also includes new language added to the 2025 SRA and LPRA implementing new reporting requirements regarding intended business decreases, agent/agency contract termination and agent/agency compensation reductions.
AIPs must certify that any future agent cancellations will be provided to the affected agent/ agency a minimum of 60 days written notice prior to the first sales closing date of the agent/ agencies book of business. And a written notice must be sent to RMA from AIPs 30 days prior to the 60-day notice.