NPC Calls For Insurance Investigation

Published online: Jul 25, 2000
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Because of suspected irregularities in the use private insurance to cover risk management in the price growers receive for their potatoes, the National Potato Council is seeking an investigation.

On July 24, the NPC wrote to Ken Ackerman, administrator of the USDA Risk Management Agency, asking for the investigation of private companies that tie private policies to RMA policies.

The NPC is concerned that even though Congressional language assured federal funds would not be used for revenue protection policies for potatoes, some private insurers issued these policies with the requirement that the insured have a Multi-Peril Crop Insurance policy in full force and effect during the policy period.

Also, no claims under the policy shall be valid or payable unless and until the assured has suffered a loss under the MPCI policy for which liability has been admitted.

The NPC has asked the RMA to identify the companies and number of policies involved, determine whether the policy requirement of having a federally insured policy violates the USDA law, and if there is any fraud involved.

There is some concern that the insurance not only reduced the risk of planting potatoes this year, but also distorted the planted acres in states such as Idaho this year. Idaho's planted acres are at 415,000 acres, 20,000 more than 1999.

There is speculation that as much as 20 percent of Idaho's crop may be covered by such revenue-protection insurance.