The structure of crop insurance is such that companies have dollars at risk on every policy and are thus financially incentivized to reduce fraudulent claims. The industry has extensive training and education efforts including a certified loss adjuster proficiency program in which all adjusters must participate.
Because program integrity is vital for continued public support, fighting fraud, waste and abuse is a key priority for the industry and the USDA through the Risk Management Agency (RMA) and the Farm Service Agency (FSA). There are numerous monitoring, review, audit and other oversight requirements in the Standard Reinsurance Agreement (SRA), which is the contract between the Federal government and insurers. The private-sector crop insurance industry and RMA have fought to minimize fraud and have implemented effective and unprecedented measures to deter and identify false claims. The program has been a pioneer in the use of data mining, conducting thousands of reviews of claims data to ensure a high level of program integrity.
Brandon Willis, the current Administrator of USDA’s Risk Management Agency, which manages the Federal Crop Insurance Program, has said “The Federal Crop Insurance Program is a central component of our nation’s farm safety net, and when one farmer takes advantage of that system, all farmers are hurt. To preserve the safety net for honest, hard-working farmers, the Risk Management Agency actively works to decrease fraud, waste and abuse in the Federal Crop Insurance Program.”