The Standard Reinsurance Agreement (SRA) is a cooperative financial agreement between FCIC and each of the approved insurance provider companies, referred to as AIPs, to deliver eligible crop insurance contracts to farmers and ranchers. It establishes and governs the business and financial relationship between FCIC and the AIPs, including the terms and conditions by which the FCIC will provide administrative and operating expense reimbursement and reinsurance on the eligible contracts sold by the AIPs.
The terms and conditions of the SRA may be renegotiated once every five years that started with the 2011 reinsurance year. The 2014 farm bill mandated that any future renegotiated SRA must be budget-neutral, with the congressional intention that the funds available for reinsurance and administrative and operating expense reimbursement to deliver the program not be reduced or cut unless authorized under the Federal Crop Insurance Act.
Though the SRA plays a notable role in relation to overall program costs, it does not affect the policy premiums paid by farmers, which are based on the Risk Management Agency’s (RMA’s) best estimates of risk as set by statute.
* Updated April 2021