Crop Insurance Today August 2016 - 21

CropInsurance TODAY An Overview Crop Insurance Industry Organizations By Ashley Craft, NCIS While the Federal Crop Insurance Act was established in 1938, crop insurance actually began in the 1800s when the first hail insurance policy was offered to tobacco growers in Connecticut. Farmers within the state came together to organize an insurance company which stayed in business for seven years. Later, in 1893, Farmers Mutual Hail Insurance Company of Iowa, the oldest, currently-operating crop insurance company was founded. PRIVATESECTOR As the need for protecting a nation's food and fiber supply began to expand, additional crop insurance companies began to join the business. And as the number of companies expanded, the need for an industry trade association arose. In 1915, the Western Hail and Adjustment Association, a predecessor to National Crop Insurance Services (NCIS), was formed by crop insurance companies to devise a system to adjust losses and to compile an adequate statistical base to permit actuarial analysis. Over the years, other trade associations would be formed, all providing training, advice, and guidance to crop insurance industry members. With hundreds of years of combined specialized crop insurance knowledge within the crop insurance trade associations and private-sector insurance companies helping the industry evolve, this safety net has become the number one risk management tool used by farmers. Trade association staff have a collective understanding of products, policies and the needs of the American farmer and continuously work to make sure crop insurance efficiently safeguards producers and consumers across the nation. So, who are the trade associations that operate in the crop insurance industry today? There are three whose membership includes the insurance and reinsurance companies and agents who sell and service federal and private insurance products for farmers. National Crop Insurance Services n NCIS National Crop Insurance Services (NCIS) is a not-for-profit trade association whose members include each of the 17 crop insurance companies that participate in the Federal crop insurance program. These companies are responsible for writing Crop-Hail insurance, Federal crop insurance policies, and privately developed risk management products, so it is a high priority for NCIS to properly educate and inform companies of changes or updates within the industry. NCIS and its predecessor organizations have provided members support in their crop insurance businesses since 1915. NCIS is a licensed advisory organization and statistical agent for private Crop-Hail insurance in 49 of the 50 states, and it assists the crop insurance industry in meeting the regulatory requirements of these states. This is accomplished by filing the appropriate policy forms and statistical information with state insurance departments. Further, NCIS serves as a liaison with individual state insurance departments through active participation with the National Association of Insurance Commissioners (NAIC). The association continuously works with the government to provide a complex risk management safety net to every producer in America if they choose to purchase crop insurance. NCIS is often challenged with the task of analyzing proposed legislative changes to determine industry effectiveness, developing actuarial scenarios, testing the data and reporting the findings to the Federal government to assist in the decision-making process and prevent unintended risk to production agriculture. In addition, NCIS organizes annual conferences and loss adjuster schools to ensure companies are aware of up-to-date procedures and policies. Approximately 90 percent of insurable farmland is protected under Federal crop insurance and NCIS and its members work hard to ensure the stability of this important risk management tool. CROPINSURANCE TODAY® 21

Table of Contents for the Digital Edition of Crop Insurance Today August 2016