The Independent Insurance Agents & Brokers Association (IIABA, Alexandria, Va.) is opposed to the U.S. Department of Agriculture's (USDA) approval of a "premium discount plan" (PDP) submitted by Occidental Fire & Casualty Company of North Carolina (Raleigh; parent company IAT Reinsurance has over $500 million in surplus). The IIABA charges that the discount is enabled as a result of the carrier offering farmers the option to purchase crop insurance online without the intermediation of agents. The service is offered through Occidental's full-service administrator, Crop 1 Insurance, at www.crop1insurance.com.
Due to the complexities of crop insurance, the IIABA believes that granting self-service capabilities to those seeking coverage is not in farmers' best interest. "You can't treat crop insurance the same way that you treat auto insurance," says Patrick O'Brien, a lobbyist for the IIABA. "Crop insurance ... requires institutional know-how to guide the farmers based on what and where they are growing."
Recognizing that not all farmers are confident purchasing crop coverage independently, Crop 1 also offers the option of purchasing insurance through agents, says Rob Boysen, COO, Crop 1. "We have hundreds [of agents] who are willing to work with the farmers at their kitchen tables to determine the coverage most suited to their needs," he asserts. And there is no difference in cost, stresses Boysen, who explains that all farmers are eligible for the PDP.
Although the IIABA acknowledges that producer-assisted purchasing options are made available by Crop 1, the IIABA's O'Brien charges that Crop 1's agent network is comprised of seed and pesticide dealers who happen to be licensed agents. "Just because an agent has a license doesn't mean that he is experienced," says O'Brien, who concedes that agents belonging to Crop 1's agent network would be granted membership into the IIABA. However, "You'd be hard-pressed to find an IIABA member who believes [in what Crop 1] is doing," he adds.
Crop 1 reports that its agent network is comprised of independent agents, lending institutions, farm management companies and other related companies, such as seed companies, that have licensed insurance agents. According to Crop 1, all licensed agents must comply with the same requirements and laws as other agents. And many agents who work with Crop 1 can, and do, represent other crop insurance companies.