Crop Insurance

FCIC Needs to Improve Its Oversight of Reinsured Companies Gao ID: RCED-89-10 October 19, 1988

In response to a congressional request, GAO evaluated certain Department of Agriculture Federal Crop Insurance Corporation (FCIC) oversight activities over private companies that insure farmers against crop losses from natural disasters.

GAO found that: (1) FCIC is considering ways to expand the scope of its oversight reviews, since many of its reviews are limited because of its desire to cover as many companies as possible; (2) many of the reviews were not statistically valid for drawing reliable conclusions about the quality of a company's overall adjustment practices because of the manner in which FCIC selected its samples and the limited sample size; and (3) FCIC did not establish basic criteria for determining reinsured companies' acceptable loss adjustment performance.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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