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Western Minnesota | The federal government ( US Taxpayer ) backstop all loses, and in the rare occasion that there is a profit it gets that profit. The federal government subsideses all policies average policy subsidy is 62% of actuary cost. The goverment (and taxpayer) is the only entity with loss exposure, the farmer is covered both cost wise (subsidies on premium and guaranteed payout on claims ) and indemnity wise. The insurance companies get a percentage of every policy they write and are fully covered ( taxpayer) for any and all losses. The agent is working of a commission from the insurance agency and it is predetermined the agent has no loss exposure. So the only people that has loss exposure is RMA ( the American taxpayer) they administer this program with about 470 people I doubt with everything they do they have time or incentive to have any division that follows the market to the degree needed to think they can turn a profit hedging options and derivatives.
But it does give farmers another putty card for them to play. | |
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Insurance price
