On May 21, 2020, the Risk Management Agency (RMA) issued Informational Memorandum: COM-20-002, which provided an update to MGR-10-021 regarding agents and loss adjusters identified with disparate performance in accordance with section 515(f) of the Federal Crop Insurance Act (FCIA). https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/COM-20-002. RMA states that MGR-19-021 provides clear expectations of what actions approved insurance providers (AIPs) are to perform regarding the Agriculture Risk Protection Act (ARPA) List, including specific actions AIPs are to take with respect to agents and adjusters identified on the ARPA List. RMA also states the guidance also instructs AIPs how those actions, along with the results, should be reported to RMA. https://www.rma.usda.gov/Policy-and-Procedure/Bulletins-and-Memos/2019/MGR-19-021; https://www.rma.usda.gov/-/media/RMAweb/Bulletins/MGR/MGR-19-021-Attachment.ashx?la=en.
RMA states that the scenarios used to generate the ARPA List are subject to change from year to year so the narrative accompanying the ARPA List is attached as Appendix A and released each year. https://www.rma.usda.gov/-/media/RMAweb/Bulletins/COM/COM-20-002-Appendix-A-Attachment.ashx?la=en.
ANALYSIS – COM-20-002 is mostly directed at AIPs but it appears that in MGR-19-021, RMA provided a set of review standards for when it identified anomalous agents and loss adjusters. RMA contends that even though the losses appear to be disparate there may be a legitimate reason and requires the AIPs to conduct these follow up reviews. Attached to COM-20-002 is Appendix A, which states that RMA identified a list of agents and loss adjusters who had disparate performance based on five particular criteria.
Based on these criteria, RMA states it identified 701 distinct policies, issued by 12 AIPs, spanning 182 counties. The list identified 36 agents, with 26 of those appearing on previous ARPA lists. A total of 56 adjusters were identified, 14 of whom appeared on previous ARPA lists. No names were provided. Presumably the AIPs are now required to conduct the review specified in MGR-19-021, for each agent and loss adjuster identified.
It is unclear what RMA does with the information provided by the AIPs. It would seem concerning that 72 percent of agents and 25 percent of loss adjusters were identified on the disparate performance list in prior years.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.