At the end of 2009, RMA began renegotiating the SRA created in 2004. Prior to the negotiations, some had criticized the fact that it was too generous for insurance companies after a significant increase in government costs in recent years, in part because of rising crop prices. The 2008 Farm Accounts (P.L. 110-246) allow USDA: the SRA every five years from the 2011 reinsurance year (from July 1, 2010 to June 30, 2011).1 USDA estimates that the new SRA has reduced federal plant insurance spending by $6 billion on a 10-year-old child, using the government`s basic plan of February 2010.32 that $4 billion in savings would be spent on reducing US$2 billion for risk management and conservation. Including the extension of pasture, grassland and forage insurance plans and a discount for producers. USDA notes that the new agreement generally maintains the previous SRA`s A-O subsidy structure, but removes the possibility of "wind-in" government payments based on peak commodity prices33 Although insurance companies have signed the agreement, the insurance industry remains concerned about the potential impact of reduced funding on the overall supply of the program and on the quality of services to producers. Company Book - the aggregation of all eligible plant insurance contracts between the company and its policyholders who have a closing of sales during the reinsurance year and who have the right to be reinsured under the SRA. Operating plan - documents and financial information that the company must submit annually to the FCIC for approval. The information includes the identification of company officials, declarations relating to the amounts of deductions and expenses of companies reassurance under the agreement relating to the previous calendar year. To reduce the costs of the program state, some have suggested that the new SRA could change the amount of insurance profits that businesses return to the government.18 They say that if the state`s share of profits is increased in exchange for a greater share of the state`s losses in years of losses, the average cost to taxpayers would decrease. The insurance industry argues that the net participation rate of the SRA would amount to a tax on insurance revenues and would supersede private reinsurance. The industry wants it eliminated and wants the overall reserves of profits and losses to be revised to reduce the potential for unusually high profits or losses. The industry expects this approach to stagnate deterrence so that insurers can offer insurance in less profitable (high-loss) conditions.
Withholdings - as with the final net losses, net premium or account of the transaction, the remaining liability applies to final net losses and the right to the net premium after all reinsurances have been transferred to FCIC under this agreement. Plant insurance warns that the basic structure of the SRA - z.B. The number and operation of existing reinsurance funds and minimum retention percentages - should remain unchanged in order to preserve both the availability of plant insurance and the participation of farmers.