Crop Insurance: USDA Needs a Better Estimate of Improper Payments to Strengthen Controls Over Claims
RCED-99-266
Published: Sep 22, 1999. Publicly Released: Sep 22, 1999.
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Highlights
Pursuant to a congressional request, GAO provided information on crop insurance, focusing on: (1) the extent to which crop insurance claims are paid in error--either unintentionally or fraudulently--and, to the extent practical, a comparison of the rate at which claims are paid in error with rates for other types of insurance; (2) the insurance companies' and the Department of Agriculture's Risk Management Agency's (RMA) quality controls to ensure that accurate claims payments are made; and (3) the proposals being considered to reduce insurance companies' administrative requirements and the potential impact of these proposals on the operations of the crop insurance program.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Agriculture | The Secretary of Agriculture should require the Administrator, RMA, to evaluate the costs of alternative methods for developing more accurate estimates of error rates for claims payments and implement an alternative that would improve the estimate at a reasonable cost to the federal government. Alternatives that could be considered include having RMA sample and analyze a sufficient number of claims to make an estimate. |
Closed – Implemented
USDA's Risk Management Agency and the participating insurance companies concurred with GAO's recommendation and began implementation in early 2000.
|
| Department of Agriculture | The Secretary of Agriculture should require the Administrator, RMA, to evaluate the costs of alternative methods for developing more accurate estimates of error rates for claims payments and implement an alternative that would improve the estimate at a reasonable cost to the federal government. Alternatives that could be considered include using the claims sampling done by the insurance companies under the quality control program to make the estimate. |
Closed – Implemented
USDA's Risk Management Agency and the participating insurance companies concurred with GAO's recommendation and began implementation in early 2000.
|
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Topics
Agricultural programsClaims processingComparative analysisErroneous paymentsFloodsHurricanesInsurance claimsInsurance companiesInsurance cost controlInternal controlsNatural disastersProperty damagesCrop insurance