2019 Fall 7
For Part A, the examiner's report lists the fed as reinsurer, but the battle cards listed RMA as reinsurer. Can you clarify which one is the correct one?
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For Part A, the examiner's report lists the fed as reinsurer, but the battle cards listed RMA as reinsurer. Can you clarify which one is the correct one?
Comments
The examiner's report is in error. Here is the relevant passage from the source text:
". . .The private insurer services the policies including adjusting and settling any
claims resulting from the policies. The RMA acts as a reinsurer, reimbursing the
participating insurers for losses in return for a portion of the premium. In addition, the
federal government reimburses the private insurance companies for their operating and
administrative costs. The premiums paid by farmers are subsidized by the federal
government to reduce the cost to farmers and encourage farmers to participate in the
program. . . ."
I've added a note to the Battle Card and also to the Exam Summaries page, which you can see here:
So many typos in the examiner's report and these make it harder to study what's already a lot to cover! Thank you!
Sure, good luck.
Are the other answers still accurate for RMA? For example, help farmers prevent losses and underwriting the policies? Thank you.
RMA helps farmers prevent losses by helping monitor and control risks. RMA does not underwrite policies.
Ok, thank you. Two follow up questions if you do not mind. Who then underwrites the policies? And second, just to confirm, the study cheat sheet is inaccurate by saying the under the title "Govt" it "Reinsurers (Fed Govt)" in the Govt Participation section. Or is this still the case just through the RMA? Thank you.
Private insurers underwrite crop risk.
The cheat sheet meant that fed govnt reinsures crop through RMA. RMA is an agency of the fed govnt.
"RMA is an agency of the fed govnt."
Is there then any distinction between the two, despite this question separating them into different parts?
Because if they are separate, wouldn't battlecards 2 and 3 contradict battlecard 5 (in battlequiz 2)
2) premiums are subsidized by RMA
3) private insurers may CEDE a portion of the risk to the federal government
5)
RMA:
- sets rates
- acts as reinsurer (reimburses insurer losses)
- determines which crops can be insured in different parts of the country
- helps monitor and control risks
federal government:
- reimburses insurer operating costs & expenses
- subsidizes policyholder premiums
Someone just asked this same question and I've answered it here: