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Crop insurers have paid $822 million to drought-stricken farmers: NCIS

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Crop insurers have paid $822 million to drought-stricken farmers: NCIS

OVERLAND PARK, Kan.—Crop insurers have paid out $822 million in claims this year with much of the nation suffering a severe drought, although it is too early to provide precise estimates of the losses, the head of the National Crop Insurance Services Inc. said Friday.

Thomas P. Zacharias, president of the Overland Park, Kan.-based NCIS, said that final losses will vary by state, crop and types of insurance purchased.

“What is certain is that the crop insurance industry is on the ground in the drought-stricken areas, mobilizing loss-adjuster teams,” Mr. Zacharias said in a statement. “Farmers can be assured that their claims will be paid, and that the companies will move as quickly and as efficiently as possible, given the expected volume of claims, to assess damages and get indemnity checks into the hands of farmers.”

Under the Federal Crop Insurance Program's public-private partnership, 15 private companies are authorized by the U.S. Department of Agriculture's Risk Management Agency to write multiple-peril crop insurance, according to the NCIS.

Rates are set by the federal agency. The insurers cede about 20% of their premiums, and about 40% of their losses during most years, to the federal government, according to a December report by New York-based rating agency Standard & Poor's Corp.

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