American Agrisurance Inc has agreed to a $3.7 million settlement with rice farmers from around the country who accused the company of reneging on a price agreement. Previously, the company, based in Council Bluffs, Iowa, agreed to settle by providing $1.65 million for a research and education fund plus $1.2 million to reimburse the Federal Crop Insurance Corporation.
These funds were set up by court order Monday. In 1999, American Agrisurance enrolled farmers in a crop insurance plan called CRCPlus, which guaranteed at least 3 cents per pound for rice. But in March 1999, demand outstripped the company’s ability to pay. While the company anticipated five times its normal amount of business, it ended up with 10 to 20 times that amount.
Since then, the company has developed a new application monitoring system to provide prompt confirmation of coverage and also close sales when capacity limits are reached.
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