Board members officially denied all pending Premium Reduction Plans for 2005 and officially declared that no other applications will be considered until the Department of Agriculture's Risk Management Agency conducts the necessary formal rulemaking procedures on the issue.

Effectively, allowing the Premium Reduction Plans, known as PRPs, to go through would have allowed insurers to offer coverage via the Internet at reduced prices. Additionally, an agent group representative said, it would remove controls on how and to whom the companies write their coverage and eliminate the assistance agents provide to their customers.

"Had these companies been approved prior to any rulemaking, the damage created in the marketplace would have brought the crop-insurance industry to its knees," said Patrick O'Brien, director of federal government affairs for the Independent Insurance Agents and Brokers of America.

"The likely result would have been a mass exodus of agents from crop-insurance sales, interrupted service to smaller farmers, some farming bankruptcies, and a forced consolidation of crop insurers. The FCIC board's wise and laudable decision will result in a much-needed, comprehensive review of this system, and importantly, it will give independent agents?the backbone of the crop-insurance delivery system?an important say in the rulemaking process."

Essentially, Mr. O'Brien said, approving the PRPs would have reduced the income available to agents. " Main Street agents would be forced to make up the difference by taking on a bigger book of business," he said, adding that taking on more customers meant that those agents would be less able to provide assistance to farmers.

That assistance, according to the IIABA, typically involves help with deadlines for reporting, quality control and screening information sent back from companies. In exchange for the loss, the group said that farmers would receive only a slight discount, often the equivalent of less than one dollar per acre.

However, Mr. O'Brien noted that there was a "greater concern" for the IIABA in allowing PRPs to be approved without a formal rulemaking process. "Since there are no rules," he said, "the system would be left open to cherry-picking and discrimination."

Agents are required to offer their clients every product that the insurance companies they deal with offer, Mr. O'Brien noted, but a "significant loophole" exists in that companies can decide which agents they use to offer their products.

With that power, he said, companies could effectively cherry-pick their customers by working only with those agents whose books include large, low risk customers.

The concerns regarding PRP approval were not the exclusive domain of agents. Rep. Henry Bonilla, R-Texas, the chairman of the Agricultural Appropriations subcommittee, sent a letter to Agriculture Sec. Ann Venerman supporting the formal rulemaking process in late October.