The report said RMA paid $22 million to more than 3,400 crop insurance policyholders who had been dead for at least two years from 2008 to 2012.

The GAO said some of those payments might have been made while the farmer was still alive, but there was no way to know for sure.

However, an official of RMA, a unit of the U.S. Department of Agriculture, said that while writing the report, GAO provided a number of samples to RMA to assess whether the premium subsidies and A&O allowances provided on behalf of deceased policyholders were proper.

"In every case, RMA determined the subsidies and allowances were proper," Shea said. 

The issue is important to the insurance industry. There are 17 crop insurers, and an estimated 18,000 insurance agents selling the product.

Shea defends RMA policies in dealing with alleged payments to dead policyholders.

"In most circumstances the crop insurance cycle provides at least one, and possibly several opportunities each year to verify the insured person or their legal representative is alive and eligible to participate in the program," he said

He said policyholders pay the premium annually, are required to provide a signed certification each year when they file the annual production and yield report., and are  also required to provide a written signature if there is a claim for loss.

 Shea said that in response to the GAO's recommendations, RMA moved aggressively to implement formal, systematic procedures to identify and prevent improper subsidies on behalf of deceased individuals.

"RMA has taken all the steps necessary to comply with the audit findings, and has moved aggressively to implement new controls, providing additional assurance that program benefits are not improperly made on behalf of deceased producers," Shea said.

GAO has issued a number of reports critical of the program, and the RMA has been under intense scrutiny since last year when government investigators found a huge fraud ring in North Carolina that for decades siphoned over $100 million from the program. The fraud ring involved insurance agents, adjusters, farmers and dozens of others.

A report released this month by the Insurance Information Institute said crop insurance has become the largest single source of financial protection to farmers.

The program has grown from insuring 182.2 million acres in 1997 to more than 280 million acres in 2012.

The I.I.I. report said data from the Federal Crop Insurance Corp. show claims payments (indemnities) for the crop year 2012 totaled more than $14.7 billion, the result of the severe drought that has resulted in significantly lower crop yields. Industry observers expect payouts to go higher as insurers finalize the remaining claims.

The government pays 60 percent of claims.

Total premiums for catastrophic and regular crop insurance programs combined amounted to more than $11 billion, and the government's coverage subsidy came to $6.9 billion, the I.I.I. said.

Claims for crop year 2011, when losses were pushed up by drought in the Southern Plains and flooding in the Midwest, were $10.9 billion.