The federal agency had greenlit the business model three times before reversing course.

A federal court has denied a crop insurance software vendor's emergency bid to block a USDA bulletin that threatens its business.

The ruling, issued on March 31, 2026, leaves in place a February 2026 bulletin from the Risk Management Agency that effectively reclassifies certain third-party software payments as agent compensation under the Standard Reinsurance Agreement.

Brisk Insurance Services LLC sells policy administration software to approved insurance providers participating in the Federal Crop Insurance Program, which covers more than 444 million acres and $150 billion in crop and livestock value. The company launched in February 2025 after spending more than two years getting its business model vetted by the Federal Crop Insurance Corporation, the government entity that reinsures private crop insurers.

Between 2022 and 2023, Brisk's founders – software developers Bozic LLC and Watts and Associates, Inc. – submitted their proposed business structure to the Corporation on three separate occasions, each time asking whether it complied with the SRA's rules on agent compensation. Each time, the Corporation responded that it had found no violations. With that green light, Brisk went live and signed multi-year contracts with four AIPs: American Agricultural Insurance Company, Great American Insurance Company, Rural Community Insurance Company, and QBE Americas, Inc.

Brisk's model, however, had a distinguishing feature. It was designed to serve a single association of agents – Farm Credit – rather than an AIP's entire agency force. Farm Credit also directly financed Brisk's software development and start-up costs, with Brisk repaying that investment using service fees derived in part from the federal subsidies that AIPs receive for operating expenses.

That arrangement drew scrutiny. In May 2025, the Corporation began meeting with Brisk's four AIP clients about conflict-of-interest concerns. In October 2025, the Corporation received a formal complaint about the business model. By December 2025, it had learned that others might try to replicate it.

On February 20, 2026, the Corporation issued Manager's Bulletin MGR-26-002, titled "Agent Compensation - Third Party Software Payments." The bulletin allows AIPs to contract with independent service providers for general policy administration software without those payments counting as agent compensation – but only as a general matter. Payments will be treated as compensation if any of three conditions exist: the service provider is funded by the agencies that benefit from its software, those agencies have authority to control the service provider's work, or the software is offered to a select group of agencies rather than the AIP's entire agent force.

Brisk's arrangement appears to trigger at least some of those conditions. Under the SRA, agent compensation is capped at 80 percent of the federal administrative and operational subsidy. According to Brisk, reclassifying its software fees as compensation would make it commercially unworkable for AIPs to keep contracting with the company while remaining within the cap.

However, the court noted Brisk offered no evidence that the AIPs lack room within the 80 percent threshold to continue those payments.

Great American has already told Brisk it will not include the company in its 2027 plan of operations – due April 1, 2026 – and intends to terminate their contract, though no specific date has been given. Brisk says it expects the other three AIPs to follow.

Brisk filed suit on March 10, 2026, arguing the bulletin was arbitrary and capricious under the Administrative Procedure Act and asking the court for an emergency stay before the April 1 deadline.

The court acknowledged that the bulletin appeared, on its face, to conflict with the agency's own prior positions. The Corporation had approved Brisk's business model multiple times without expressing concern, and the new bulletin did not appear to acknowledge any change or explain the rationale. Under established law, agencies can change course – but they must show awareness of the shift, offer a reasoned explanation, and account for reliance interests.

Still, the court did not reach that question. Instead, it found that Brisk had not demonstrated the kind of irreparable harm required to justify emergency relief. The SRA allows AIPs to amend their plans of operations after the April 1 submission deadline, and the Corporation represented to the court that it would make a determination on any amended plan that includes Brisk – if submitted by June 24, 2026 – before the 2027 reinsurance year begins on July 1. Brisk itself conceded that being added to an amended plan before that date would address its concerns. The court found that concession dispositive.

On the question of contract terminations, the court was equally unpersuaded. Brisk could not identify when any AIP planned to terminate, and it did not demonstrate that the AIPs lacked room within the 80 percent cap to continue paying for its software. The court characterized Brisk's claims as speculative and unsupported by the record.

The motion was denied without the court weighing in on the remaining factors: likelihood of success on the merits, balance of equities, or public interest.

The case now moves to expedited merits briefing, with the parties ordered to propose next steps by April 6, 2026. The Corporation has also indicated it is considering a supplemental bulletin, with a decision expected by April 8.

Source - https://www.insurancebusinessmag.com