Ace Ltd. and other banks and insurers who provide crop insurance to farmers would receive $6 billion less in federal funding over ten years under a proposal by the US Department of Agriculture, Bloomberg News reported yesterday.

Payments for administrative costs would be capped at $1.3 billion in 2011 with the limit rising to $1.37 billion in 2015, according to the final draft of a proposed Standard Reinsurance Agreement the USDA is offering to the companies.

Negotiations between the government, which subsidises the policies, and insurers have been under way since December. The USDA released details on the plan yesterday in Washington.