BULLETIN NO.: MGR-95-006 TO: All Reinsured Companies CFSA Headquarters, State, and County Offices All Risk Management Field Offices FROM: Kenneth D. Ackerman 2/12/95 Acting Deputy Administrator SUBJECT: Workload Issues and Accepting Late-Filed Applications for Catastrophic Risk Protection Coverage for the 1995 Crop Year (1995 and 1996 Crop Years for Arizona, California, and Texas Citrus) BACKGROUND: The Federal Crop Insurance Reform Act of 1994 (Act) specified sales closing dates affecting applications for catastrophic (CAT), limited and additional insurance coverage. Due to the date of passage of the Act, the impact on program development, and the need to communicate the linkage requirements to maintain eligibility for certain Department of Agriculture (USDA) program benefits, these dates may not afford producers full opportunity to purchase insurance coverage which meets their risk management needs and thus maintain such program eligibility. Both Consolidated Farm Service Agency (CFSA) personnel and reinsured company agents and representatives are facing considerable workload problems in informing producers of the requirements under the Act and still meet sales closing date/application deadlines. ACTION: To facilitate the delivery of the reformed crop insurance program under the tight deadlines of this initial implementation, the following procedures are authorized for the subject crop years only to address workload issues and provide for acceptance of late filed applications: 1995 CAT coverage deadline for crops with calendar 1994 sales closing dates The Interim Rule, General Administrative Regulations published January 6, 1995, provided that for crops with a sales closing date or an insurance attachment date prior to January 1, 1995, the sales closing date would be the latest spring sales closing date in the county. The Final Rule will provide that for crops with a sales closing or an insurance attachment date prior to January 1, 1995, the latest sales closing date for CAT coverage only for these crops will be March 15, 1995. Use of registers CFSA county offices and reinsured company agents may use a register to record a producer's intent to make timely CAT application. This process is intended only to address situations where large numbers of producers may come to an office to make application within the last few days before sales closing and can not be serviced in a timely manner. When county offices or agents have time, they are strongly encouraged to take a full application during the farmer's initial visit rather than use this register process. The register must include the producer's name and signature, social security or tax identification number, a list of the crop(s) planted to date and any expected to be planted. For the register entry to be effective to signify timely application for the crop listed, the producer must pay the applicable $50 processing fee for each crop. Late filed application procedures for CAT coverage 1. Late-filed CAT applications will be accepted: a. For 30 calendar days after the CAT sales closing date for non- program crops, and; b. Through April 28, 1995, for price support and production adjustment program crops, including tobacco, rice, extra long staple cotton, upland cotton, feed grains, wheat, peanuts, oilseeds, and sugar. 2. The producer must certify the request for a late-filed application is only for the purpose of meeting the linkage requirements of the Act. 3. The producer must certify that the crop has not been planted or the crop has been planted and is in good condition (capable of producing at least 90 percent of the APH yield for the crop on the unit). 4. The producer must pay the $50 dollar administrative processing fee, if applicable. 5. Preacceptance crop inspections are not necessary for late-filed applications for CAT coverage. However, late-filed applications accepted under these guidelines will be subject to random spot checks made by the local CFSA or reinsured company. A minimum of 5 percent of the late-filed policies by crop and State, will be spot checked. If growing conditions in the area are favorable, this percentage may be reduced. If the late-filed application is taken before the normal planting period for the crop, such policy would not be subject to spot check to determine the condition of the crop. 6. Insurance will attach 10 days after the application is signed by the producer and agent, unless the crop will not qualify under item 3. 7. If the insurance risk becomes excessive, FCIC will announce that the acceptance of late-filed applications is discontinued. Standard Reinsurance Agreement - Assigned Risk Designations For assigned risk purposes, reinsured companies must designate such policies within 90 days after the CAT sales closing date, except for program crops. Such date shall be within 60 days after April 28, 1995 for program and other price supported crops. The Data Acceptance System Handbook, Manual 13, will provide instructions for submitting data for CAT applications accepted under this bulletin.