BULLETIN NO.:  MGR-95-013

TO:       All Reinsured Companies
          CFSA Headquarters, Program Delivery and Field Operations 
          All Risk Management Field Offices

FROM:     Kenneth D. Ackerman
          Acting Deputy Administrator
               
SUBJECT:  Duplicate Insurance Policies


ISSUE:

There is a potential for a significant number of duplicate policies to be in 
place this year.  The purpose of this Bulletin is to remind program 
participants of FCIC's rules for the resolution of duplicate policies.

The increase in duplicate policies may be due to misunderstandings over 
linkage requirements mandated by the Federal Crop Insurance Reform Act of 
1994 as some producers may have obtained duplicate catastrophic risk 
protection (CAT) policies in order to assure eligibility for certain other 
Department of Agriculture program benefits.

ACTION:

FCIC regulations prohibit producers from insuring the same crop in the same 
county for the same crop year under more than one insurance policy.

When duplicate coverage is discovered by FCIC's data acceptance system (DAS), 
the second policy received will be rejected.  Rejection by the DAS is not a 
determination of which policy should continue in force.  Rather, it is the 
responsibility of the insurance providers involved (reinsured companies and 
Consolidated Farm Service Agency local offices) to determine in each case 
which policy will be continued and which will be canceled, in accordance with 
the following:

1.   In general, if two or more applications are filed for the same crop and 
     crop year, the application filed first is valid and all others shall be 
     denied.

2.   In general, if the producer submits Form FCIC-480, Cancellation/Transfer 
     of Experience, along with an application before the sales closing date, 
     all other policies, including those for which application is made in the 
     same crop year, shall be canceled. 

3.   However, if a CAT policy is previously obtained and a limited or 
     additional coverage policy is subsequently purchased for the same crop 
     year, the CAT policy must be canceled (see Subpart T General 
     Administrative Regulations, 400.655 (a)(3) and 1995 FCIC 18100 
     Catastrophic Risk Protection Handbook, Section  4, Par. F(2)).

4.   If there is a carryover policy and a new policy for which a Form 
     FCIC-480, Cancellation/Transfer of Experience has not been executed, 
     the new policy must be canceled.

5.   If coverage provided by a policy at less than the CAT level (50/60) is 
     subsequently duplicated with a new CAT policy but such policy remains in 
     force, then coverage must be increased to the required level by April 28, 
     1995 (see R&D-94-048 and R&D-94-048.1), and the new duplicate policy 
     must be canceled.

6.   Any administrative fee paid for coverage that is subsequently canceled 
     because of duplication shall be refunded to the producer by the 
     insurance provider canceling the policy.  The insurance provider 
     furnishing coverage for the crop shall collect the applicable 
     administrative fee from the producer.

7.   An insurance provider may, at its sole discretion, mutually agree to 
     cancel coverage so long as coverage is maintained with another insurance 
     provider.

8.   An insurance provider who cancels a policy or rejects an application 
     because of duplication shall notify the applicant/insured in writing of 
     that action. 

Delays in resolving conflicts may have an adverse financial impact on the 
insured producer as well as other insurance providers; therefore, all involved 
parties shall resolve such conflicts for any policy that may be affected as 
quickly as possible.  Insurance providers shall cooperate fully with each 
other to timely resolve the duplicate policy issues and eliminate farmer 
confusion.  This involves, but is not limited to, providing copies of all 
relevant documentation and reviewing the matter with the other providers.