BULLETIN NO.:      MGR-95-018

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

FROM:     Kenneth D. Ackerman
          Acting Deputy Administrator 

SUBJECT:  Wheat Appraisal Monitoring Program in Colorado, Kansas, Missouri and  
          Nebraska

          
BACKGROUND:

The wheat crop in the Midwestern Region of the United States has experienced 
moderate to severe damage.  A widespread freeze in early April, drought 
conditions last fall, and insect infestation has affected a large number of 
the wheat acreage in the region.  The Risk Compliance Division has received 
reports that allege low or inaccurate appraisals have been made.

ACTION:   

Beginning today and for the remainder of the 1995 insurance period, the 
Federal Crop Insurance Corporation's (FCIC) Risk Compliance Division will 
conduct a review to monitor wheat appraisals in Colorado, Kansas, Missouri 
and Nebraska. 

The purpose of the review is: 

     (1) to determine if wheat acreage is being released with low or 
         inaccurate appraisals, assessed for production to count;

     (2) to assess compliance with NCIS Bulletin No. 95055 and Informational 
         Memorandum R&D-95-021; and

     (3) to determine who the approved wheat appraisal procedures were 
         followed.


FCIC's Risk Compliance Division will monitor CFSA/RSO and company performed 
reappraisals of unharvested wheat acreage.  The Kansas City Compliance Office 
(KCO) will oversee this initiative, in cooperation with the CFSA County 
Offices and reinsured company field supervisors/representatives.  Reappraisals 
of wheat acreage will be conducted by Loss Adjustment Contractors and company 
field supervisors/representatives.  

Attached is an outline of the procedures and appraisal performance tolerances 
to be followed during the course of the review.  The  KCO will be responsible 
for the logistical details related to these procedures.

Attachment

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MGR-95-018                                        ATTACHMENT I


STEPS TO FOLLOW DURING THE WHEAT APPRAISAL MONITORING PROGRAM:


1.   CFSA/RSO and companies will inform loss adjusters not to finalize wheat 
     claims (release acreage) at the field level.  These claims should be 
     finalized at the CFSA/RSO and company level.  Loss adjusters should 
     advise insureds to keep representative samples/acreage intact until it 
     is released by the cfsa/rso and/or company.

2.   CFSA/RSO and companies will provide the KCO with appraisal information 
     worksheets via mail or fax at the following address:

     USDA/ Federal Crop Insurance Corporation
     Compliance Field Office
     P. O. Box 419293
     Kansas City, Missouri 64141
     Phone Number: (816) 926-7963
     Fax Number: (816) 926-5186

     KCO will review the  Worksheets upon receipt and notify the CFSA/RSO 
     and/or companies within one (1) business day which policies have been 
     selected for reappraisal.  Worksheets received after 3:00 pm will be 
     reviewed the next business day.  Exhibit 1 is the worksheet to be 
     completed for the review.  

3.   CFSA/RSO and companies should release acreage (finalize claim) for those 
     policies not selected for reappraisal once notified by the KCO.     

4.   KCO will coordinate and monitor reappraisals with cfsa/rso and company 
     field supervisors/representatives within two (2) business days of policy 
     selection and CFSA/RSO and/or company notification.  CFSA/RSO and 
     companies should provide KCO with the name and location of field 
     supervisors/representatives and loss adjustment contractors (point of 
     contact) who will be responsible for conducting reappraisals.  

5.   KCO should be notified of quality control reviews and preharvest and 
     growing season inspections conducted by the CFSA/RSO and/or companies 
     and provided a copy of the findings.

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MGR-95-018                                        ATTACHMENT II

 
THE TOLERANCE POLICY FOR DETERMINING WHEN AN APPRAISAL IS UNACCEPTABLE WILL 
BE AS FOLLOWS:


1.   FCIC-approved policies and procedures were not followed, resulting in a 
     difference of any amount between the findings made by a reappraisal and 
     an original appraisal of any amount.

2.   FCIC-approved policies and procedures were followed:

     A difference of 10 percent or more exists between the results of a 
     reappraisal and that of an original appraisal of 20 bushels or greater.

     A difference of  2 bushels or more exists between the results of a 
     reappraisal and that of an original appraisal of less than 20 bushels.

When a unit is reappraised and found to contain a determination that is 
unacceptable, it will be defined to be incorrect.  All differences in a unit 
loss determination defined to be incorrect will be corrected by the CFSA/RSO 
and/or company.

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   (Exhibit #1 "1995 Wheat Crop Reviews" is unavailable in text format.)