BULLETIN NO.:  MGR-95-034

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

FROM:     Kenneth D. Ackerman
          Acting Deputy Administrator
          
SUBJECT:  Pilot Program for Intended Acreage Reports

BACKGROUND:

There is interest in streamlining the acreage reporting process by having the 
insured certify acres of a crop intended for planting at the time of 
application or production reporting. 

ACTION:

1  An intended acreage report process is authorized as a pilot program.  
   Participation on the part of insurance providers and agents is voluntary.  
   The pilot program will be continuously monitored and may be made permanent 
   or withdrawn at any time.  All participants must assist in evaluating its 
   effectiveness for reducing costs, simplifying paperwork, and avoiding 
   vulnerabilities in program administration and determining accurate premium 
   and indemnity amounts.  

2  Following are the required conditions to participate in this pilot program:

   A   Insurance providers must provide instructions to the insured which 
       indicate at least the following:

       --  the insured is responsible for reviewing, by unit, the summary and 
           submitting changes to the agent/insurance provider when any acreage 
           has been late-planted; planted earlier than the Initial Planting 
           Date (IPD), if applicable; prevented from planting; or there are 
           corrections in acres, share, varieties, practices, types, 
           additions/deletions of uninsured acreage, etc.  Insureds must also 
           provide specific legal descriptions of late-planted, prevented 
           planted, and uninsured acreage if applicable.

       --  no action is necessary (on the insured's part) if all information on 
           the summary is accurate.

       --  if the insured fails to submit corrections by the final Acreage 
           Reporting Date(ARD), coverage will be established from the 
           intended acreage information and will be binding.  Failure to 
           provide accurate information could result in a reduction in 
           indemnities.

   B   Insurance providers must include in their Plan of Operations (or submit 
       an amendment) an outline of the intended pilot program. The outline 
       must contain at least the following:

       --  Crops, areas, etc., to be included under this pilot. 

       --  The expected benefits from using this method of reporting.

       --  A quality assurance plan to evaluate the pilot program and to 
           identify any program vulnerabilities found in using this method of 
           acreage reporting. Include your methodology for measuring and 
           comparing the experience of the pilot program to previous year(s) 
           acreage report administrative experience in the pilot area. Data 
           from the previous 2-3 years acreage report administrative experience 
           (for same area and crops as the pilot program) should be used as a
           benchmark for comparing the same type of information for the year 
           or years of the pilot program.
           
           Note:  The evaluation should include at least the following items:

           (1) number of insured/agent complaints or problems associated with 
               acreage information reported or the reporting process itself, 
           (2) number of revised acreage reports as a result of changes to 
               the intended reported acreage information, 
           (3) controversial claims resulting from intended acreage report 
               data, 
           (4) acreage report review results, 
           (5) cost of processing acreage reports, and 
           (6) time spent obtaining and processing acreage reports. 
       
   C   All Data Acceptance System (DAS) edits, policy, and procedural 
       requirements apply. The insurance provider will be responsible for 
       assuring that the pilot program will be administered in a way that the 
       information collected and submitted through the DAS is as accurate as 
       if it had been collected using the traditional method of obtaining 
       acreage reports.  Note:  New DAS codes are being developed for the 
       acreage report record in order to identify the policies where this 
       method of reporting has been used.

   D   Summaries of Protection (Schedules of Insurance or other document), 
       hereafter called summary, generated from the intended acreage report 
       must be issued to each policyholder no earlier than 30 days prior to 
       the final ARD.

   E   Intended acreage report information CANNOT be reported to the FCIC DAS 
       prior to the earlier of confirmation from the policyholder after 
       planting or the final ARD.  

   F   By January 15 of each year, participating insurance providers must 
       submit the evaluation results to Delivery System Services along with 
       any suggested or recommended changes to be made in the operating 
       procedures or evaluation method. 

   G   Delivery System Services will review the Plan of Operation and 
       proposed evaluation plans for sufficiency and will advise the 
       insurance provider of approval or rejection to participate.