BULLETIN NO:  MGR-95-037

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

FROM:    Kenneth D. Ackerman
         Acting Deputy Administrator

SUBJECT: Raisin Monitoring Program


BACKGROUND:

Several complaints have been received regarding incorrect application of 
raisin loss adjustment practices and procedures.  The areas of most concern 
involve the handling of raisins sold as salvage that are later reconditioned; 
the prices obtained for raisins sold for salvage and the methods used for 
establishing tray weights and field discards.

ACTION:

The Risk Management Sacramento Compliance Office (RMSCO) will initiate a 
review to monitor 1995 raisin loss adjustment.  The review will: 
(1) determine if the raisins can feasibly be reconditioned before releasing 
    the raisins to be disked or sold as salvage; 
(2) if the highest salvage price was obtained; 
(3) if accurate tray weights and field discards are being established. 
To determine that applicable approved procedures are followed, RMSCO will 
monitor reinsured company and Consolidated Farm Service Agency (CFSA) raisin 
loss adjustment.  RMSCO in cooperation with reinsured company and CFSA field 
representatives, will supervise this initiative.

Effectively immediately, all reinsured companies and CFSA offices will begin 
mailing/faxing the raisin proof of loss to the RMSCO.  


Note: No production can be released to be disked or sold as salvage use until 
      approval has been given by the RMSCO.

Verification of intended disposition and valuation of damaged raisins will be 
conducted by reinsured company and CFSA field supervisor/representatives and 
monitored by RMSCO personnel for accuracy.  Attached is an outline of the 
procedures and performance tolerance to be followed during the review.  The 
RMSCO will be responsible for the logistical details to these procedures.

Steps to follow during the Raisin Claim Monitoring Program:

1.  Companies will inform loss adjusters (for raisins to be disked or sold as 
    salvage) not to finalize claims (do not release raisins to be removed or 
    disked ) at the field level.  These claims should be finalized at the 
    company level.  Loss adjusters should advise insureds to keep the raisin 
    trays intact until they are released by the company.

2.  Companies will provide RMSCO with raisin proof of loss via mail or fax at 
    the following address:
    
    USDA/Risk Management Compliance Office (RMSCO)
    1303 J Street, Suite 460
    Sacramento, California  95814
    
    Phone Number: (916) 498-5288
    FAX Number:   (916) 498-5396


    RMSCO will review the proof of loss upon receipt and notify the reinsured 
    company and CFSA within one (1) business day which policies have been 
    selected for review.  Proof of losses received after 3:00 p.m. will be 
    reviewed the next business day.

3.  Companies are permitted to finalize the claims for those polices not 
    selected for review once notified by RMSCO.

4.  RMSCO will coordinate and monitor reviews with company CFSA field
    supervisors/representatives within two business days of policy selection 
    and company notification.  Companies should provide RMSCO with the name 
    and location of field supervisors/representatives (point of contact) who 
    will be responsible for conducting reviews.

5.  RMSCO should be notified of quality control reviews conducted by the 
    companies and CFSA, and be provided a copy of the findings.

The tolerance policy for determining when a claim determination is 
unacceptable will be as follows:

(1) FCIC-approved policies and procedures were not followed, resulting in a 
    difference of any indemnity amount between the original determination and 
    the reappraisal determination.

(2) FCIC-approved policies and procedures were followed:

    When a indemnity difference the lesser of $1,500 or 10 percent per unit 
    exists between the original determination and the reappraisal 
    determination.

When a unit is reviewed 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 
adjusting organization.