BULLETIN NO.: MGR-96-003

TO:      All Reinsured Companies
         All Risk Management Field Offices
         FSA Headquarters, Program Delivery and Field Offices
  
FROM:    Kenneth D. Ackerman
         Deputy Administrator

SUBJECT: Crop Revenue Coverage and Income Protection Insurance


ISSUE:

The Board of Directors of the Federal Crop Insurance Corporation (the Board) 
recently approved two pilot programs of insurance known as Crop Revenue 
Coverage (CRC) and Income Protection (IP).  Therefore, these products are 
now available to all reinsured companies to write in the 1996 crop year.

DISCUSSION:

Section 508 (h) of the Federal Crop Insurance Reform Act (Act) established 
the authority of the Board to approve reinsurance, premium subsidy and other 
support for policies submitted by reinsured companies.  CRC has been 
approved for reinsurance, premium subsidy and expense reimbursement.  CRC 
protects an insured's loss of revenue resulting from fluctuating crop prices
and/or low yields.  The pilot program for CRC coverage is available on corn 
and soybeans in all counties of Iowa and Nebraska beginning in the 1996 
crop year.  

CRC policy language, forms, and rate factor tables will be available through 
the Reporting Organization server within one week of reaching final agreement 
on the policy contract language.  Companies who wish to market CRC under the 
terms and conditions of the approved CRC product need not submit the 
policies for approval.  Inquiries regarding the CRC product should be 
directed to E. Heyward Baker, Reinsurance Services Liaison Branch (RSLB) 
at 202-720-4232.  

Section 508 (h)(6) of the Act directs the Federal Crop Insurance Corporation 
(FCIC) to offer a pilot cost of production plan of insurance.  IP is an 
insurance plan that protects against reductions in gross income when yields 
or prices fall.  The IP product is available for corn, cotton and spring 
wheat in various counties of Illinois, Indiana, Iowa, Alabama, Georgia, 
Minnesota and North Dakota.  An IP information package containing crop 
provisions, procedures, and supporting material has been sent to each 
reinsured company.  Quotation software is available on the Reporting 
Organization server.  Further inquiries regarding IP should be directed to 
Vondie O'Conner, Research Branch, at 816-926-6343.

CRC and IP will be reinsured under the Standard Reinsurance Agreement (SRA).  
Policies written under these pilot programs will be subject to the SRA's 
state maximum cessions to the Assigned Risk Fund as well as fund 
designations per Exhibit 14 of the Plan of Operations.  Both the CRC and IP 
pilot programs are approved for the 1996 and 1997 crop years only.