BULLETIN NO.:  MGR-96-009

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

FROM:     Kenneth D. Ackerman
          Deputy Administrator

SUBJECT:  Florida Citrus Policy Change for the 1996 Crop Year 

BACKGROUND:  
 
Section 508 (b) of the Federal Crop Insurance Reform Act (Act) of 1994 states 
that catastrophic risk protection (CAT) shall offer a producer coverage for a 
50 percent loss in yield--on an individual yield basis--indemnified at 60 
percent of the expected market price, or a comparable coverage (as determined 
by the Corporation).   

FCIC determined the Florida Citrus Endorsement (90-02) did not conform with 
the requirements of the Act because loss payments began once damage to the 
crop exceeded 10 percent.  To conform with the Act, an interim rule was 
published in the Federal Register on June 6, 1995, requiring that CAT 
policyholders incur 50 percent damage before they are eligible for a crop 
insurance indemnity.  This was after the April 15 contract change date. The 
revised Florida Citrus Endorsement (90-02) (Rev. 6-95) was forwarded to 
insurance providers for implementation August 29, 1995, and the interim rule 
was published as a final rule on December 5, 1995.  

Concerns have been raised regarding the lateness of this change and the 
timeliness of notification to effected parties. 

ACTION:

For the 1996 crop year only, CAT insureds may choose between loss computation 
provisions contained in the original Florida Citrus Endorsement (90-02) or 
those contained in the revised Florida Citrus Endorsement (90-02) 
(Rev. 6-95).  

The CAT loss provisions changed by the interim rule and contained in the 
Florida Citrus Endorsement (90-20) (Rev. 6-95) will be effective for the 
1997 crop year.