BULLETIN NO.: MGR-96-020

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

SUBJECT:  Crop-Hail Premium Discounts Tied to MPCI Purchases


ISSUE:

The Federal Crop Insurance Corporation (FCIC) has received information 
regarding the use of discounted crop-hail premiums as an incentive to 
producers to purchase multiple peril crop insurance (MPCI).

DISCUSSION:

Any reinsured company offering discounts on Crop-Hail premiums which are 
contingent upon the purchase of MPCI is in violation of the Standard 
Reinsurance Agreement (SRA).  FCIC may take such actions as authorized by and 
in accordance with the SRA and the rules and regulations of FCIC including, 
but not limited to, not providing reinsurance, subsidy, or expense 
reimbursement on the associated MPCI policy.  Any reinsured company employing 
this marketing strategy must immediately cease and desist its use.