BULLETIN NO.: MGR-96-043

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

FROM:     Kenneth D. Ackerman /s/
          Acting Administrator

SUBJECT:  Named Peril Policies


ISSUE:

The Federal Crop Insurance Corporation (FCIC) Board of
Directors (Board) recently approved four named peril
policies known as - Citrus Freeze Weather Insurance Policy,
Raisin Reconditioning and Excess Expense Policy, Pima Cotton
Rainfall Weather Insurance Policy, and Contracted Processing
& Cannery Tomato Policy, for reinsurance.  These policies
are now available to all reinsured companies who choose to
market these products beginning with the 1996 crop year,
except for the Contracted Processing & Cannery Tomato
Policy, which will be available beginning with the 1997
crop year.  These policies may be sold with or without an
accompanying Multiple Peril Crop Insurance Policy.

DISCUSSION:

Section 508 (h) of the Federal Crop Insurance Reform Act
(Act) established the authority of the Board to approve
reinsurance for policies submitted to the Board.  These
policies provide additional insurance coverage to producers. 
These named peril policies are available in California only,
except for the Citrus Freeze Weather Insurance Policy which
is also available in Arizona.

The approved policies, premium rates (except Contracted
Processing & Cannery Tomato Policy), and underwriting rules
will be available through the Reporting Organization server. 
The premium rate for the tomato policy will be placed on the
server when it becomes available.  Companies must use FCIC
approved named peril documents and rates to market these
products.

FCIC will make available a single stop-loss reinsurance
agreement covering these named peril policies to all
reinsured companies who choose to market these products. 
FCIC will be considered as a reinsurer of last resort;
therefore, any reinsured company seeking reinsurance on
these products will be required to negotiate reinsurance in
the private market (domestic, foreign, or both) up to the
limits established by such market.  Upon receipt of evidence
from the reinsured company that capacity for such products
has been exhausted, FCIC will negotiate terms of reinsurance
for certain limits above those secured in the private
market.  Please contact Dave Miller of the Reinsurance
Services Liaison Branch at (202) 720-9830 for more
information.

ACTION:

FCIC intends:

A.   To negotiate a separate reinsurance agreement with each
     company that wishes to reinsure any of these policies. 
     Ideally, all four products would be reinsured under one
     agreement.

B.   That the company obtain a significant amount of
     reinsurance from the commercial market (i.e. - a "fill"
     on the offering slip of at least ______%) and that
     FCIC's reinsurance will be the same as the terms
     obtained from the commercial market.

C.   To independently evaluate the market to determine if
     better conditions or a greater "fill" are possible.

D.   To evaluate the terms to determine if they are
     actuarially sound.