BULLETIN NO.: MGR-96-058

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

FROM:    Kenneth D. Ackerman
         Acting Administrator

SUBJECT: Clarification of "Competing Agency"


BACKGROUND:

Section V.F.3 of the Standard Reinsurance Agreement (Agreement) states:

    The Company may not permit its sales agents, local agency employees, 
    sales supervisors, or their spouses or family member residing in the same 
    household as any such sales agent, local agency employee, or sales 
    supervisor to adjust losses, or supervise or otherwise control loss 
    adjusters, nor to participate in the determination of the amount or cause 
    of any loss nor to verify yields of applicants for the purpose of 
    establishing any insurance coverage or guarantee, if the eligible crop 
    insurance contracts involved are sold or serviced by or through the sales
    agent, local agency employee, the local agency, any competing agency, or 
    by any agent or local agency supervised by the sales supervisor. 
    (Emphasis added)

The term "competing agency" is not defined in the Agreement.  To clarify this 
term, the Federal Crop Insurance Corporation (FCIC) has determined that a 
"competing agency" is an agency in any county (including all counties 
adjoining such county) in which the local agency has sold or is in the 
process of selling any crop insurance policy which has been approved by 
FCIC's Board of Directors (Board).

ACTION:

Effective for the 1997 reinsurance year, reinsured companies must ensure 
that:

    1)   sales agents and local agency employees (including their spouses and 
         family members residing in the same household) are not involved in 
         loss adjustment or yield verification on any Board-approved policy 
         in any county (including all counties adjoining such county) in 
         which the local agency has sold or is in the process of selling any 
         Board-approved policy.

    2)   sales supervisors (including their spouses and family members 
         residing in the same household) are not involved in loss adjustment 
         or yield verification on any Board-approved policy in any county 
         (including all counties adjoining such county) in which any agency 
         supervised by the sales supervisor has sold or is in the process of 
         selling any Board-approved policy.