BULLETIN NO.:  MGR-96-061
  
TO:       All Reinsured Companies
          All Risk Management Agency Field Offices
          FSA Headquarters, Program Delivery and
          Field Operations
  
FROM:     Kenneth D. Ackerman /s/
          Administrator
  
SUBJECT:  Section 508(h) Crop Insurance Policies
          Receiving Federal Subsidy and Reinsurance
  
BACKGROUND:
  
Section 508(h) of the Federal Crop Insurance Act, as amended (the Act), 
requires the Federal Crop Insurance Corporation (FCIC) to publish any policy,
rate, or provision of a policy approved by the FCIC Board of Directors 
(Board) as a notice and to make such policies available for sale by other 
FCIC reinsured companies.  The Crop Revenue Coverage (CRC) plan of insurance 
was submitted under section 508(h) of the Act and later, on December 27, 1995, 
was approved by the FCIC Board to receive full FCIC reinsurance and subsidy.  
Similar policies may also be considered by the Board. Such policies approved 
by the FCIC Board will be published in the Federal Register as a notice.
  
ACTION:
  
1)  Crop insurance policies reinsured by FCIC are exempt from state premium 
    taxes.
  
2)  A CRC or similar crop insurance policy receiving FCIC reinsurance and 
    subsidy is considered as a replacement for the federally reinsured and
    subsidized multiple peril crop insurance policy.
  
3)  The rates, terms and conditions of CRC policies were approved by the 
    FCIC Board and may not be revised or altered.
  
4) FCIC will provide "cut-through" protection as defined in the Standard 
   Reinsurance Agreement in the event the company reinsured by FCIC is 
   unable to meet its obligations to policyholders.