BULLETIN NO.: MGR-96-067

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

FROM:     Kenneth D. Ackerman
          Acting Administrator

SUBJECT:  Retention of Original Insurance Documents by Local Agencies


BACKGROUND:

The Standard Reinsurance Agreement's Plan of Operations requires reinsured companies to
identify each regional office, general agency, service center, and other company designated
office, which will retain original insurance documents relative to policyholder servicing, 
(i.e., applications, acreage reports, summaries of coverage, proofs of loss, and similar
documents), and including the names of the office managers and the identity of the states
serviced.  
The Federal Crop Insurance Corporation (FCIC) has previously approved, at companies'
request, the retention of original insurance documents for specific periods of time at a local
agent's office.

After further consideration, FCIC has determined that original insurance documents must
ultimately be retained at the company's headquarters or branch office, or other location under
the direct control of the company.  FCIC is aware that electronic systems now available allow
close monitoring of the agencies' data transmission and revisions which may include, but may
not be limited to, an electronic scan or signature pen.  However, the retention of original
insurance documents at a location under the control of the company is an important underwriting
control for preventing unauthorized changes to the original documents.

ACTION:

Effective for the 1998 Reinsurance Year, reinsured companies must retain original insurance
documents at the companies' headquarters or branch office, or other location under the direct
control of the company.  The original insurance documents must be received in the company's
office within 30 days of receipt by the agent.  Although FCIC recommends that companies
implement this procedure immediately, previous approvals allowing the retention of original
insurance documents at a local agent's office will not terminate until after the 1997 Reinsurance
Year.