BULLETIN NO.:  MGR-97-007

TO:       All Reinsured Companies
          All Risk Management Field Offices
          All Other Interested Parties

FROM:     Kenneth D. Ackerman
          Acting Administrator

SUBJECT:  Third Party Payment of Administrative Fees


BACKGROUND:

On June 27, 1996, the Federal Crop Insurance Corporation (FCIC) issued an 
Informational Memorandum regarding the third party payment of administrative 
fees.  Third parties are prohibited from paying the administrative fees on 
the producer's behalf.  It is permissible for a third party to pay the 
administrative fee when acting in place of the producer, such as a 
landlord/tenant or legal guardian.  The second Informational Memorandum 
issued on August 15, 1996, provided that certain individuals may pay the 
administrative fees under an actual business agreement with the producer.  
This August 15, 1996, Informational Memorandum was never meant to be 
construed as liberalizing the June 27, 1996 prohibition.

ACTION:

Reinsured companies, insurance agents, producer associations, grower groups, 
farm cooperatives, etc. may not pay the administrative fees for producers.  
Only those persons acting in place of the producer under a power of attorney, 
landlord/tenant agreement, or a legal guardianship, may pay the administrative 
fee.  As outlined in the August 15, 1996, memorandum, insurance agents may 
accept payment of fees from producers and submit a total sum of the fees to a 
reinsured company.  However, the agent must attach a list of producers from
whom the fees were collected to substantiate the sums submitted.