BULLETIN NO.: MGR-98-025

TO:       All Reinsured Companies
          All Risk Management Field Offices
          All Other Interested Parties
    
FROM:     Kenneth D. Ackerman /s/    9/18/98
          Administrator

SUBJECT:  Implementation of  the 1998 Research Act for Policies with a Sales Closing Date
          After the Date of this Bulletin

BACKGROUND:

The Agricultural Research, Extension, and Education Reform Act of 1998 (1998 Research Act)
legislated changes in the fees that producers would be required to pay for Catastrophic Risk
Protection Policies (CAT).  Specifically, the administrative fee for CAT coverage for each crop
in the county will be $10 plus the greater of either $50 or 10 percent of the premium under a
CAT policy. 

On July 14, 1998, the Senate Appropriations Committee passed Amendment No. 3128 to amend
the Federal Crop Insurance Act by suspending the 10 percent premium portion of the
administrative fee imposed by the 1998 Research Act for fiscal year 1999.  Whether this change
is enacted for the 1999 reinsurance year depends on the outcome of the Agriculture
Appropriations Conference Committee.

Reinsured Companies have raised questions regarding what to tell insureds who do not wish to
obtain or retain CAT coverage if the 10 percent of premium provision is applicable; however,
would remain insured if the amount for the CAT crop policy is $60.

ACTION:

Due to the uncertainty regarding the applicability of the 10 percent of premium provision for
CAT coverage, for the 1999 reinsurance year only, reinsured companies may allow CAT insureds
for all crop policies with a sales closing date after the date of this bulletin to obtain coverage
based on the following conditions: 1) Insured producers and new applicants must sign the
applicable statement contained in Attachment A, and 2) Reinsured companies who choose to
offer CAT insureds these conditions must advise RMA in writing, agree to reinsure all such
policies under the current Standard Reinsurance Agreement and associated fund designation
deadlines and must advise RMA that it will not seek compensation for any expenses incurred for
such policies that may be canceled.





                          Attachment A.

For Carry Over Policyholders:

  "I hereby agree to pay an administrative fee for Catastrophic Risk Protection for the 1999
  crop year of not more than $60 and if the fee is greater, my policy will be considered as
  canceled by the cancellation date."

  _______________________________           ________________________
  Insured Signature and Date                     Agent Signature and Date


For New Applicants:

  "I hereby make application for Catastrophic Risk Protection (CAT) for the 1999 crop year
  under the condition that I will pay an administrative fee of not more than $60.  If the
  administrative fee for this CAT coverage is greater than $60 my application will be
  rejected."

  _______________________________           ________________________
  Insured Signature and Date                     Agent Signature and Date































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