BULLETIN NO.: MGR-98-029

TO:      	All Reinsured Companies
    		All Risk Management Field Offices
    		All Other Interested Parties
    
FROM:    	Kenneth D. Ackerman /s/ Ken Ackerman    10-8-98
    		Administrator

SUBJECT: 99-073 1999 Nursery Crop Insurance Policy and State Assigned Risk Limitations

BACKGROUND:

On September 24, 1998, Federal Crop Insurance Corporation (FCIC) published a final rule for the
99-073 Nursery Crop Provisions for the 1999 and succeeding years.  FCIC stated in Managers
Bulletin 98-026 on the Nursery Crop Provisions (99-073) Final Rule that designation of policies
to the Assigned Risk Fund will be made in accordance with section II.B.1 of the 1999 Standard
Reinsurance Agreement (1999 SRA).  Reinsured companies have expressed concern regarding the
potential liability associated with the 99-073 1999 Nursery Crop Insurance Policies and have
requested that FCIC allow the reinsured companies to amend their approved plan of operation to
assign all or some of the 99-073 1999 Nursery Crop Insurance Policies to the Assigned Risk Fund
without regard to the maximum allowable cession for any individual state contained in section
II.B.1.d of the 1999 SRA.
 
ACTION:

Since the 99-073 1999 Nursery Crop Insurance Policy is a new policy offered for the 1999 crop
year, the reinsured companies have 30 days after the date of sale to designate the policy to one of
the funds.  Further, section V.G.1.c of the 1999 SRA authorizes reinsured companies to submit
requests to revise their plan of operation when there is a change in business considerations and
sales expectations that occur after the plan of operation has been approved by FCIC.

FCIC considers the current situation to meet the above stated criteria.  Further, since there have
been no losses associated with the 99-073 1999 Nursery Crop Insurance Policy, FCIC has
determined that the risk to FCIC as a result of placing all or some of the 99-073 1999 Nursery
Crop Insurance Policies into the Assigned Risk Fund would not materially increase the risk to
FCIC.  Therefore, FCIC will approve those written requests to place all or some of the 99-073
1999 Nursery Crop Insurance Policies into the Assigned Risk Fund without regard to the
maximum cessions stated in section II.B.1.d of the 1999 SRA.