BULLETIN NO: MGR-99-002.2
TO: All Reinsured Companies
All Risk Management Field Offices
All Other Interested Parties
FROM: Kenneth D. Ackerman /s/ Robert J. Prchal 2-10-99
Administrator
SUBJECT: Emergency Financial Assistance to Farmers
BACKGROUND:
In follow up to MGR-99-002.1 Action item A, the following guidelines are
provided to address implementation provisions for the crop insurance premium
incentive discount (premium discount) resulting from the Emergency Financial
Assistance.
ACTION:
A. Crop Insurance Premium Incentive Discount (Premium Discount)
1. Billing -- For crops with billing dates after February 1, 1999, companies will
deduct the estimated 30 percent premium discount from the producer premium on
the billing statement. The following language must be included to notify producers
of the additional reduction in premium:
"Your premium has been reduced by an estimated 30 percent, resulting from funds
made available by USDA for Emergency Financial Assistance."
For crops that have already been billed and in which payment has been received by
the company, the estimated 30 percent discount must be calculated and
refunded to the producer no later than April 1, 1999. Risk Managment Agency
(RMA) recommends that companies provide an enclosure with the refund check
stating the reason for the refund. Similar language, as stated above, may be used
in this notification.
2. Premium Discounts and Loss Processing -- By not later than March 1, 1999,
Claims for Indemnity should be applied against the producer premium after
reductions for any applicable premium discount, prior to issuance of any indemnity
check to the producer. Companies should follow the refund process mentioned
above if producer premium, without reduction of any applicable discount, was
deducted and retained by the company for losses processed prior to March 1,
1999.
3 . Data Processing -- The Data Acceptance System (DAS) is being modified in
accordance with the draft Manual 13 slip sheets issued January 22, 1999. Exhibit
11-10 of the draft slipsheets contains an additional step for determining producer
premium to include reduction for premium discounts. This allows the Reinsurance
Accounting System to continue recognizing the "Producer Premium" amount as
premium due from the reinsured company. Reinsured companies must only collect
and report to DAS this adjusted "Producer Premium" amount. Reinsured
companies may begin submitting data with producer premium reflecting applicable
premium discount amounts on March 1, 1999. However, through the April
accounting cutoff, reinsured companies may continue to submit data to DAS
utilizing the previous record formats without being rejected.
DISPOSAL: This bulletin is effective until December 31, 1999.