INFORMATIONAL MEMORANDUM: R&D-95-012

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

FROM:    Tim B. Witt
         Acting Director
         Research and Development Division

SUBJECT: Policyholder Tracking System

ISSUE:

Questions have been raised regarding the operational status of the 
Policyholder Tracking System (PHTS) and its reliability for use in accepting 
applications and making loss payments.  

BACKGROUND:

The PHTS was fully operational effective for crop year 1994 (refer to 
R&D-94-007).  Without verification via the PHTS, there is risk in accepting 
applications or making payments to producers who are ineligible due to 
noncompliance of the Highly Erodible Land Conservation/Wetland Conservation 
(HELC/WC) and Controlled Substance (CS) provisions of the 1990 Farm Act. This 
is because the ASCS-423, 424, or 425 DO NOT indicate:  (1) when eligibility 
is the result of reinstatement via a Graduated Sanction (GS) provision of the 
1990 Farm Act, and (2) whether producers are ineligible due to violations of 
the CS provision. 

NOTE:  When an insured's eligibility has been reinstated via a GS, crop 
insurance payments cannot be made until the GS has been satisfied.

ACTION:

Use the PHTS as a standard routine in data processing.  It is imperative that 
the PHTS is used to avoid accepting or paying a loss to someone who is 
ineligible for insurance.  The HELC/WC and CS files are updated approximately 
every ten days.  Document the insured's eligibility status on the date the 
application or claim was assigned or processed by dating your diskette, tape, 
or hardcopy.  The PHTS record received from the Federal Crop Insurance 
Corporation will also be dated. 

Insureds' eligibility must be checked prior to assigning loss adjustment 
inspections or sometime during the inspection so an adjuster does not execute 
a proof of loss for an ineligible insured.  If using the PHTS delays the loss 
adjustment process, adjusters may use the ASCS-423, 424, or 425 to obtain 
insureds' eligibility status.  However, if this is done, verification through 
the PHTS must be done PRIOR to making claim payments.  If the PHTS is used 
prior to assigning a final inspection, the PHTS does not have to be verified 
again if such payment is made within 30 days.