INFORMATIONAL MEMORANDUM: R&D-95-045 TO: All Reinsured Companies CFSA Headquarters, Program Delivery & Field Operations All Risk Management Field Offices FROM: Tim B. Witt /s/ TBW 10/25/95 Acting Director Research and Development Division SUBJECT:1996 Group Risk Plan (GRP) Policies Attached are the GRP Forage Production Policy, GRP Wheat Policy, GRP Basic Provisions 94-101 and GRP Basic Provisions 94-102 effective for the 1996 crop year. The following are brief descriptions of significant changes made in these provisions. The primary changes have resulted from the passage of the Federal Crop Insurance Reform Act of 1994 (Act) and the decision to allow Catastrophic Risk Protection (CAT) coverage under the GRP Forage Production Policy. Please refer to the attached revised provisions for more complete information. Also attached is an updated Index of Policies in effect for the 1996 crop year. 1. GRP Forage Production Policy 94-133 (Rev. 10-95): (a) Language has been added to the introduction explaining GRP Forage CAT coverage. (b) The dollar amount of protection that the insured may select has been specified as between 60 and 100 percent based on the requirements of the Act. The language changes are reflected both in the introduction and in section 3 (Protection Per Acre). (c) Reference to a 30 percent subsidy has been removed from both the introduction and from the definition "Subsidy." The first three paragraphs in the "Example to Demonstrate How GRP Works" have been modified to change the subsidy from 30 percent of the premium to a dollar amount per acre. This change reflects the variability of subsidy percentages which are stated as dollar amounts on the Actuarial Table. (d) The specific date for the end of the pilot program has been removed from the heading on page two and in section 19 (Life of the Policy and Policy Renewal). 2. GRP Wheat Policy 94-111 (Rev. 10-95): (a) The 65 percent coverage level selection has been removed from the introduction since this coverage level is only available for CAT, and CAT coverage is not available for wheat for the 1996 Crop Year. (b) The dollar amount of protection that the insured may select has been specified as between 60 and 100 percent based on the requirements of the Act. The language changes are reflected both in the introduction and in section 3 (Protection Per Acre). (c) Reference to a 30 percent subsidy has been removed from both the introduction and from the definition "Subsidy." The first three paragraphs in the "Example to Demonstrate How GRP Works" have been modified to change the subsidy from 30 percent of the premium to a dollar amount per acre. This change reflects the variability of subsidy percentages which are stated in dollar amounts on the Actuarial Table. (d) The specific date for the end of the pilot program has been removed from the heading on page two and in section 19 (Life of the Policy and Policy Renewal). (e) The sales closing date has been removed from section 20 (Policy Dates) since it is contained in the Special Provisions. 3. GRP Basic Provisions 94-101 (Rev. 10-95): (Only Soybeans Attach) (a) The 65 percent coverage level selection has been removed from the introduction since this coverage level is only available for CAT, and CAT coverage is only available for 1996 GRP forage production which does not attach to Basic Provisions 94-101 (Rev. 10-95). (b) The dollar amount of protection that the insured may select has been specified as between 60 and 100 percent based on the requirements of the Act. The language changes are reflected both in the introduction and in section 4 (Protection Per Acre). (c) Reference to specific subsidy percentages has been removed from both the introduction and from the definition of "Subsidy" in section 1 (Definitions), since subsidy percentages vary and are stated as dollar amounts on the Actuarial Table. 4. GRP Basic Provisions 94-102 (Rev. 10-95): (a) The 65 percent coverage level selection has been removed from the introduction since this coverage level is only available for CAT, and CAT coverage is only available for 1996 GRP forage production which does not attach to Basic Provisions 94-102 (Rev. 10-95). (b) The dollar amount of protection that the insured may select has been specified as between 60 and 100 percent based on the requirements of the Act. The language changes are contained in both the introduction and in section 4 (Protection Per Acre). (c) Reference to specific subsidy percentages has been removed from both the introduction and from the definition of "Subsidy" in section 1 (Definition), since subsidy percentages are variable and are stated as dollar amounts on the Actuarial Table. We recognize the contract change date and fall sales closing dates have passed for GRP wheat and most GRP barley for the 1996 crop year. However, both the GRP wheat, 94-111 (Rev. 10-95) and the Basic Provisions 94-102 (Rev. 10-95) were revised to correct language to conform with the Act. The October 1995 changes do not adversely affect producer's coverage, and the GRP Actuarial Filings are correct. The corrected policies should be sent to GRP wheat and barley policyholders. You will need to send the corrected policies to GRP policyholders for the remaining six spring crops, for which the contract change date has not passed. Any questions or requests for a WordPerfect formatted diskette containing the revised GRP provisions should be directed to Dave Clauser, Product Development Branch at (816) 926-7730. Attachment