Informational Memorandum: R&D-96-009 TO: All Reinsured Companies All Risk Management Field Offices FSA Compliance Production Division, Program Support Branch (CPAD-PSB) FROM: Tim B. Witt /s/ TBW 3/6/96 Director Research and Development Division SUBJECT: Data Processing Managers' Meeting Results A Data Processing (DP) Managers' Meeting was held in Kansas City February 21-23, 1996, with the primary objective to discuss new crop programs and changes for the 1997 crop/ reinsurance year. The discussions and exchange of ideas were very productive and will be used to formulate 1997 DP strategy. The highlights of the meeting and tentative changes agreed to are as follows. Actuarial Maps. Insurance providers agreed that the preferred way to present the actuarial map areas in the actuarial documents is through the use of strings of legal land descriptions for identification. The Insurance Services/Regional Service Offices' representatives agreed to provide these data, and the Actuarial Branch will develop a supporting grid system for all areas of the country that are not part of the Public Land Survey System. As requested, the data will be generated to the quarter-quarter section level. Land areas that are partially affected by an actuarial map area will be identified and will refer to a map for determining the actual classification for an insurance quote. As these data strings are developed, they will be issued in the applicable actuarial documents. In the interim, we will scan all actuarial maps and issue them electronically. This will enable the Federal Crop Insurance Corporation (FCIC) to eliminate paper completely, and all actuarial documents will be issued electronically. Data Telecommunications. The Actuarial Branch has almost completed establishing and testing full capabilities for reinsured companies to transmit data and receive feedback via the Reporting Organization (RO) Server. The RO Server will provide increased capabilities and transmission speeds. We also have the opportunity to establish revised criteria for submitting data for validation and acceptance. The consensus of the attendees was to revise the data transmission times when we move to the RO Server to the following: Data files received by 6 p.m. Saturday night will be processed as part of that week's business and accounting processes. Data files received after 6 p.m. but before midnight on Saturday will be date/time stamped for acceptance for reporting deadline purposes but will be processed the following business day. 1997 Reinsurance Year Actuarial Document Filings. Restructured and standardized crop, type, and practice codes were distributed with a request for comment by COB March 8, 1996. We plan to implement these four character crop codes and the standardized type and practice codes in the 1997 reinsurance year actuarial filings. We will also use the insurance plan code to denote different crop insurance programs in lieu of different crop codes. For example, wheat would always be coded 0011 with available insurance plans for multiple peril crop insurance (MPCI), Group Risk Plan (GRP), Income Protection (IP), and Crop Revenue Coverage (CRC) programs. We are continuing to re-engineer our business processes. We have completed the actuarial filing system and will be generating the documents for 1997 from the new system on the Sun computer. Our next major effort is to re-engineer the rating process. To facilitate this project, we plan to minimize 1997 individual county rate changes for crops with a contract change date through June 30. We will only address those county crop programs with the greatest need for rate adjustments. The time saved from rate reviews will be used to re-engineer the rate generation process. Pending the results of the re-engineering efforts, rates for crops after the June 30 filing may be revised or follow similar procedure. For 1997 we will file actuarial documents for those county-crop programs that have rate changes. This supports a long-term goal of not filing all county-crop programs every year. However, as requested by the DP Managers, we will reissue all county actuarials for 1997 so the crop, type, and practice code changes can be implemented at one time. This will begin with the April 15 filing. The consensus was that incremental implementation would be too difficult to properly manage. Other actuarial filing changes for 1997 include the addition of state summary-of-change documents with each filing, automated tables of contents by filing, allowing prices/dates/factors for Options, standardized Supplement fields, and automated generation of unit division guidelines. Software and Models. Software for the automated version of the 1997 M-13 Data Acceptance System Manual and the 1997 version of the Premium Calculation software were presented. Also discussed were several updates/fixes to the Premium Calculation Software. It was noted that Florida fruit and tropical trees, and the IP and CRC products, will not be available for the Premium Calculation software for 1996 but will be included for 1997. The automated M-13, Premium Calculation software changes/fixes, and the data models for the Actuarial Filing System, Policy Database, and the Statistical Plan Database will be made available to insurance providers on the RO Server. The automated Written Agreement software will also be made available when it is ready for field test within the next month. Miscellaneous Issues. Program issues and reporting requirements were discussed and resolved in detail for Florida tropical and fruit trees, IP, CRC, and millet. The data system rounding rules for CRC were also defined and agreed upon, and will be issued in the next revision to the 1996 M-13. The IP FORTRAN software has been revised by Montana State University to reduce calculation times and facilitate conversion to COBOL for installation on company computers for data validation and other processing needs. The new version was discussed at the meeting in detail by Montana State University representatives, and future discussions are planned. The revised IP software and associated tables have been placed on the RO Server. Actuarial Branch is converting the revised software to COBOL and will make the code available to insurance providers as soon as it is completed and tested (3-4 weeks). CAT price elections were also discussed. The allowable 60 percent price election for CAT coverage was rounded up for 1995 and 1996 since the data systems are not configured to allow for tenths of cents in price elections (e.g., for a 100 percent price of $0.09 per pound, the CAT price calculates to $0.054 per pound and rounds to $0.06 per pound). The consensus of the insurance providers was to change the applicable policies to hundredweight to eliminate the problem in lieu of modifying the data systems and databases to accommodate tenths of cents. This recommendation is being taken under advisement pending a final decision. Current edits will be revised as follows: To accept, under a single policy number, multiple county crop policies with differing coverages/programs (e.g., an insured's corn policy in one county at 65/100, and a second corn policy in another county at CAT). In addition, a new flag will be established to allow election of a 100 percent replant payment to one insured in a share arrangement. Future Meetings. There was general consensus that this was a good time of the year to have this type of meeting. It allows the insurance providers the opportunity to participate in actuarial and data system planning and decisions. We plan to continue hosting a DP Managers' Meeting in late January/early February and another meeting in the summer. Feedback and alternatives are requested on scheduling the summer meeting; comments received to date are evenly split between early June and late July/early August. A June meeting would allow comments on the final version of the M-13 prior to release and a July/August meeting would facilitate discussion of implementation problems before the year's data transmission starts. Comments. DP Managers and/or other representatives should provide written comments on the outstanding issues raised in this memo by COB March 15, 1996, to Seavey Anthony.