INFORMATIONAL MEMORANDUM: R&D-96-039

TO:       All Reinsured Companies
          All Risk Management Agency Field Offices
         
FROM:     Tim B. Witt       /s/ Roberta E.  Waggoner (for)
          Director
          Research and Development Division

SUBJECT:  1996 Crop Revenue Coverage (CRC) - Early Loss Payments


BACKGROUND:

Questions have been raised concerning payments on early Crop Revenue Coverage 
(CRC) corn and soybean losses.  These policies are silent on this matter; 
however, 1997 CRC Wheat Underwriting Rules, Section 9, dated June 18, 1996, 
on the Reporting Organization (RO) Server state:
 
"If the harvest guarantee is not known at the time the loss is determined, 
then payable losses will be paid in two segments."   Refer to Section 9 for 
specific details.

ACTION:

Research and Development Division will modify the Data Acceptance System to 
allow reinsured companies to process 1996 CRC corn and soybean losses 
consistent with the 1997 CRC Wheat Underwriting Rules (Section 9).   For CRC 
losses that are reported at a time when the harvest guarantee is not known, 
reinsured companies may choose to process the loss (a record type 21) based 
on the spring market price to include the indemnity for loss of production.  
If the published harvest market price for corn and soybeans is greater than 
the spring market price, reinsured companies may subsequently process the 
same record (record type 21) to include the added indemnity due to the price 
change.