INFORMATIONAL MEMORANDUM: R&D-96-046

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

FROM:    Tim B. Witt   /s/
         Director      8/20/96
         Research and Development Division

SUBJECT: Issuance of the 1997 FCIC 18100 Catastrophic Risk Protection 
         Handbook

BACKGROUND:

For the 1997 crop year, changes have been made to underwriting, 
administrative, and Actual Production History (APH) procedures/calculations 
for the Federal crop insurance program. The Federal Crop Insurance 
Corporation (FCIC) is transmitting these changes for catastrophic coverage 
via the 1997 FCIC 18100 Catastrophic Risk Protection Handbook (CAT).  The 
same changes were made, as applicable, to the FCIC 18010 Crop Insurance 
Handbook (CIH)Handbook, issued July 1996.


Summary of Changes:

Section 4

Removes Highly Erodible Land (HEL) and Wetland Conservation (WC) compliance 
verification requirements.

Clarifies that insurance cannot be obtained after the crop's sales closing 
date unless the crop is a substitute crop.

Authorizes removal of acreage from the acreage report that is eligible for a 
reduced premium rate (short rate) when a short rate is provided by actuarial 
table.

Clarifies that fall seeded wheat does not have a late planting period.

Section 5

Outlines that program yields for crop insurance purposes will be taken from 
the Farm Service Agency (FSA)-423.

Authorizes insurance providers to determine approved APH yields for 
blueberries in Michigan.

Removes the use of cups or caps when the program yield and/or Transitional 
Yield ("T" Yield) changes by 10 percent or more when "T" yields are used in 
the approved APH yield calculation.

Implements the use of simple average program yields to determine "T" Yields 
if more than one FSA farm serial number is contained in a unit.

Pilot county "T" Yield procedures (110 percent "T" Yield) are continued for 
the 1997 crop year.

Clarifies the acres and production to be used for APH purposes when acreage 
is bypassed/unharvested.

Updates sugarcane instructions to determine pounds of raw sugar used for APH.

For perennial crop acreage tolerance review purposes, a new inspection is not 
required if the latest field inspection is not more than 5 years old.

Exhibit 16

Modifies the Producer's Pre-acceptance Worksheet procedures by requiring the 
insurance provider to obtain the required information, perform an inspection,
or deny coverage if the worksheet is not completed in an acceptable manner by 
the insured.

Clarifies that perennial crop approved APH yields will be calculated using 
total production and total acres if separate block production is not 
certified.  Updates several examples to more clearly illustrate these 
requirements.

Adds blueberries in Michigan to the APH instructions.

Exhibit 17

A chart has been added that illustrates FSA rules for skip-row planting 
patterns.

Exhibit 30

Quality control guidelines removed.  

Exhibit 33

Added irrigated practice guidelines for correctly reporting acreage insured 
under an irrigated practice.
     
Exhibit 36

Charts have been added to clarify added land/practice/type/variety procedures.

For determined irrigated yields, bases irrigated "T" Yield reference factors 
on the years of actual yields contained in the reference unit's database.

Exhibits 39-51:

These Exhibits are optional for Insurance Companies that are currently using 
other FCIC approved forms and procedures.

ACTION:
                                 
Attached is the approved 1997 FCIC 18100 Catastrophic Risk Protection 
Handbook.  It is to be used in the administration of catastrophic risk 
protection coverage policies for the 1997 crop year.  Changes, additions, or 
corrections to the text are shaded to aid in identifying the changes.  

The CAT Handbook will be placed on the Reporting Organization Server in 
WordPerfect 5.1 and WordPerfect 6.1.  An informational memorandum from the 
Actuarial Branch will announce when it is available.  If you do not have 
access to the Reporting Organization Server, a set of disks containing the 
CAT Handbook is available in WordPerfect 5.1 or WordPerfect 6.1 upon request.  
The electronic version of the 1997 FCIC 18010 CIH (released August 8, 1996) 
has been updated to include the New Producer Pilot County procedure that was 
approved after the hard copy was distributed.  The 1997 CIH slipsheets will 
be issued in the near future.  If you have any questions about the CAT 
Handbook, please contact the Product Development Branch at (816) 926-7743.

Attachment - will follow in the mail.