INFORMATIONAL MEMORANDUM: R&D-97-031
     
TO:      All Reinsured Companies
         All Risk Management Field Offices
         FSA Headquarters, Program Delivery and Field Operations
     
FROM:    Tim B. Witt        /S/ ROBERTA E. WAGGONER (for)
         Deputy Administrator
     
SUBJECT: 1997 Dry Bean Questions and Answers
     
BACKGROUND:
     
The new dry bean policy (97024) in effect for the 1997 crop year allows
insureds to select a price election or varying percentages of the
maximum price offered for each type.  The selection of price elections
must be made by the sales closing date.  This feature of the new policy
has generated questions that are answered by this memorandum.  Insurance
providers should provide this information to sales agents and claims
adjustment personnel.
     
1. Question - How are administrative fees determined when limited
   coverage (65 percent coverage level at less than 100 percent of the
   maximum price election) is selected for one dry bean type and
   additional coverage (no less than the 65 percent coverage level at
   100 percent of the maximum price election) is selected for another
   type?
     
   Answer - If an insured selects prices that result in both limited and
   additional coverage on the same contract, a $50 administrative fee
   will be due.
     
2. Question - What price election will apply if an insured plants a type
   of dry bean that was not originally intended to be planted and no
   price election was selected for the type by the sales closing date? 
   For example, the insured selects 80 percent of the maximum price
   election for navy beans, and 70 percent of the maximum price election
   for dark red kidney beans; however, the insured plants large lima
   beans instead of the dark red kidneys.
     
   Answer - If an insured plants a dry bean type for which a price
   election was not chosen by the sales closing date, the price election
   for that type cannot exceed the largest percentage (whether chosen by
   the insured or the ratio of the chosen price to the maximum price
   election for any other type) that applies to the insurance contract
   for the crop year when the acreage report is timely filed.   For the
   above example, the insured would be limited to 80 percent of the
   maximum price election for any insurable dry bean type.