INFORMATIONAL MEMORANDUM: R&D-97-051 TO: All Reinsured Companies All Risk Management Field Offices FROM: Tim B. Witt Deputy Administrator SUBJECT: Issuance of the 1998 FCIC 18010 Crop Insurance Handbook BACKGROUND: For the 1998 crop year, only one handbook covering underwriting, administrative, and actual production history (APH) procedure for the Federal crop insurance program will be issued, the FCIC 18010 Crop Insurance Handbook (CIH). The FCIC 18100 Catastrophic Risk Protection (CAT) Handbook has been discontinued and CAT coverage procedures have been incorporated into the CIH. The crop provisions for several crops, as well as regulations affecting preventing planting and the basic policy provisions, are still being cleared through the regulatory process for the 1998 crop year. This handbook does not address such proposed regulatory changes if they were not published as final rule by July 2, 1997. Any remaining procedural changes for the 1998 crop year which result from pending regulatory action will be implemented through a Research and Development Division Informational Memorandum or CIH amendments. Consolidation of the two handbooks and the formatting changes have required considerable restructuring and rewriting of the text. Procedure from some of the exhibits has been moved into applicable sections. Since much of the handbook is restructured, only actual changes to procedure, new procedure, or additions to the existing procedure for clarification purposes have been shaded (e.g., changes in numbering, language, etc., are not shaded when the procedure remains the same). The following is a summary of the more significant changes: Section 3, Definitions A separate section was created for terms and definitions. Section 4, General Rules Rounding rules were moved from Exhibit 7 to Section 4. The premium adjustment table was moved from Exhibit 26 to Section 4. A five-digit unit numbering system is being implemented consistent with Manual 13. Denotes a change from the previous year's procedure. Procedures for written unit agreement requests (previously contained in Exhibit 30) and the written agreement chart (previously contained in Exhibit 11) have been moved to Section 4. Section 5, Underwriting and Actual Production History (APH) Responsibilities A separate "responsibilities" section was created. Section 6, Category B APH Crop Procedure Procedure for Category B APH crops (annual crops) is contained in this section. Incorporated instructions for switching from Transitional ("T") Yields based on Farm Service Agency (FSA) program yields to Risk Management Agency ( (RMA) county "T" Yields published on county actuarial tables. - Current "T" Yields (program yield based) will not be "grandfathered." They must be replaced with the applicable (variable) RMA county "T" Yields. - Cups and caps will apply if units are not combined or further divided (compared to last year's unit structure) and the practice, type, or variety remains the same. - In counties where the county "T" Yield is apportioned between different "T" Yield map areas, a unit that now contains more than one "T" Yield map area will have APH yields determined separately for each map area. Section 7, Category C APH Crop Procedure Procedure for Category C APH crops (perennial crops) is contained in this section. Procedure for pre-acceptance inspections, Producer's Pre-Acceptance Worksheets, Block Production Worksheets, and Unit Summary Worksheets (from Exhibit 16) were moved to Section 7. The number of pre-acceptance field inspections required by FCIC has been reduced. Acreage tolerance pre-acceptance field inspections are no longer required and FCIC Regional Service Offices have been given additional authority to waive pre-acceptance inspections. Section 8, Other Coverage Plans Multiple peril coverage plans that are not considered "APH based" are now coveredseparately in this section. Sections 9-14 These sections were renumbered because previous sections were divided into new sections. Exhibit 1, Crop Policy Chart Updated policy information and form number of policies that have been published as final rule in the Federal Register. Exhibit 5, CAT Worksheets CAT Worksheets were moved from the 1997 CAT Handbook to the CIH. Exhibit 6, Master Yields Clarified Operator/Tenant requirements. Exhibit 7, Waiver for Administrative Fees The form was moved from the 1997 CAT Handbook to the CIH. Exhibit 11, Request for Actuarial Change Forms A Request for Actuarial Change form was added to the CIH. Exhibit 16 Moved the Producer's Pre-Acceptance Worksheet, Pre-Acceptance Perennial Crop Inspection Report, Block Production Worksheet, and Unit Summary Worksheet and respective instructions to Section 7. Added the Florida Citrus Grove Producer Pre-Acceptance or Inspection Report form and related instructions to Exhibit 16. This form and its instructions will be effective beginning with the 1999 crop year. Exhibit 26, Retaining APH History Procedure moved from the 1997 CAT Handbook to the CIH. Exhibit 37, Added Land, Added Practice/Type/Variety (P/T/V) Allows an Insurance Provider to use added land/P/T/V procedures (if applicable) when requested by the insured no later than the acreage reporting date. ACTION: Attached is the approved 1998 FCIC 18010 CIH. It will be used in the administration of CAT, limited, and additional coverage plans for the 1998 crop year. Changes, additions, or clarifications to last year's procedures are shaded to aid in identifying the changes. The CIH will be placed on the Reporting Organization Server in WordPerfect 6.1. An informational memorandum from the Actuarial Division will announce when it is available. If you do not have access to the Reporting Organization Server, a set of disks containing the CIH is available in WordPerfect 6.1 upon request. If you have any questions or would like to request the handbook on WordPerfect disks, please contact the Product Development Division at (816)926-7743. Attachment