July 31, 1998 INFORMATIONAL MEMORANDUM: R&D-98-035 TO: All Reinsured Companies All Risk Management Field Offices FROM: Tim B. Witt /S/ R. E. Waggoner Deputy Administrator SUBJECT: Issuance of Slipsheets to Update the 1998 FCIC 18010 Crop Insurance Handbook (CIH) for the 1999 Crop Year BACKGROUND: Since there are a few significant changes for the 1999 crop year, the Risk Management Agency (RMA) is transmitting these changes which apply to Catastrophic Risk Protection (CAT), limited and additional coverage via 1998 FCIC 18010-02 slipsheets. The 1998 FCIC 18010 with slipsheets dated January 1998 (FCIC 18010-01) and July 1998 FCIC 18010-02 will apply for the 1999 crop year. The crop provisions for several crops, as well as regulations affecting prevented planting and the basic policy provisions, are still being cleared through the regulatory process for the 1999 crop year. This handbook does not address such proposed regulatory changes. Any remaining procedural changes for the 1999 crop year which result from pending regulatory action will be implemented through a Research and Development Informational Memorandum or Crop Insurance Handbook (CIH) amendments. SUMMARY OF PROCEDURAL CHANGES: Many of the changes match the policy provisions in effect for the 1999 crop year such as the reduction in the CAT price percentage from 60 to 55 percent. In order to reduce the number of replacement pages, some of the changes such as new crop names, options to endorsements, and deletion of Nonstandard Classification (NCS) references are not slipsheeted but are listed here for reference. OLD NAMES NEW NAMES Apple options Canning & Processing Beans Canola Peas Potatoes Potato options Canning & Freezing Sweet Corn Canning & Processing Tomatoes Apple endorsements Processing Beans Canola/Rapeseed Dry Peas & Green Peas Northern & Central/Southern Potatoes Northern Potato endorsements Processing Sweet Corn Processing Tomatoes Page NCS Reference No Longer Valid Page NCS Reference No Longer Valid 60 86 88-91 94 99 105-6 4G(4) 5A(17) 5B(8), C(10)(a)1, D(6)-(10), (12) 6C 6E(1)(b)2 6I(6)(a) 146 159 195-7 236-9 405-14 7H 7J(6)(a) 12B, D(1), E(7) Ex. 6: E(1) & (2), G(4)(a)2 Ex. 36: 1C(2)(a); charts D(1), D(2), E; 2A Example 1, 3 Crop year references and examples throughout the CIH have not been updated unless the page was being slipsheeted for another reason. Use the date in the header to determine whether or not the crop year references on a page are current. Changes 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 Definitions have been updated to agree with the changes to the Basic Provision, Crop Provisions, or Special Provisions. Section 4, General Rules Summerfallow date change in North Dakota and Montana to June 15. Updated the annual administrative fees for additional, limited, or CAT coverage. Added guidelines for insurance provider's application or contract change form to provide coverage for the insured crop(s) in ALL counties. CAT price election changed to 55 percent of the established/expected market price. Added procedure for late planting (LP) and prevented planting (PP) to reflect recent Basic Provision policy changes. Updated written agreement chart. Section 6, Category B APH Crop Procedure Discontinuation of 110 percent Pilot County Transitional ("T") Yields for new producers. Indicated yield limitations (cups and caps) do not apply the first year an insured is removed from NCS for Category B crops. Added procedure to indicate yield limitations do not apply if incorrect application of procedure is administered by insurance provider. Updated to include recent changes in the Central and Southern Potato Crop Provisions and Northern Potato Crop Provisions. Section 7, Category C APH Crop (Perennial Crops) Procedure Added if a crop has not produced the minimum production requirement and the insurance provider has agreed in writing (not a written agreement) to insure the acreage, the RMA Regional Service Office will determine and approve the APH yield. Section 8, Other Coverage Plans Changed CAT coverage for nursery to 55 percent of highest monthly market value for the rate classification X .90 at the 50 percent coverage level. Section 13, Nonstandard Classification System (NCS) NCS has been discontinued beginning with the 1999 crop year (2000 crop year for Texas and Arizona/California Citrus) for all crops. 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 6, Master Yields Added dry peas (Montana) to Master Yield List. Exhibit 15, Combining and Dividing Basic and Optional Units Added procedure for dividing a basic unit into optional units (for Category C Perennial Crops). ACTION: The slipsheets to the CIH will be placed on the Reporting Organization (RO) 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 RO 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. INFORMATIONAL MEMORANDUM: R&D-98-035 4 DISPOSAL: This Informational Memorandum is for the purpose of transmitting/updating information and the disposal date is December 31, 1998, for administrative tracking purposes. The Handbook with the updated slipsheets will remain in effect until superseded.