RMA APPROVES PREMIUM DISCOUNT PLAN
WASHINGTON, Feb 13, 2004 - USDA's Risk Management Agency (RMA) approved Occidental Fire & Casualty Company of North Carolina (OFC), an approved insurance provider, to offer through their Managing General Agent (MGA) Crop 1 Insurance Direct (Crop 1) a Premium Discount Plan (PDP) to producers of all crops in 13 states (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Texas, and Wisconsin) for the 2004 reinsurance year.
In section 508(e)(3) of the Federal Crop Insurance Act (Act), Congress states:
- "Premium Reduction. -- If an approved insurance provider determines that the provider may provide insurance more efficiently than the expense reimbursement amount established by the Corporation, the approved insurance provider may reduce, subject to the approval of the Corporation, the premium charged the insured by an amount corresponding to the efficiency. The approved insurance provider shall apply to the Corporation for authority to reduce the premium before making such a reduction, and the reduction shall be subject to the rules, limitations, and procedures established by the Corporation."
The Federal Crop Insurance Corporation Board of Directors (FCIC Board) established a list of rules, limitations, and procedures that are identified in Board Memorandum No. 694 and RMA published procedures for submitting premium reduction plans, which are identified in Managers Bulletin MGR-03-008, that govern the submission and approval of such plans for all submitters. RMA conducted extensive reviews of OFC's submission and concluded that it met the above-mentioned requirements.