TO:    	  All Reinsured Companies
          All Risk Management Field Offices
          All Other Interested Parties

FROM:     Kenneth D. Ackerman /s/ Robert J. Prchal          2-10-99   

SUBJECT:  Emergency Financial Assistance to Farmers


In follow up to MGR-99-002.1 Action item A, the following guidelines are 
provided to address implementation provisions for the crop insurance premium 
incentive discount (premium discount) resulting from the Emergency Financial 


     A.   Crop Insurance Premium Incentive Discount (Premium Discount)

          1.   Billing  -- For crops with billing dates after February 1, 1999, companies will
          deduct the estimated 30 percent premium discount from the producer premium on
          the billing statement.  The following language must be included to notify producers
          of the additional reduction in premium:

          "Your premium has been reduced by an estimated 30 percent, resulting from funds
          made available by USDA for Emergency Financial Assistance."

 	      For crops that have already been billed and in which payment has been received by
          the company, the estimated 30 percent discount must be calculated and 
	      refunded to the producer no later than April 1, 1999.  Risk Managment Agency
          (RMA) recommends that companies provide an enclosure with the refund check
          stating the reason for the refund.  Similar language, as stated above, may be used
          in this notification.

               2.   Premium Discounts and Loss Processing  -- By not later than March 1, 1999,
          Claims for Indemnity should be applied against the producer premium after
          reductions for any applicable premium discount, prior to issuance of any indemnity
          check to the producer.  Companies should follow the refund process mentioned
          above if producer premium, without reduction of any applicable discount, was
          deducted and retained by the company for losses processed prior to March 1,

               3 .  Data Processing  --  The Data Acceptance System (DAS) is being modified in
          accordance with the draft Manual 13 slip sheets issued January 22, 1999.  Exhibit
          11-10 of the draft slipsheets contains an additional step for determining producer
          premium to include reduction for premium discounts.  This allows the Reinsurance
          Accounting System to continue recognizing the "Producer Premium" amount as
          premium due from the reinsured company.  Reinsured companies must only collect
          and report to DAS this adjusted "Producer Premium" amount.  Reinsured
          companies may begin submitting data with producer premium reflecting applicable
          premium discount amounts on March 1, 1999.  However, through the April
          accounting cutoff, reinsured companies may continue to submit data to DAS
          utilizing the previous record formats without being rejected.

DISPOSAL:   This bulletin is effective until December 31, 1999.