USDA ANNOUNCES PLANS TO BOOST INSURANCE PROGRAM'S INTEGRITY

Contact: Eric Edgington (202) 690-2539
Eric.Edgington@rma.fsa.usda.gov

WASHINGTON, Jun 30, 1999 - Risk Management Agency (RMA) Administrator Ken Ackerman announced today several decisive actions to address concerns associated with the marketing of CRCPlus™, which was developed and is marketed by the crop division of Acceptance Insurance Companies, Inc.

Although CRCPlus™ is not subsidized, reinsured, or regulated by the Federal Crop Insurance Corporation (FCIC) or USDA, the sales of the policy adversely affected the market for Crop Revenue Coverage (CRC), which is both subsidized and reinsured by FCIC. Under the agreement, Acceptance will:

• Establish and administer a $1 million research and education fund to benefit rice producers in affected areas;
• Submit a strengthened system of additional management and oversight to RMA for approval;
• Pay FCIC approximately $1.2 million based on a percent of the net affected premium under the terms of the Standard Reinsurance Agreement.

"Maintaining program integrity and a high level of service to farmers are priorities," said Ackerman. "That's why we fought for a law to give producers with CRCPlus™ additional time to change their coverage and why we are announcing additional corrective actions. These steps will resolve the oversight issues that arose between the company and RMA. By taking quick remedial action, Acceptance has helped us restore producer confidence in the integrity of the crop insurance program."