Watts and Associates, Inc. (Watts), the developers of the Pulse Crop Revenue plan of insurance, advised the Federal Crop Insurance Corporation (FCIC) Board of Directors (Board) of their intent to maintain the Pulse Crop Revenue plan of insurance and charge a user fee to approved insurance providers (AIP) selling the plan. Section 522(b)(4)(C) of the Federal Crop Insurance Act (Act) allows submitters to maintain approved 508(h) products and charge a user fee to approved insurance providers (AIP) that elect to sell the policy.

Section 522(b)(4)(D)(ii) of the Act and 7 C.F.R. 400.712(l)(5) provide that the Board will determine the reasonableness and approve the amount of user fee that is payable to the applicant by the AIP. The user fee is owed by the AIP and cannot be passed on to producers as an increase in premium or an administrative charge.

On November 17, 2016, the Board approved a user fee in the amount of $13 per policy earning premium, not to exceed a total annual amount of $75,000 for all policies covered under the Pulse Crop Revenue plan of insurance beginning with the 2017 insurance year. The Board will review the user fee in future years to ensure that the amount is representative of the maintenance costs for the product.

The regulation provides that it is Watts’ responsibility to collect the fees from AIPs, and indebtedness for such fees must be resolved by Watts and the AIP. Upon request, FCIC may provide the number of policies sold by each AIP to Watts.

If you have any questions regarding the user fees, please contact the Deputy Administrator at deputyadministrator@rma.usda.gov.