[Federal Register Volume 60, Number 83 (Monday, May 1, 1995)]
[Rules and Regulations]
[Pages 21035-21036]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-10466]



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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation

7 CFR Part 400


General Administrative Regulations; Reinsurance Agreement--
Standards for Approval

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Interim rule.

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SUMMARY: The Federal Crop Insurance Corporation (``FCIC'') hereby 
amends its General Administrative Regulations, 7 CFR part 400, by 
revising the Disputes clause, located at section 400.169. The intended 
effect of this rule is to provide reinsured companies with an informal 
reconsideration process through an administrative officer of FCIC and 
the right to appeal the administrative officer's administrative 
determination to the Board of Contract Appeals.

DATES: This rule is effective May 1, 1995. Written comments, data, and 
opinions on this rule will be accepted until close of business June 30, 
1995 and will be considered when the rule is to be made final.

ADDRESSES: Written comments, data, and opinion on this interim rule 
should be sent to Diana Moslak, Regulatory and Procedural Development 
Staff, Federal Crop Insurance Corporation, USDA, Washington, D.C. 
20250. Hand or messenger delivery should be made to Suite 500, 2101 L 
Street, N.W., Washington, D.C. Written comments will be available for 
public inspection and copying in the Office of the Manager, 2101 L 
Street, N.W., 5th Floor, Washington, D.C., during regular business 
hours, Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Federal Crop Insurance Corporation, 
U.S. Department of Agriculture, Washington, D.C. 20250. Telephone (202) 
254-8314.

SUPPLEMENTARY INFORMATION: As a result of the Departmental 
reorganization mandated by the Department of Agriculture Reorganization 
Act of 1994, FCIC must amend its dispute provisions to provide 
reinsured companies with a mechanism to request reconsideration or 
appeal of adverse decisions determined by FCIC.
    This action has been reviewed under United States Department of 
Agriculture (``USDA'') procedures established by Executive Order 12866 
and Departmental Regulation 1512-1. This action constitutes a review as 
to the need, currency, clarity, and effectiveness of these regulations 
under those procedures. The sunset review date established for these 
regulations is March 31, 1999.
    This rule has been determined to be ``not significant'' for the 
purposes of Executive Order 12866, and therefore, has not been reviewed 
by the Office of Management and Budget (``OMB'').
    This rule does not contain information collection requirements that 
require approval by OMB under the Paperwork Reduction Act of 1980 (44 
U.S.C. 3501 et seq.).
    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment. The 
policies and procedures contained in this rule will not have a 
substantial direct effect on states or their political subdivisions, or 
on the distribution of power and responsibilities among the various 
levels of government.
    Under the Regulatory Flexibility Act (5 U.S.C. 605), this 
regulation will not have a significant impact on a substantial number 
of small entities. This action does not increase the paperwork burden 
on the reinsured company because this action only changes the mechanism 
in which to submit disputed reinsurance issues. Therefore, this action 
is determined to be exempt from the provisions of the Regulatory 
Flexibility Act and no Regulatory Flexibility Analysis was prepared.
    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.
    This program is not subject to the provisions of Executive Order 
12372 which require intergovernmental consultation with state and local 
officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.
    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in subsections 
(2)(a) and 2(b)(2) of Executive Order 12778. The provisions of this 
rule will preempt state and local laws to the extent such state and 
local laws are inconsistent herewith. The administrative appeal 
provisions located at 7 CFR part 400, subpart J and the appeal 
provisions promulgated by the Board of Contract Appeals, 7 CFR part 24, 
subtitle A, must be exhausted before judicial action may be brought.
    This action is not expected to have any significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.
    This interim rule provides a new avenue of appeal for reinsured 
companies now that FCIC no longer has hearing officers to conduct these 
appeals. At present, there is no body authorized to hear these appeals. 
Therefore, it is impractical and contrary to the public interest to 
publish this rule for notice and comment prior to making the rule 
effective. However, comments are solicited for 60 days after the date 
of publication in the Federal Register and will be considered by FCIC 
before this rule is made final.

Background

    Prior to enactment of the Department of Agriculture Reorganization 
Act of 1994, reinsured companies were afforded the opportunity for an 
informal hearing to appeal final determinations made by FCIC. The 
authority to hear these appeals was delegated to FCIC hearing officers. 
If the reinsured company was dissatisfied with the determination of the 
hearing officer, its only recourse was to the courts. Since the 
Standard Reinsurance Agreement is not a program agreement but instead 
an agreement for delivery of the program, it is an action to be handled 
by the [[Page 21036]] Agency Board of Contract Appeals rather than a 
program matter within the jurisdiction of the National Appeals 
Division. If the reinsured company is now dissatisfied with a 
determination under a reinsurance agreement with FCIC it may now 
request the Director of Insurance Services to render a final 
administrative determination on the dispute. If the reinsured company 
is dissatisfied with a determination as a result of a compliance review 
finding, it may request the Director of Compliance to render a final 
administrative determination on the dispute. Such final administrative 
determination by the Director of Insurance Services or Director of 
Compliance will be appealable to the United States Department of 
Agriculture Board of Contract Appeals.

List of Subjects in 7 CFR Part 400

    Crop insurance.

Final Rule

    Pursuant to the authority contained in the Federal Crop Insurance 
Act, as amended (7 U.S.C. 1501 et seq.), the Federal Crop Insurance 
Corporation hereby amends 7 CFR part 400, subpart L to read as follows:

PART 400--[AMENDED]

    1. The authority citation for 7 CFR part 400, subpart L, is revised 
to read as follows:

    Authority: 7 U.S.C. 1506(l).

    2. Section 400.169 is revised to read as follows:


Sec. 400.169  Disputes.

    (a) If the company believes that the Corporation has taken an 
action that is not in accordance with the provisions of the Standard 
Reinsurance Agreement or any reinsurance agreement with FCIC, except 
compliance issues, it may within 45 days after receipt of such 
determination, request, in writing, the Director of Insurance Services 
to make a final administrative determination addressing the disputed 
issue. The Director of Insurance Services will render the final 
administrative determination of the Corporation with respect to the 
applicable issues.
    (b) If the company believes that the Corporation's compliance 
review findings are not in accordance with the applicable laws, 
regulations, custom or practice of the insurance industry, or FCIC 
approved policy and procedure, it may within 45 days after receipt of 
such determination, request, in writing, the Director of Compliance to 
make a final administrative determination addressing the disputed 
issue. The Director of Compliance will render the final administrative 
determination of the Corporation with respect to these issues.
    (c) A company may also request reconsideration by the Director of 
Insurance Services of a decision of the Corporation rendered under any 
Corporation bulletin or directive which bulletin or directive does not 
affect, interpret, explain, or restrict the terms of the reinsurance 
agreement. The company, if it disputes the Corporation's determination, 
must request a reconsideraiton of that determination in writing, within 
45 days of the receipt of the determination. The determinations of the 
Director will be final and binding on the company. Such determinations 
will not be appealable to the Board of Contract Appeals.
    (d) Appealable final administrative determinations of the 
Corporation under Sec. 400.169 (a) or (b) may be appealed to the Board 
of Contract Appeals in accordance with the provisions of part 24 of 
title 7, subtitle A, of the Code of Federal Regulations, 7 CFR part 24.

    Done in Washington, D.C., on April 20, 1995.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 95-10466 Filed 4-28-95; 8:45 am]
BILLING CODE 3410-08-P