[Federal Register Volume 61, Number 128 (Tuesday, July 2, 1996)]
[Rules and Regulations]
[Pages 34367-34368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16794]



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 Rules and Regulations
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  Federal Register / Vol. 61, No. 128 / Tuesday, July 2, 1996 / Rules 
and Regulations  

[[Page 34367]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 400


General Administration Regulations; Reinsurance Agreement--
Standards for Approval

AGENCY: Federal Crop Insurance Corporation.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Federal Crop Insurance Corporation (FCIC) amends its 
General Administrative Regulations by revising Sec. 400.168. This 
amendment is intended to bring Sec. 400.168 into conformance with the 
Federal Agriculture Improvement and Reform Act of 1996 (1996 Act) by 
clarifying the obligations of the reinsured companies with respect to 
the sale and service of the catastrophic risk protection (CAT) plan of 
insurance in those States, or portions of a State, where the Secretary 
of Agriculture has determined that there are, or are not, sufficient 
insurance agents and other personnel available to service CAT 
policyholders.

EFFECTIVE DATE: June 27, 1996.

FOR FURTHER INFORMATION CONTACT:
Diana Moslak, Account Executive, Risk Management Agency, Insurance 
Services Division, Reinsurance Services Liaison Branch, United States 
Department of Agriculture (USDA), Washington, D.C. 20250, telephone 
(202) 720-2832.

SUPPLEMENTARY INFORMATION: Pursuant to section 161(d) of the 1996 Act, 
this rule is issued without regard to (1) the notice and comment 
provisions of section 553 of Title 5, United States Code,
    (1) the notice and comment provisions of section 553 of Title 5, 
United States Code,
    (2) the Statement of Policy of the Secretary of Agriculture (36 FR 
13804) relating to notice of proposed rulemaking and public 
participation in rulemaking, and
    (3) the Paperwork Reduction Act of 1995, (44 U.S.C., chapter 35) 
notice and comment requirements.

Executive Order 12866 and Departmental Regulation 1512-1

    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).

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and private sector. Under section 202 of the UMRA, FCIC 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with Federal mandates that may 
result in expenditures of State, local, or tribal governments, in the 
aggregate, or to the private sector, of $100 million or more in any one 
year. When such a statement is needed for a rule, section 205 of the 
UMRA generally requires FCIC to identify and consider a reasonable 
number of regulatory alternatives and adopt the least costly, more 
cost-effective or least burdensome alternative that achieves the 
objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the UMRA) for State, local, and tribal 
governments or the private sector. Thus, the rule is not subject to the 
requirements of section 202 and 205 of the UMRA. Executive Order No. 
12612.
    It has been determined under section 6(a) of Executive Order No. 
12612, Federalism, that this rule does not have sufficient Federalism 
implications to warrant the preparation of a Federalism Assessment. The 
provisions 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.

Regulatory Flexibility Act

    This regulation will not have a significant impact on a substantial 
number of small entities. This action does not increase the burden on 
the reinsured company because this action merely clarifies the 
obligations of participating insurance companies in providing for the 
delivery of catastrophic risk protection policies through approved 
private insurance providers consistent with the legislative requirement 
of the 1996 Act to foster a single delivery system. Although this 
action will require approved insurance providers to accept all eligible 
applicants for all plans of insurance in all counties within a State 
(or a portion of State) where it is determined that there is a 
sufficient number of active agents reasonably accessible to producers, 
the benefits in terms of greater underwriting capacity for the private 
sector will outweigh any increased underwriting risks associated with a 
single delivery system. Therefore, this action is determined to be 
exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 
Sec. 605) and no Regulatory Flexibility Analysis was prepared.

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order No. 12372

    This program is not subject to the provision of Executive Order No. 
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.

Executive Order No. 12778

    The Office of the General Counsel has determined that these 
regulations meet the applicable standards provided in sections 2(a) and 
2(b)(2) of Executive Order No. 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

[[Page 34368]]

contained in these regulations and the appeal provisions promulgated by 
the Board of Contract Appeals, 7 CFR part 24, subtitle A, must be 
exhausted before any action for judicial review may be brought.

Environmental Evaluation

    This action is not expected to have a significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review Initiative to eliminate unnecessary or duplicative 
regulations and improve those that remain in force.

Background

    Prior to enactment of the 1996 Act, CAT coverage was offered 
through approved insurance providers and through local offices of the 
Farm Service Agency, USDA on a nationwide basis. The 1996 Act amended 
the Federal Crop Insurance Act to require the USDA to phase in a single 
delivery of CAT coverage unless the Secretary of Agriculture determines 
that the number of private insurers in a State (or a portion of a 
State) is insufficient to provide the coverage. In response to the 
legislative elimination of the delivery of CAT through county Farm 
Service Agency offices, except in those areas where there are 
insufficient approved private insurance providers to provide CAT 
coverage to producers, FCIC must amend this regulation to update and 
clarify the obligations of participating insurance companies.

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. Sec. 1501 et seq.), the Federal Crop 
Insurance Corporation hereby amends General Administrative Regulations, 
7 CFR part 400, subpart L, effective for the 1997 and succeeding 
reinsurance years, as follows:

PART 400--GENERAL ADMINISTRATIVE REGULATIONS

Subpart L--Reinsurance Agreement--Standards for Approval; 
Regulations for the 1997 and Subsequent Reinsurance Years

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

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

    2. Paragraphs (b) and (c) of Sec. 400.168 are revised to read as 
follows:


Sec. 400.168   Obligations of participating insurance company.

 * * * * *
    (b) The Company shall make available to all eligible producers in 
the areas designated in its plan of operations as approved by the 
Corporation:
    (1) The crop insurance plans for the crops designated in its plan 
of operation in those counties within a State, or a portion of a State, 
where the Secretary of Agriculture has determined that insurance is 
available through local offices of the United States Department of 
Agriculture; and
    (2) Catastrophic risk protection, limited, and additional coverage 
plans of insurance for all crops, for which such insurance is made 
available by the Corporation, in all counties within a state, or a 
portion of State, where the Secretary of Agriculture has determined 
that insurance is no longer available through local offices of the 
United States Department of Agriculture.
    (c) The Company shall provide the Corporation, on forms approved by 
the Corporation all information that the Corporation may deem relevant 
in the administration of the Agreement, including a list of all 
applicants determined to be ineligible for crop insurance coverage in 
accordance with subpart U of part 400 and all insured producers 
cancelled or terminated from insurance, along with the reason for such 
action, the crop program, and the amount of coverage for each.
 * * * * *
    Signed in Washington, D.C., on June 26, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-16794 Filed 6-27-96; 12:36 pm]
BILLING CODE 3410-FA-M