[Federal Register Volume 62, Number 10 (Wednesday, January 15, 1997)]
[Proposed Rules]
[Pages 2052-2055]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1016]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 400
RIN 0563-AB26
General Administrative Regulations; Collection and Storage of
Social Security Account Numbers and Employer Identification Numbers
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
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SUMMARY: The regulations contained in this subpart are issued pursuant
to the Federal Crop Insurance Act, as amended (FCIA) (7 U.S.C. 1501 et
seq.). The intended effect of this revision is to comply with the
statutory mandate that requires the collection of Social Security
Number (SSN) and Employer Identification Number (EIN) information of
participating agents, loss adjusters, and policyholders and to
establish the procedures to be used by the Federal Crop Insurance
Corporation (FCIC) and insurance providers in the collection, use, and
storage of documents containing SSN or EIN information.
DATES: Written comments, data, and opinions on this proposed rule will
be accepted until close of business March 17, 1997 and will be
considered when the rule is to be made final. The comment period for
information collections under the Paperwork Reduction Act of 1995
continues through March 17, 1997.
ADDRESSES: Written comments, data, and opinions on this proposed rule
should be sent to the Director, Product Development Division, Risk
Management Agency (RMA), United States Department of Agriculture
(USDA), 9435 Holmes Road, Kansas City, MO 64131, telephone (816) 926-
7730. Written comments will be available for public inspection and
copying in room 0324, South Building, USDA, 14th and Independence
Avenue, SW., Washington, DC., 8:15 a.m.--4:45 p.m., est, Monday through
Friday, except holidays.
FOR FURTHER INFORMATION CONTACT: For further information, contact Bill
Smith, Supervisory Insurance Management Specialist, Research and
Development, Product Development Division, RMA, at the Kansas City, MO
address listed above, telephone (816) 926-7743.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This action has been reviewed under USDA procedures established by
Executive Order 12866. This action constitutes a review as to the need,
currency, clarity, and effectiveness of these regulations under those
procedures.
This rule has been determined to be not significant for the
purposes of Executive Order 12866, and, therefore, has been reviewed by
the Office of Management and Budget (OMB).
Paperwork Reduction Act of 1995
The information collection requirements contained in these
regulations have been submitted to OMB for their approval under section
3507(j) of the Paperwork Reduction Act of 1995. This proposed rule will
amend the information collection requirements under OMB number 0563-
0047, through November 30, 1999. The FCIC will be amending the
information collection to adjust the estimated reporting hours and seek
a valid approval for 3 years under section 3507(d) of the Act.
Revised reporting estimates and requirements for usage of OMB
control number 0563-0047 will be submitted to OMB for approval under
the provisions of 44 U.S.C. chapter 35. Public comments are due by
March 17, 1997.
The title of this information collection is ``Social Security
Number (SSN) and Employer Identification Number (EIN) Reporting Form.''
Collection of the SSN and the EIN is required by section 506 of the
FCIA (7 U.S.C. 1506). The FCIA requires the collection of SSN and EIN
information of policyholders, participating agents, and loss adjusters
and sets forth the procedures to be used by FCIC and insurance
providers in the collection, use, and storage of documents containing
SSN and EIN information. The primary use of the SSN and EIN under this
proposed rule will be to correctly identify the participant, and any
other person with an interest in the policyholder's operation of at
least 10%, as a policyholder within the systems maintained by FCIC.
The information requested is necessary to for the insurance
providers and FCIC to provide insurance and reinsurance, determine
eligibility, determine the correct parties to the agreement or
contract, determine and collect premiums, and pay indemnities. Failure
to furnish this number will result in rejection of or substantial
reduction in any claim for indemnity, ineligibility for insurance, and
a unilateral determination of the amount of premium due.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to be 15 minutes per response.
Respondents: Policyholders and those with a substantial beneficial
interest in the policyholder or any person having any interest in the
policyholder and receiving separate benefits under another USDA program
as a direct result of such interest.
Estimated Number of Respondents: 2,032,800.
Estimated Number of Responses per Respondent: 1 per year.
Estimated Total Burden Hours: 508,200.
The comment period for information collections under the Paperwork
Reduction Act of 1995 continues on the following: (a) Whether the
proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information shall have practical utility; (b) the accuracy of the
agency's estimate of the burden of the proposed collection of
information; (c) ways to enhance the quality, utility, and clarity of
the information to be collected; and (d) ways to minimize the burden of
the collection of information on respondents, including through the use
of automated collection techniques or other forms of information
gathering technology.
Comments regarding paperwork reduction should be submitted to the
Desk Officer of Agriculture, Office of Information and Regulatory
Affairs,
[[Page 2053]]
Office of Management and Budget (OMB), Washington, D.C. 20503.
The Office of Management and Budget (OMB) is required to make a
decision concerning the collection of information contained in these
proposed regulations between 30 and 60 days after submission to OMB.
Therefore, a comment to OMB is best assured of having its full effect
if OMB receives it within 30 days of publication. This does not affect
the deadline for the public to comment on the proposed regulation.
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 the 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 to State, local, or tribal governments, in the
aggregate, or to the private sector, of $100 million or more in any 1
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 mandate (under the regulatory
provisions of Title II of the UMRA) for State, local, and tribal
governments or the private sector. Thus, this rule is not subject to
the requirements of sections 202 and 205 of the UMRA.
Executive Order 12612
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.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. The action does not increase the paperwork
burden on the insured producer or the reinsured company. The program is
strictly voluntary. This regulation requires only that the participant
provide the SSN or EIN. This regulation does not require or impose any
requirement on the delivery agent or company that is not already
required by the Privacy Act of 1974 (5 U.S.C. 552a). Therefore, this
action is determined to be exempt from the provisions of the Regulatory
Flexibility Act (5 U.S.C. 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 12372
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.
Executive Order 12778
The Office of General Counsel has determined that these regulations
meet the applicable standards provided in sections 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 published at 7 CFR part
11 must be exhausted before action for judicial review may be brought.
Environmental Evaluation
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.
Background
The Federal crop insurance program is delivered to producers
through local FSA offices and reinsured companies (insurance
providers). Section 506 of the FCIA requires producers, agents, and
loss adjusters to provide SSNs or EINs as a condition of eligibility to
participate in the Federal crop insurance program and for identifying
producers, agents, and loss adjusters who are high risk for actuarial
purposes. However, current regulations only require SSNs or EINs of
applicants, policyholders, and persons with a substantial beneficial
interest (SBI) in the policyholder. All relevant sections have been
revised to include agents and loss adjusters.
Further, this amendment revises for clarification the definitions
of ``applicant,'' ``authorized person,'' ``disposition of records,''
``FCIC,'' ``past officers and employees,'' ``policyholder,''
``retrieval of records,'' ``safeguards,'' ``storage,'' ``substantial
beneficial interest,'' and ``system of records,'' and adds definitions
for ``Act,'' ``FSA,'' ``insurance provider,'' and ``person.'' The
definitions of ``access,'' ``agency sales and service contractor,''
``ASCS,'' ``collection,'' ``FCI Act,'' ``government contract
employees,'' ``private insurance company,'' and ``restricted access''
have been deleted.
This statute also requires that any person with an SBI in a
policyholder, or who has any interest in the policyholder and will
receive separate benefits under another USDA program, to provide their
SSN or EIN and clarifies that any person using an EIN for an individual
policy must also provide that person's SSN as an SBI on that policy.
The amendment revises Sec. 400.403, Required System of Records, to
remove the 30 day implementation requirement, and revises section
400.406 to remove redundancies.
List of Subjects in 7 CFR Part 400
Crop insurance; General Administrative Regulations.
Proposed Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation hereby proposes to amend 7 CFR part 400,
subpart Q as follows:
PART 400--GENERAL ADMINISTRATIVE REGULATIONS
Subpart Q--Collection and Storage of Social Security Account
Numbers and Employer Identification Numbers
1. The authority citation for 7 CFR part 400, subpart Q, is revised
to read as follows:
Authority: 7 U.S.C. 1506(l) and 1506(p).
2. Sections 400.401 (a), (b)(1), (2), (3) and (4) are revised to
read as follows:
Sec. 400.401 Basis, purpose, and applicability.
(a) The regulations contained in this subpart are issued pursuant
to the Act to prescribe procedures for the collection, use, and
confidentiality of Social Security Numbers (SSN) and Employer
Identification Numbers (EIN) and related records.
(b) * * *
(1) All holders of crop insurance policies issued by FCIC under the
Act and sold and serviced by local FSA offices.
(2) All holders of crop insurance policies sold by insurance
providers and
[[Page 2054]]
all insurance providers, their contractors and subcontractors,
including past and present officers and employees of such companies,
their contractors and subcontractors.
(3) Any agent, general agent, or company, or any past or present
officer, employee, contractor or subcontractor of such agent, general
agent, or company under contract to FCIC or an insurance provider for
loss adjustment or any other purpose related to the crop insurance
programs insured or reinsured by FCIC; and
(4) All past and present officers, employees, elected officials,
contractors, and subcontractors of FCIC and FSA.
3. Section 400.402, is amended to remove all paragraph
designations; remove the definitions of ``access,'' ``agency sales and
service contractor,'' ``ASCS,'' ``collection,'' ``FCI Act,''
``government contract employees,'' ``private insurance company,'' and
``restricted access;'' revise the definitions of ``applicant,''
``authorized person,'' ``disposition of records,'' ``FCIC,'' ``past
officers and employees,'' ``policyholder,'' ``retrieval of records,''
``safeguards,'' ``storage,'' ``substantial beneficial interest,'' and
``system of records;'' and add the definitions of ``Act,'' ``FSA,''
``insurance provider,'' and ``person'' to read as follows:
Sec. 400.402 Definitions.
Act--The Federal Crop Insurance Act, as amended (7 U.S.C. 1501 et
seq.).
Applicant--A person who has submitted an application for crop
insurance coverage under the Act.
Authorized person--Any current or past officer, employee, elected
official, general agent, contractor, or loss adjuster of FCIC, the
insurance provider, or any other government agency whose duties require
access to administer the Act.
Disposition of records--The act of removing and disposing of
records containing a participant's SSN or EIN by FCIC, or the insurance
provider.
FCIC--The Federal Crop Insurance Corporation of the United States
Department of Agriculture or any successor agency.
FSA--The Farm Service Agency of the United States Department of
Agriculture or any successor agency.
Insurance provider--A private insurance company approved by FCIC,
or a local FSA office providing crop insurance coverage to producers
participating in any program administered under the Act.
Past officers and employees--Any officer or employee of FCIC or the
insurance provider who leaves the employ of FCIC or the insurance
provider subsequent to the effective date of this rule.
Person--An individual, partnership, association, corporation,
estate, trust, or other legal entity, and whenever applicable, a state,
political subdivision, or an agency of a state.
Policyholder--An applicant whose application for insurance under
the crop insurance program has been accepted by FCIC or the insurance
provider.
Retrieval of records--Retrieval of a person's records by that
person's SSN or EIN, or name.
Safeguards--Methods of security to be employed by FCIC or the
insurance provider to protect a participant's SSN or EIN from unlawful
disclosure and access.
* * * * *
Storage--The secured storing of records kept by FCIC or the
insurance provider on computer disks or drives, computer printouts,
magnetic tape, index cards, microfiche, microfilm, etc.
Substantial beneficial interest--Any person having an interest of
at least 10 percent in the applicant or policyholder.
System of records--Records established and maintained by FCIC or
the insurance provider containing SSN or EIN data, name, address, city
and State, applicable policy numbers, and other information related to
multiple peril crop insurance policies as required by FCIC, from which
information is retrieved by a personal identifier including, but not
limited to the SSN, EIN, or name.
4. Section 400.403 is revised to read as follows:
Sec. 400.403 Required system of records.
Insurance providers are required to implement a system of records
for obtaining, using, and storing documents containing SSN or EIN data
before they accept or receive any applications for insurance. This data
should include: name; address; city and state; SSN or EIN; and policy
numbers which have been used by FCIC or the insurance provider.
5. Section 400.404 is revised to read as follows:
Sec. 400.404 Policyholder responsibilities.
(a) The policyholder or applicant for crop insurance must provide a
correct SSN or EIN to FCIC or the insurance provider to be eligible for
insurance. The SSN or EIN will be used by FCIC and the insurance
provider in:
(1) Determining the correct parties to the agreement or contract;
(2) Collecting premiums or other amounts due FCIC or the insurance
provider;
(3) Determining the amount of indemnities;
(4) Establishing actuarial data on an individual policyholder
basis; and
(5) Determining eligibility for crop insurance program
participation or other United States Department of Agriculture
benefits.
(b) If the policyholder or applicant for crop insurance does not
provide the correct SSN or EIN on the application and other forms where
such SSN or EIN is required, FCIC or the reinsured company shall reject
the application.
(c) The policyholder or applicant is required to provide to FCIC or
the insurance provider, the name and SSN or EIN of any individual or
other entity:
(1) holding or acquiring a substantial beneficial interest in such
policyholder or applicant; or
(2) having any interest in the policyholder or applicant and
receiving separate benefits under another United States Department of
Agriculture program as a direct result of such interest.
(d) If a policyholder or applicant is using an EIN for a policy in
an individual person's name, the SSN of the policyholder or applicant
must also be provided.
Sec. 400.405 through 400.412 [Redesignated as Secs. 400.406 through
400.413]
6. Sections 400.405 through 400.412 are redesignated as sections
Secs. 400.406 through 400.413, respectively. The redesignations are as
follows:
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Old section New section
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400.405................................... 400.406
400.406................................... 400.407
400.407................................... 400.408
400.408................................... 400.409
400.409................................... 400.410
400.410................................... 400.411
400.411................................... 400.412
400.412................................... 400.413
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7. Section 400.405 is added to read as follows:
Sec. 400.405 Agent and loss adjuster responsibilities
(a) The agent or loss adjuster shall provide his or her correct SSN
to FCIC or the insurance provider, whichever is applicable, to be
eligible to participate in the crop insurance program. The SSN will be
used by FCIC and the insurance provider in establishing a database for
the purposes of:
(1) Identifying agents and loss adjusters on an individual basis;
(2) Evaluating agents and loss adjusters to determine level of
performance;
(3) Determining eligibility for program participation; and
[[Page 2055]]
(4) Collection of any amount which may be owed by the agent and
loss adjuster to the United States.
(b) If the loss adjuster contracting with FCIC to participate in
the crop insurance program does not provide the correct SSN on forms or
contracts where such SSN is required, the loss adjuster's contract will
be cancelled effective on the date of refusal and the loss adjuster
will be subject to suspension and debarment in accordance with the
suspension and debarment regulations of the United States Department of
Agriculture.
(c) If the agent or loss adjuster contracting with an insurance
provider, who is also a private insurance company, to participate in
the crop insurance program does not provide the correct SSN on forms or
contracts where such SSN is required, the premium subsidy payable under
the Standard Reinsurance Agreement, or any other reinsurance agreement,
will not be paid on those policies lacking the correct SSN.
8. Redesignated Sec. 400.406 is revised to read as follows:
Sec. 400.406 Insurance provider responsibilities.
The insurance provider is required to collect and record the SSN or
EIN on each application or on any other form required by FCIC.
9. Redesignated Sec. 400.407 is revised to read as follows:
400.407 Restricted access.
The Manager, other officer, or employee of FCIC or an authorized
person may have access to the SSNs and EINs obtained pursuant to this
subpart, only for the purpose of establishing and maintaining a system
of records necessary for the effective administration of the Act.
10. Redesignated Sec. 400.408 is revised to read as follows:
Sec. 400.408 Safeguards and storage.
Records must be maintained in secured storage with proper
safeguards sufficient to enforce the restricted access provisions of
this subpart.
11. Redesignated Sec. 400.411 is amended by revising the
introductory text and paragraph (a) to read as follows:
Sec. 400.411 Obtaining personal records.
Policyholders, agents, and loss adjusters in the crop insurance
program will be able to review and correct their records as provided by
the Privacy Act. Records may be requested by:
(a) Mailing a signed written request to the headquarters office of
FCIC; the FCIC Regional Service Office, or the insurance provider; or
* * * * *
12. Redesignated 400.412 is revised to read as follows:
Sec. 400.412 Record retention.
(a) FCIC or the insurance provider will retain all records of
policyholders for a period of not less than 3 years from the date of
final action on a policy for the crop year, unless further maintenance
of specific records is requested by FCIC. Final actions on insurance
policies include conclusion of insurance events, such as the latest of
termination of the policy, completion of loss adjustment, or
satisfaction of claim.
(b) The statute of limitations for FCIC contract claims may permit
litigation to be instituted after the period of record retention.
Destruction of records prior to the expiration of the statute of
limitations will not provide a defense to any action by FCIC against
any private insurance company.
13. Redesignated Sec. 400.413 is revised to read as follow:
Sec. 400.413 OMB control numbers.
The collecting of information requirements in this subpart has been
approved by the Office of Management and Budget and assigned OMB
control number 0563-0047.
Signed in Washington, DC., January 10, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-1016 Filed 1-14-97; 8:45 am]
BILLING CODE 3410-FA-P