[Federal Register Volume 62, Number 101 (Tuesday, May 27, 1997)]
[Rules and Regulations]
[Pages 28607-28609]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13498]



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 Rules and Regulations
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  Federal Register / Vol. 62, No. 101 / Tuesday, May 27, 1997 / Rules 
and Regulations  

[[Page 28607]]


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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: Final 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.

EFFECTIVE DATE: June 26, 1997.

FOR FURTHER INFORMATION CONTACT: Bill Smith, Supervisory Insurance 
Management Specialist, Research and Development, Product Development 
Division, Federal Crop Insurance Corporation, United States Department 
of Agriculture, 9435 Holmes Road, Kansas City, Mo 64131, telephone 
(816) 926-7743.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has determined this rule 
to be not significant for the purpose of Executive Order 12866, and, 
therefore, has not been reviewed by OMB.

Paperwork Reduction Act of 1995

    Following publication of the proposed rule, the public was afforded 
60 days to submit written comments and opinions on information 
collection requirements previously approved by OMB under OMB control 
number 0563-0047, through November 30, 1999. No public comments were 
received.

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. 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. New provisions in the rule will not impact 
small entities to a greater extent than larger 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 12988

    This rule has been reviewed in accordance with Executive Order 
12988 on civil justice reform. The provisions of this rule will not 
have a retroactive effect prior to the effective date. 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 any 
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.

National Performance Review

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

Background

    On Wednesday, January 15, 1997, FCIC published a proposed rule in 
the Federal Register at 62 FR 2052-2055 to amend the General 
Administrative Regulations (7 CFR part 400, subpart Q). Following 
publication of that proposed rule, the public was afforded 60 days to 
submit written comments and opinions. No public comments were received.
    In addition to the proposed changes, FCIC is making the following 
changes to this subpart:
    1. Section 400.405 (b) and (c) are being amended to clarify that it 
is the agent or loss adjuster's SSN which must be provided. The meaning 
of ``premium

[[Page 28608]]

subsidy payable'' in paragraph (c) is also being clarified.

List of Subjects in 7 CFR part 400

    Collection and storage of social security account numbers and 
employer identification numbers, Crop insurance, General administrative 
regulations.

Final Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation hereby amends 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), 1506(p).

    2. Section 400.401 is amended by revising paragraphs (a), (b)(1), 
(2), (3) and (4) to read as follows:


Sec. 400.401  Basis and 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 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 revised 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 a 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.


Secs. 400.405 through 400.412  [Redesignated as Secs. 400.406 through 
Secs. 400.413].

    6. Sections 400.405 through 400.412 are redesignated as sections 
400.406 through 400.413, respectively.
    Sections 400.405 through 400.412 are redesignated as follows:

[[Page 28609]]



------------------------------------------------------------------------
              Old section                          New section          
------------------------------------------------------------------------
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                        
------------------------------------------------------------------------

    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
    (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 his or her 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 his or her correct SSN on 
forms or contracts where such SSN is required, the premium subsidy 
payable for administrative and operating expenses 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:


Sec. 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 Sec. 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 follows:


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, D.C., May 16, 1997.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 97-13498 Filed 5-23-97; 8:45 am]
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