General Administrative Regulations; Subpart L-Reinsurance Agreement-Standards for Approval; Regulations for the 2019 and Subsequent Reinsurance Years, 5573-5576 [2018-02489]
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5573
Proposed Rules
Federal Register
Vol. 83, No. 27
Thursday, February 8, 2018
This section of the FEDERAL REGISTER
contains notices to the public of the proposed
issuance of rules and regulations. The
purpose of these notices is to give interested
persons an opportunity to participate in the
rule making prior to the adoption of the final
rules.
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 400
[Docket No. FCIC–17–0005]
RIN 0563–AC54
General Administrative Regulations;
Subpart L—Reinsurance Agreement—
Standards for Approval; Regulations
for the 2019 and Subsequent
Reinsurance Years
Federal Crop Insurance
Corporation, USDA.
ACTION: Proposed rule.
AGENCY:
The Federal Crop Insurance
Corporation (FCIC) proposes to revise
the General Administrative Regulations;
Subpart L—Reinsurance Agreement—
Standards for Approval; Regulations for
the 2019 and Subsequent Reinsurance
Years. The intended effect of this action
is to clarify and improve Subpart L to
better align with the existing Standard
Reinsurance Agreement (SRA) and
Livestock Price Reinsurance Agreement
(LPRA) and to eliminate language that is
no longer relevant.
DATES: Written comments and opinions
on this proposed rule will be accepted
until close of business April 9, 2018 and
will be considered when the rule is
made final.
ADDRESSES: FCIC prefers that comments
be submitted electronically through the
Federal eRulemaking Portal. You may
submit comments, identified by Docket
ID No. FCIC–17–0005, by any of the
following methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• By Mail to: Director, Reinsurance
Services Division, Federal Crop
Insurance Corporation, United States
Department of Agriculture (USDA),
1400 Independence Avenue SW, Stop
0801, Washington, DC 20250.
All comments received, including
those received by mail, will be posted
without change to https://
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SUMMARY:
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www.regulations.gov, including any
personal information provided, and can
be accessed by the public. All comments
must include the agency name and
docket number or Regulatory
Information Number (RIN) for this rule.
For detailed instructions on submitting
comments and additional information,
see https://www.regulations.gov. If you
are submitting comments electronically
through the Federal eRulemaking Portal
and want to attach a document, we ask
that it be in a text-based format. If you
want to attach a document that is a
scanned Adobe PDF file, it must be
scanned as text and not as an image,
thus allowing FCIC to search and copy
certain portions of your submissions.
For questions regarding attaching a
document that is a scanned Adobe PDF
file, please contact the RMA Web
Content Team at (816)823–4694 or by
email at rmaweb.content@rma.usda.gov.
PRIVACY ACT: Anyone is able to search
the electronic form of all comments
received for any dockets by the name of
the person submitting the comment (or
signing the comment, if submitted on
behalf of an association, business, labor
union, etc.). You may review the
complete User Notice and Privacy
Notice for Regulations.gov at https://
www.regulations.gov/#!privacyNotice.
FOR FURTHER INFORMATION CONTACT:
David L. Miller, Director, Reinsurance
Services Division, Federal Crop
Insurance Corporation, United States
Department of Agriculture (USDA),
1400 Independence Avenue SW, Stop
0801, Washington, DC 20250, telephone
(202) 720–9830.
SUPPLEMENTARY INFORMATION:
Executive Orders 12866, 13563, and
13771
Executive Order 12866, ‘‘Regulatory
Planning and Review,’’ and Executive
Order 13563, ‘‘Improving Regulation
and Regulatory Review,’’ direct agencies
to assess all costs and benefits of
available regulatory alternatives and, if
regulation is necessary, to select
regulatory approaches that maximize
net benefits (including potential
economic, environmental, public health
and safety effects, distributive impacts,
and equity). Executive Order 13563
emphasized the importance of
quantifying both costs and benefits, of
reducing costs, of harmonizing rules,
and of promoting flexibility. The Office
of Management and Budget (OMB)
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designated this rule as not significant
under Executive Order 12866,
‘‘Regulatory Planning and Review,’’ and
therefore, OMB has not reviewed this
rule. The rule is not subject to Executive
Order 13771, ‘‘Reducing Regulation and
Controlling Regulatory Costs.’’
Paperwork Reduction Act of 1995
Pursuant to the provisions of the
Paperwork Reduction Act of 1995 (44
U.S.C. chapter 35), the collections of
information in this rule have been
approved by the Office of Management
and Budget (OMB) under control
number 0563–0069.
E-Government Act Compliance
FCIC is committed to complying with
the E-Government Act of 2002, to
promote the use of the internet and
other information technologies to
provide increased opportunities for
citizen access to Government
information and services, and for other
purposes.
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
mandates (under the regulatory
provisions of title II of the UMRA) for
State, local, and tribal governments or
the private sector. Therefore, this rule is
not subject to the requirements of
sections 202 and 205 of UMRA.
Executive Order 13132
It has been determined under section
1(a) of Executive Order 13132,
Federalism, that this rule does not have
sufficient implications to warrant
consultation with the States. The
provisions contained in this rule will
not have a substantial direct effect on
States, or on the relationship between
the national government and the States,
or on the distribution of power and
responsibilities among the various
levels of government.
Executive Order 13175
This rule has been reviewed in
accordance with the requirements of
Executive Order 13175, ‘‘Consultation
and Coordination with Indian Tribal
Governments.’’ Executive Order 13175
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requires Federal agencies to consult and
coordinate with tribes on a governmentto-government basis on policies that
have tribal implications, including
regulations, legislative comments or
proposed legislation, and other policy
statements or actions that have
substantial direct effects on one or more
Indian tribes, on the relationship
between the Federal Government and
Indian tribes or on the distribution of
power and responsibilities between the
Federal Government and Indian tribes.
FCIC has assessed the impact of this
rule on Indian tribes and determined
that this rule does not, to its knowledge,
have tribal implications that require
tribal consultation under E.O. 13175. If
a Tribe requests consultation, FCIC will
work with the Office of Tribal Relations
to ensure meaningful consultation is
provided where changes, additions and
modifications identified herein are not
expressly mandated by Congress.
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Regulatory Flexibility Act
FCIC certifies that this regulation will
not have a significant economic impact
on a substantial number of small
entities. Program requirements for the
Federal crop insurance program are the
same for all producers regardless of the
size of their farming operation. For
instance, all producers are required to
submit an application and acreage
report to establish their insurance
guarantees and compute premium
amounts, and all producers are required
to submit a notice of loss and
production information to determine the
amount of an indemnity payment in the
event of an insured cause of crop loss.
Whether a producer has 10 acres or
1000 acres, there is no difference in the
kind of information collected. To ensure
crop insurance is available to small
entities, the Federal Crop Insurance Act
(Act) authorizes FCIC to waive
collection of administrative fees from
beginning farmers or ranchers and
limited resource farmers. FCIC believes
this waiver helps to ensure that small
entities are given the same opportunities
as large entities to manage their risks
through the use of Federal crop
insurance. A Regulatory Flexibility
Analysis has not been prepared since
this regulation does not have an impact
on small entities, and, therefore, this
regulation is exempt from the provisions
of the Regulatory Flexibility Act (5
U.S.C. 605). This regulation pertains to
all legal entities wanting a Reinsurance
Agreement, to insure financial stability
and capacity under this regulation.
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Federal Assistance Program
This program is listed in the Catalog
of Federal Domestic Assistance under
No. 10.450.
Subpart L—Reinsurance Agreement—
Standards for Approval; Regulations
for the 2019 and Subsequent
Reinsurance Years
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.
Sec.
400.161 Definitions.
400.162 Qualification ratios.
400.163 Applicability.
400.164 Eligibility for a Reinsurance
Agreement.
400.165 [Reserved]
400.166 [Reserved]
400.167 [Reserved]
400.168 [Reserved]
400.169 Disputes.
400.170 [Reserved]
400.171 [Reserved]
400.172 [Reserved]
400.173 [Reserved]
400.174 [Reserved]
400.175 [Reserved]
400.176 [Reserved]
400.177 [Reserved]
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. The provisions of this rule will
preempt State and local laws to the
extent such State and local laws are
inconsistent herewith. Interpretations of
statutory and regulatory provisions are
matters of general applicability and,
therefore, no administrative appeals
process is available and judicial review
may only be brought to challenge the
interpretation after seeking a
determination of appeal ability by the
Director of the National Appeals
Division (NAD) in accordance with 7
CFR part 11. An interpretation of a
policy provision not codified in the
Code of Federal Regulations or any
procedure used in the administration of
any Federal crop insurance program are
administratively appealable and the
appeal provisions published at 7 CFR
part 11 must be exhausted before any
action for judicial review may be
brought against FCIC.
Environmental Evaluation
This action is not expected to have a
significant economic impact on the
quality of the human environment,
health, or safety. Therefore, neither an
Environmental Assessment nor an
Environmental Impact Statement is
needed.
List of Subjects in 7 CFR Part 400
Administrative practice and
procedure, Crop insurance, Reporting
and recordkeeping requirements.
Proposed Rule
Accordingly, as set forth in the
preamble, FCIC proposes to amend 7
CFR part 400 to read as follows:
PART 400—GENERAL
ADMINISTRATIVE REGULATIONS
1. The authority citation for 7 CFR
part 400 continues to read as follows:
■
Authority: 7 U.S.C. 1506(l), 1506(o).
■
2. Revise Subpart L to read as follows:
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§ 400.161
Definitions.
In addition to the terms defined in the
Standard Reinsurance Agreement,
Livestock Price Reinsurance Agreement
and any other Reinsurance Agreement,
the following terms as used in this rule
are defined to mean:
Annual statutory financial statement
means the annual financial statement of
a Company prepared in accordance with
Statutory Accounting Principles and
submitted to the state insurance
department if required by any state in
which the Company is licensed.
Company means the insurance
company that currently has or is
applying to FCIC for a Reinsurance
Agreement.
FCIC means the Federal Crop
Insurance Corporation as authorized in
section 503 of the Federal Crop
Insurance Act (7 U.S.C. 1503).
MPUL means the maximum possible
underwriting loss that a Company can
sustain on policies it intends to reinsure
after adjusting for the effect of any
Reinsurance Agreement and any private
reinsurance, as evaluated by FCIC.
Plan of operation means the
documentation and information
submitted by a Company to apply for or
maintain a Reinsurance Agreement as
required by FCIC.
Quarterly Statutory Financial
Statement means the quarterly financial
statement of a Company prepared in
accordance with Statutory Accounting
Principles and submitted to the state
insurance department if required by any
state in which the Company is licensed.
Reinsurance Agreement means the
Standard Reinsurance Agreement,
Livestock Price Reinsurance Agreement
and any other Reinsurance Agreement
between the Company and FCIC.
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§ 400.162
Qualification ratios.
Information System’’ distributed by
NAIC, 1100 Walnut St., Suite 1500,
Kansas City, MO 64106–2197;
(2) Three ratios used by A.M. Best
Company found in subsections (b)(13),
(15), and (16) of this section and
referenced in Best’s Key Rating Guide,
A.M. Best, Ambest Road, Oldwick, N.J.
08858–0700;
(3) One ratio found in paragraph
(b)(14) of this section which is
(a) The eighteen qualification ratios
include:
(1) Thirteen National Association of
Insurance Commissioner’s (NAIC’s)
Insurance Regulatory Information
System (IRIS) ratios found in
subsections (b)(1), (2), (3), (4), (5), (6),
(7), (8), (9), (10), (11), (12), and (17) of
this section and referenced in ‘‘Using
the NAIC Insurance Regulatory
formulated by FCIC and is calculated
the same as the One-Year Change to
Surplus IRIS ratio but for a two-year
period; and
(4) One ratio found in paragraph
(b)(18) of this section, which is reported
on the annual statutory financial
statement.
(b) The Company shall provide an
explanation for any ratio falling outside
of the requirements stated below.
Ratio
Ratio requirement
(1) Gross Premium Written to Policyholders Surplus .........................................................................................................
(2) Net Premium Written to Policyholders Surplus .............................................................................................................
(3) Change in Net Premiums Writings ................................................................................................................................
(4) Surplus Aid to Policyholders Surplus .............................................................................................................................
(5) Two-Year Overall Operating Ratio .................................................................................................................................
(6) Change in Policyholders Surplus ...................................................................................................................................
(7) Investment Yield .............................................................................................................................................................
(8) Liabilities to Liquid Assets ..............................................................................................................................................
(9) Gross Agents Balances to Policyholders Surplus .........................................................................................................
(10) One Year Reserve Development to Policyholders Surplus .........................................................................................
(11) Two Year Reserve Development to Policyholders Surplus .........................................................................................
(12) Estimated Current Reserve Deficiency to Policyholders Surplus ................................................................................
(13) Combined Ratio after Policyholder Dividend ...............................................................................................................
(14) Two Year Change in Surplus .......................................................................................................................................
(15) Quick Liquidity ..............................................................................................................................................................
(16) Return on Surplus ........................................................................................................................................................
(17) Net Change in Adjusted Policyholder Surplus .............................................................................................................
(18) Risk Based Capital Ratio .............................................................................................................................................
§ 400.163
Applicability.
The standards contained herein shall
be applicable to a Company applying for
and those maintaining a Reinsurance
Agreement.
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§ 400.164 Eligibility for a Reinsurance
Agreement.
FCIC will offer a Reinsurance
Agreement to an eligible Company as
determined by FCIC. To be eligible and
qualify initially or thereafter for a
Reinsurance Agreement with FCIC, a
Company must:
(a) Be licensed or admitted in any
state, territory, or possession of the
United States;
(b) Be licensed or admitted, or use as
a policy-issuing company an insurance
company that is licensed or admitted, in
each state where the Company will
write policies under a Reinsurance
Agreement;
(c) Have surplus, as reported in its
most recent Annual or Quarterly
Statutory Financial Statement, that is at
least equal to twice the MPUL amount
for the Company’s estimated retained
premium submitted in its plan of
operation.
(d) The Company shall have the
financial and operational resources,
including but not limited to,
organization, experience, internal
controls, and technical skills, positive
assessment of the ratio results appearing
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in Section 400.162 as well as meeting
methodologies, data submission
requirements and assessment appearing
in Appendix II (Plan of Operations) of
the Reinsurance Agreement to meet the
requirements, including addressing
reasonable risks, associated with a
Reinsurance Agreement, as determined
by FCIC.
(e) The Company shall provide data
and demonstrate a satisfactory
performance record to obtain a
Reinsurance Agreement and continue to
hold a Reinsurance Agreement for the
reinsurance year as determined by FCIC.
§ 400.165
[Reserved]
§ 400.166
[Reserved]
§ 400.167
[Reserved]
§ 400.168
[Reserved]
§ 400.169
Disputes.
(a) If the Company believes that the
FCIC has taken an action that is not in
accordance with the provisions of a
Reinsurance Agreement except
compliance issues, it may request the
Deputy Administrator of Insurance
Services to make a final administrative
determination addressing the disputed
action. The Deputy Administrator of
Insurance Services will render the final
administrative determination of the
FCIC with respect to the applicable
actions. All requests for a final
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<900%
<300%
¥33% to 33%
<15%
<100%
¥10% to 50%
3.0% to 6.5%
<100%
<40%
<20%
<20%
<25%
<115%
>¥10%
>20%
>¥5%
¥10% to 25%
>200%
administrative determination must be in
writing and submitted within 45 days
after receipt after the disputed action.
(b) With respect to compliance
matters, the Compliance Field Office
renders an initial finding or outcome,
permits the Company to respond, and
then issues a final finding or outcome.
If the Company believes that the
Compliance Field Office’s final finding
or outcome is not in accordance with
the applicable laws, regulations, custom
or practice of the insurance industry, or
FCIC approved policy and procedure, it
may request, the Deputy Administrator
of Compliance to make a final
administrative determination addressing
the disputed final finding or outcome.
The Deputy Administrator of
Compliance will render the final
administrative determination of the
FCIC with respect to these issues. All
requests for a final administrative
determination must be in writing and
submitted within 45 days after receipt of
the final finding or outcome.
(c) A Company may also request
reconsideration by the Deputy
Administrator of Insurance Services of a
decision of the FCIC rendered under any
FCIC bulletin or directive which
bulletin or directive does not interpret,
explain, or restrict the terms of the
Reinsurance Agreement. The Company,
if it disputes the FCIC’s determination,
must request a reconsideration of that
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determination in writing, within 45
days of the receipt of the determination.
The determination of the Deputy
Administrator of Insurance Services 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 FCIC under
paragraph (a) or (b) of this section may
be appealed to the Board of Contract
Appeals in accordance with 48 CFR part
6102 and with the provisions 7 CFR part
24.
§ 400.170
[Reserved]
§ 400.171
[Reserved]
§ 400.172
[Reserved]
§ 400.173
[Reserved]
§ 400.174
[Reserved]
§ 400.175
[Reserved]
§ 400.176
[Reserved]
§ 400.177
[Reserved]
Signed in Washington, DC, on February 1,
2018.
Heather Manzano,
Acting Manager, Federal Crop Insurance
Corporation.
[FR Doc. 2018–02489 Filed 2–7–18; 8:45 am]
BILLING CODE 3410–08–P
We must receive comments on
this proposed AD by March 26, 2018.
ADDRESSES: You may send comments,
using the procedures found in 14 CFR
11.43 and 11.45, by any of the following
methods:
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
instructions for submitting comments.
• Fax: 202–493–2251.
• Mail: U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
• Hand Delivery: Deliver to Mail
address above between 9 a.m. and 5
p.m., Monday through Friday, except
Federal holidays.
For service information identified in
this NPRM, contact Boeing Commercial
Airplanes, Attention: Contractual & Data
Services (C&DS), 2600 Westminster
Blvd., MC 110–SK57, Seal Beach, CA
90740–5600; telephone 562–797–1717;
internet https://
www.myboeingfleet.com. You may view
this service information at the FAA,
Transport Standards Branch, 1601 Lind
Avenue SW, Renton, WA. For
information on the availability of this
material at the FAA, call 425–227–1221.
It is also available on the internet at
https://www.regulations.gov by searching
for and locating Docket No. FAA–2018–
0031.
DATES:
Examining the AD Docket
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
[Docket No. FAA–2018–0031; Product
Identifier 2017–NM–127–AD]
RIN 2120–AA6417
Airworthiness Directives; The Boeing
Company Airplanes
Federal Aviation
Administration (FAA), DOT.
ACTION: Notice of proposed rulemaking
(NPRM).
AGENCY:
We propose to adopt a new
airworthiness directive (AD) for certain
The Boeing Company Model 727
airplanes. This proposed AD was
prompted by significant changes made
to the airworthiness limitations (AWLs)
related to fuel tank ignition prevention.
This proposed AD would require
revising the maintenance or inspection
program, as applicable, to incorporate
the latest revision of the AWLs. We are
proposing this AD to address the unsafe
condition on these products.
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SUMMARY:
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You may examine the AD docket on
the internet at https://
www.regulations.gov by searching for
and locating Docket No. FAA–2018–
0031; or in person at Docket Operations
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
The AD docket contains this NPRM, the
regulatory evaluation, any comments
received, and other information. The
street address for Docket Operations
(phone: 800–647–5527) is in the
ADDRESSES section. Comments will be
available in the AD docket shortly after
receipt.
FOR FURTHER INFORMATION CONTACT:
Christopher Baker, Aerospace Engineer,
Propulsion Section, FAA, Seattle ACO
Branch, 1601 Lind Avenue SW, Renton,
WA 98057–3356; phone: 425–917–6498;
fax: 425–917–6590; email:
christopher.r.baker@faa.gov.
SUPPLEMENTARY INFORMATION:
Comments Invited
We invite you to send any written
relevant data, views, or arguments about
this proposal. Send your comments to
an address listed under the ADDRESSES
section. Include ‘‘Docket No. FAA–
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2018–0031; Product Identifier 2017–
NM–127–AD’’ at the beginning of your
comments. We specifically invite
comments on the overall regulatory,
economic, environmental, and energy
aspects of this NPRM. We will consider
all comments received by the closing
date and may amend this NPRM
because of those comments.
We will post all comments we
receive, without change, to https://
www.regulations.gov, including any
personal information you provide. We
will also post a report summarizing each
substantive verbal contact we receive
about this NPRM.
Discussion
The FAA has examined the
underlying safety issues involved in fuel
tank explosions on several large
transport airplanes, including the
adequacy of existing regulations, the
service history of airplanes subject to
those regulations, and existing
maintenance practices for fuel tank
systems. As a result of those findings,
we issued a final rule titled ‘‘Transport
Airplane Fuel Tank System Design
Review, Flammability Reduction and
Maintenance and Inspection
Requirements’’ (66 FR 23086, May 7,
2001). In addition to new airworthiness
standards for transport airplanes and
new maintenance requirements, that
rule included Amendment 21–78,
which established Special Federal
Aviation Regulation No. 88 (‘‘SFAR 88’’)
at 14 CFR part 21. Subsequently, SFAR
88 was amended by Amendment 21–82
(67 FR 57490, September 20, 2002;
corrected at 67 FR 70809, November 26,
2002) and Amendment 21–83 (67 FR
72830, December 9, 2002; corrected at
68 FR 37735, June 25, 2003, to change
‘‘21–72’’ to ‘‘21–83’’).
Among other actions, SFAR 88
requires certain type design (i.e., type
certificate (TC) and supplemental type
certificate (STC)) holders to substantiate
that their fuel tank systems can prevent
ignition sources in the fuel tanks. This
requirement applies to type design
holders for large turbine-powered
transport airplanes and for subsequent
modifications to those airplanes. It
requires them to perform design reviews
and to develop design changes and
maintenance procedures if their designs
do not meet the new fuel tank safety
standards. As explained in the preamble
to the final rule published on May 7,
2001, we intended to adopt
airworthiness directives to mandate any
changes found necessary to address
unsafe conditions identified as a result
of these reviews.
In evaluating these design reviews, we
have established four criteria intended
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]]>Agencies
[Federal Register Volume 83, Number 27 (Thursday, February 8, 2018)]
[Proposed Rules]
[Pages 5573-5576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-02489]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 83, No. 27 / Thursday, February 8, 2018 /
Proposed Rules
[[Page 5573]]
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 400
[Docket No. FCIC-17-0005]
RIN 0563-AC54
General Administrative Regulations; Subpart L--Reinsurance
Agreement--Standards for Approval; Regulations for the 2019 and
Subsequent Reinsurance Years
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to
revise the General Administrative Regulations; Subpart L--Reinsurance
Agreement--Standards for Approval; Regulations for the 2019 and
Subsequent Reinsurance Years. The intended effect of this action is to
clarify and improve Subpart L to better align with the existing
Standard Reinsurance Agreement (SRA) and Livestock Price Reinsurance
Agreement (LPRA) and to eliminate language that is no longer relevant.
DATES: Written comments and opinions on this proposed rule will be
accepted until close of business April 9, 2018 and will be considered
when the rule is made final.
ADDRESSES: FCIC prefers that comments be submitted electronically
through the Federal eRulemaking Portal. You may submit comments,
identified by Docket ID No. FCIC-17-0005, by any of the following
methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
By Mail to: Director, Reinsurance Services Division,
Federal Crop Insurance Corporation, United States Department of
Agriculture (USDA), 1400 Independence Avenue SW, Stop 0801, Washington,
DC 20250.
All comments received, including those received by mail, will be
posted without change to https://www.regulations.gov, including any
personal information provided, and can be accessed by the public. All
comments must include the agency name and docket number or Regulatory
Information Number (RIN) for this rule. For detailed instructions on
submitting comments and additional information, see https://www.regulations.gov. If you are submitting comments electronically
through the Federal eRulemaking Portal and want to attach a document,
we ask that it be in a text-based format. If you want to attach a
document that is a scanned Adobe PDF file, it must be scanned as text
and not as an image, thus allowing FCIC to search and copy certain
portions of your submissions. For questions regarding attaching a
document that is a scanned Adobe PDF file, please contact the RMA Web
Content Team at (816)823-4694 or by email at
[email protected].
PRIVACY ACT: Anyone is able to search the electronic form of all
comments received for any dockets by the name of the person submitting
the comment (or signing the comment, if submitted on behalf of an
association, business, labor union, etc.). You may review the complete
User Notice and Privacy Notice for Regulations.gov at https://www.regulations.gov/#!privacyNotice.
FOR FURTHER INFORMATION CONTACT: David L. Miller, Director, Reinsurance
Services Division, Federal Crop Insurance Corporation, United States
Department of Agriculture (USDA), 1400 Independence Avenue SW, Stop
0801, Washington, DC 20250, telephone (202) 720-9830.
SUPPLEMENTARY INFORMATION:
Executive Orders 12866, 13563, and 13771
Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review,''
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasized the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility. The Office of
Management and Budget (OMB) designated this rule as not significant
under Executive Order 12866, ``Regulatory Planning and Review,'' and
therefore, OMB has not reviewed this rule. The rule is not subject to
Executive Order 13771, ``Reducing Regulation and Controlling Regulatory
Costs.''
Paperwork Reduction Act of 1995
Pursuant to the provisions of the Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35), the collections of information in this rule
have been approved by the Office of Management and Budget (OMB) under
control number 0563-0069.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act of 2002,
to promote the use of the internet and other information technologies
to provide increased opportunities for citizen access to Government
information and services, and for other purposes.
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
mandates (under the regulatory provisions of title II of the UMRA) for
State, local, and tribal governments or the private sector. Therefore,
this rule is not subject to the requirements of sections 202 and 205 of
UMRA.
Executive Order 13132
It has been determined under section 1(a) of Executive Order 13132,
Federalism, that this rule does not have sufficient implications to
warrant consultation with the States. The provisions contained in this
rule will not have a substantial direct effect on States, or on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' Executive Order 13175
[[Page 5574]]
requires Federal agencies to consult and coordinate with tribes on a
government-to-government basis on policies that have tribal
implications, including regulations, legislative comments or proposed
legislation, and other policy statements or actions that have
substantial direct effects on one or more Indian tribes, on the
relationship between the Federal Government and Indian tribes or on the
distribution of power and responsibilities between the Federal
Government and Indian tribes.
FCIC has assessed the impact of this rule on Indian tribes and
determined that this rule does not, to its knowledge, have tribal
implications that require tribal consultation under E.O. 13175. If a
Tribe requests consultation, FCIC will work with the Office of Tribal
Relations to ensure meaningful consultation is provided where changes,
additions and modifications identified herein are not expressly
mandated by Congress.
Regulatory Flexibility Act
FCIC certifies that this regulation will not have a significant
economic impact on a substantial number of small entities. Program
requirements for the Federal crop insurance program are the same for
all producers regardless of the size of their farming operation. For
instance, all producers are required to submit an application and
acreage report to establish their insurance guarantees and compute
premium amounts, and all producers are required to submit a notice of
loss and production information to determine the amount of an indemnity
payment in the event of an insured cause of crop loss. Whether a
producer has 10 acres or 1000 acres, there is no difference in the kind
of information collected. To ensure crop insurance is available to
small entities, the Federal Crop Insurance Act (Act) authorizes FCIC to
waive collection of administrative fees from beginning farmers or
ranchers and limited resource farmers. FCIC believes this waiver helps
to ensure that small entities are given the same opportunities as large
entities to manage their risks through the use of Federal crop
insurance. A Regulatory Flexibility Analysis has not been prepared
since this regulation does not have an impact on small entities, and,
therefore, this regulation is exempt from the provisions of the
Regulatory Flexibility Act (5 U.S.C. 605). This regulation pertains to
all legal entities wanting a Reinsurance Agreement, to insure financial
stability and capacity under this regulation.
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. The provisions of this rule will preempt
State and local laws to the extent such State and local laws are
inconsistent herewith. Interpretations of statutory and regulatory
provisions are matters of general applicability and, therefore, no
administrative appeals process is available and judicial review may
only be brought to challenge the interpretation after seeking a
determination of appeal ability by the Director of the National Appeals
Division (NAD) in accordance with 7 CFR part 11. An interpretation of a
policy provision not codified in the Code of Federal Regulations or any
procedure used in the administration of any Federal crop insurance
program are administratively appealable and the appeal provisions
published at 7 CFR part 11 must be exhausted before any action for
judicial review may be brought against FCIC.
Environmental Evaluation
This action is not expected to have a significant economic impact
on the quality of the human environment, health, or safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
List of Subjects in 7 CFR Part 400
Administrative practice and procedure, Crop insurance, Reporting
and recordkeeping requirements.
Proposed Rule
Accordingly, as set forth in the preamble, FCIC proposes to amend 7
CFR part 400 to read as follows:
PART 400--GENERAL ADMINISTRATIVE REGULATIONS
0
1. The authority citation for 7 CFR part 400 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(o).
0
2. Revise Subpart L to read as follows:
Subpart L--Reinsurance Agreement--Standards for Approval;
Regulations for the 2019 and Subsequent Reinsurance Years
Sec.
400.161 Definitions.
400.162 Qualification ratios.
400.163 Applicability.
400.164 Eligibility for a Reinsurance Agreement.
400.165 [Reserved]
400.166 [Reserved]
400.167 [Reserved]
400.168 [Reserved]
400.169 Disputes.
400.170 [Reserved]
400.171 [Reserved]
400.172 [Reserved]
400.173 [Reserved]
400.174 [Reserved]
400.175 [Reserved]
400.176 [Reserved]
400.177 [Reserved]
Sec. 400.161 Definitions.
In addition to the terms defined in the Standard Reinsurance
Agreement, Livestock Price Reinsurance Agreement and any other
Reinsurance Agreement, the following terms as used in this rule are
defined to mean:
Annual statutory financial statement means the annual financial
statement of a Company prepared in accordance with Statutory Accounting
Principles and submitted to the state insurance department if required
by any state in which the Company is licensed.
Company means the insurance company that currently has or is
applying to FCIC for a Reinsurance Agreement.
FCIC means the Federal Crop Insurance Corporation as authorized in
section 503 of the Federal Crop Insurance Act (7 U.S.C. 1503).
MPUL means the maximum possible underwriting loss that a Company
can sustain on policies it intends to reinsure after adjusting for the
effect of any Reinsurance Agreement and any private reinsurance, as
evaluated by FCIC.
Plan of operation means the documentation and information submitted
by a Company to apply for or maintain a Reinsurance Agreement as
required by FCIC.
Quarterly Statutory Financial Statement means the quarterly
financial statement of a Company prepared in accordance with Statutory
Accounting Principles and submitted to the state insurance department
if required by any state in which the Company is licensed.
Reinsurance Agreement means the Standard Reinsurance Agreement,
Livestock Price Reinsurance Agreement and any other Reinsurance
Agreement between the Company and FCIC.
[[Page 5575]]
Sec. 400.162 Qualification ratios.
(a) The eighteen qualification ratios include:
(1) Thirteen National Association of Insurance Commissioner's
(NAIC's) Insurance Regulatory Information System (IRIS) ratios found in
subsections (b)(1), (2), (3), (4), (5), (6), (7), (8), (9), (10), (11),
(12), and (17) of this section and referenced in ``Using the NAIC
Insurance Regulatory Information System'' distributed by NAIC, 1100
Walnut St., Suite 1500, Kansas City, MO 64106-2197;
(2) Three ratios used by A.M. Best Company found in subsections
(b)(13), (15), and (16) of this section and referenced in Best's Key
Rating Guide, A.M. Best, Ambest Road, Oldwick, N.J. 08858-0700;
(3) One ratio found in paragraph (b)(14) of this section which is
formulated by FCIC and is calculated the same as the One-Year Change to
Surplus IRIS ratio but for a two-year period; and
(4) One ratio found in paragraph (b)(18) of this section, which is
reported on the annual statutory financial statement.
(b) The Company shall provide an explanation for any ratio falling
outside of the requirements stated below.
------------------------------------------------------------------------
Ratio Ratio requirement
------------------------------------------------------------------------
(1) Gross Premium Written to Policyholders <900%
Surplus.......................................
(2) Net Premium Written to Policyholders <300%
Surplus.......................................
(3) Change in Net Premiums Writings............ -33% to 33%
(4) Surplus Aid to Policyholders Surplus....... <15%
(5) Two-Year Overall Operating Ratio........... <100%
(6) Change in Policyholders Surplus............ -10% to 50%
(7) Investment Yield........................... 3.0% to 6.5%
(8) Liabilities to Liquid Assets............... <100%
(9) Gross Agents Balances to Policyholders <40%
Surplus.......................................
(10) One Year Reserve Development to <20%
Policyholders Surplus.........................
(11) Two Year Reserve Development to <20%
Policyholders Surplus.........................
(12) Estimated Current Reserve Deficiency to <25%
Policyholders Surplus.........................
(13) Combined Ratio after Policyholder Dividend <115%
(14) Two Year Change in Surplus................ >-10%
(15) Quick Liquidity........................... >20%
(16) Return on Surplus......................... >-5%
(17) Net Change in Adjusted Policyholder -10% to 25%
Surplus.......................................
(18) Risk Based Capital Ratio.................. >200%
------------------------------------------------------------------------
Sec. 400.163 Applicability.
The standards contained herein shall be applicable to a Company
applying for and those maintaining a Reinsurance Agreement.
Sec. 400.164 Eligibility for a Reinsurance Agreement.
FCIC will offer a Reinsurance Agreement to an eligible Company as
determined by FCIC. To be eligible and qualify initially or thereafter
for a Reinsurance Agreement with FCIC, a Company must:
(a) Be licensed or admitted in any state, territory, or possession
of the United States;
(b) Be licensed or admitted, or use as a policy-issuing company an
insurance company that is licensed or admitted, in each state where the
Company will write policies under a Reinsurance Agreement;
(c) Have surplus, as reported in its most recent Annual or
Quarterly Statutory Financial Statement, that is at least equal to
twice the MPUL amount for the Company's estimated retained premium
submitted in its plan of operation.
(d) The Company shall have the financial and operational resources,
including but not limited to, organization, experience, internal
controls, and technical skills, positive assessment of the ratio
results appearing in Section 400.162 as well as meeting methodologies,
data submission requirements and assessment appearing in Appendix II
(Plan of Operations) of the Reinsurance Agreement to meet the
requirements, including addressing reasonable risks, associated with a
Reinsurance Agreement, as determined by FCIC.
(e) The Company shall provide data and demonstrate a satisfactory
performance record to obtain a Reinsurance Agreement and continue to
hold a Reinsurance Agreement for the reinsurance year as determined by
FCIC.
Sec. 400.165 [Reserved]
Sec. 400.166 [Reserved]
Sec. 400.167 [Reserved]
Sec. 400.168 [Reserved]
Sec. 400.169 Disputes.
(a) If the Company believes that the FCIC has taken an action that
is not in accordance with the provisions of a Reinsurance Agreement
except compliance issues, it may request the Deputy Administrator of
Insurance Services to make a final administrative determination
addressing the disputed action. The Deputy Administrator of Insurance
Services will render the final administrative determination of the FCIC
with respect to the applicable actions. All requests for a final
administrative determination must be in writing and submitted within 45
days after receipt after the disputed action.
(b) With respect to compliance matters, the Compliance Field Office
renders an initial finding or outcome, permits the Company to respond,
and then issues a final finding or outcome. If the Company believes
that the Compliance Field Office's final finding or outcome is not in
accordance with the applicable laws, regulations, custom or practice of
the insurance industry, or FCIC approved policy and procedure, it may
request, the Deputy Administrator of Compliance to make a final
administrative determination addressing the disputed final finding or
outcome. The Deputy Administrator of Compliance will render the final
administrative determination of the FCIC with respect to these issues.
All requests for a final administrative determination must be in
writing and submitted within 45 days after receipt of the final finding
or outcome.
(c) A Company may also request reconsideration by the Deputy
Administrator of Insurance Services of a decision of the FCIC rendered
under any FCIC bulletin or directive which bulletin or directive does
not interpret, explain, or restrict the terms of the Reinsurance
Agreement. The Company, if it disputes the FCIC's determination, must
request a reconsideration of that
[[Page 5576]]
determination in writing, within 45 days of the receipt of the
determination. The determination of the Deputy Administrator of
Insurance Services 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 FCIC
under paragraph (a) or (b) of this section may be appealed to the Board
of Contract Appeals in accordance with 48 CFR part 6102 and with the
provisions 7 CFR part 24.
Sec. 400.170 [Reserved]
Sec. 400.171 [Reserved]
Sec. 400.172 [Reserved]
Sec. 400.173 [Reserved]
Sec. 400.174 [Reserved]
Sec. 400.175 [Reserved]
Sec. 400.176 [Reserved]
Sec. 400.177 [Reserved]
Signed in Washington, DC, on February 1, 2018.
Heather Manzano,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. 2018-02489 Filed 2-7-18; 8:45 am]
BILLING CODE 3410-08-P
