(a) A complete submission must contain the following material, as applicable, in the order given, in a three ring binder, with a table of contents, page numbers, and section dividers clearly labeling each section or in an electronic format that when printed will be an exact duplicate of the information that would have been found in the three-ring binder with the exception of section dividers.
(1) If a hard copy of the submission is provided, it must include six identical copies provided to the Deputy Administrator, Research and Development (or successor), Risk Management Agency, 6501 Beacon Drive, Stop 0812, Kansas City, MO 64133-4676, and one identical copy of the submission provided to the Administrator, Risk Management Agency, 1400 Independence Ave., Stop 0801, Room 3053 South Building, Washington, DC 20250-0801.
(2) Electronic submissions must be sent to the Deputy Administrator, Research and Development (or successor) at DeputyAdministrator@rma.usda.gov and the Administrator at Administrator@rma.usda.gov.
(b) The first section will contain general information, including, as applicable:
(1) The applicant's name, address or primary business location, phone number, and e-mail address;
(2) The type of submission (see Sec. 400.704);
(3) A statement of whether the applicant is requesting:
(i) Reinsurance, which includes risk subsidy and A&O; subsidy;
(ii) Reimbursement for research and development costs, as applicable; or
(iii) Reimbursement for maintenance costs, as applicable;
(4) The proposed agricultural commodities, including types, varieties, and practices covered by the submission;
(5) The crop and reinsurance years in which the submission is proposed to be available for purchase by producers;
(6) The proposed sales closing date, if applicable, or if not applicable, the earliest date the applicant expects to release the product to the public;
(7) The proposed duration and scope of the plan of insurance;
(8) A marketing plan;
(9) Any known or anticipated future expansion plans;
(10) Identification, including names, addresses, telephone numbers, and e-mail addresses, of the persons responsible for:
(i) Addressing questions regarding the policy, underwriting rules, loss adjustment procedures, rate and price methodologies, data processing and record-keeping requirements, and any other questions that may arise in administering the program after it is approved; and
(ii) Annual reviews to ensure compliance with all requirements of the Act, this subpart, and any agreements executed between the applicant and FCIC; and
(11) A statement of whether the submission will be filed with the applicable office responsible for regulating insurance in each state proposed for insurance coverage, and if not, reasons why the submission will not be filed for review.
(c) The second section must contain the benefits of the plan, including, as applicable, a statement about the plan that demonstrates:
(1) How the submission offers coverage or other benefits not currently available from existing public and private programs;
(2) The projected demand for the submission, which must be supported by information from market research, producers or producer groups, agents, lending institutions, and other interested parties that provide verifiable evidence of demand; and
(3) How the submission meets public policy goals and objectives consistent with the Act and other laws, as well as policy goals supported by USDA and the Federal Government.
(d) Except as provided in this section, the third section must contain the policy, including, as applicable:
(1) If the submission involves a new insurance policy or plan of insurance:
(i) All applicable policy provisions; and
(ii) A list and description of any additional coverage that may be elected by the insured, including how such coverage may be obtained; and
(2) If the submission involves a change to a previously approved policy, plan of insurance, or rates of premium, the proposed revisions, rationale for each change, data and analysis supporting each change, the impact of each change, and the impact of all changes in aggregate.
(e) The fourth section must contain the information related to the marketing of the policy or plan of insurance, including, as applicable:
(1) A list of counties and states where the submission is proposed to be offered;
(2) The amount of commodity (acres, head, board feet, etc.), the amount of production, and the value of each agricultural commodity proposed to be covered in each proposed county and state;
(3) The expected liability and premium for each proposed county and state;
(4) If available, any insurance experience for each year and in each proposed county and state in which the policy has been previously offered for sale including an evaluation of the policy's performance and, if data are available, a comparison with other similar insurance policies reinsured under the Act;
(5) Focus group results;
(6) Market research studies;
(7) Qualitative market estimates;
(8) Affects upon the delivery system or ancillary participants;
(9) Correspondence from producers expressing the need for such policy or plan of insurance;
(10) Responses from a reasonable representative cross-section of producers to be affected by the policy or plan of insurance; and
(11) Commitment in writing from at least one approved insurance provider to sell and support the policy or plan of insurance.
(f) The fifth section must contain the information related to the underwriting and loss adjustment of the submission, including as applicable:
(1) Detailed rules for determining insurance eligibility, including all producer reporting requirements;
(2) Relevant dates, if not included in the proposed policy;
(3) Detailed examples of the data and calculations needed to establish the insurance guarantee, liability, and premium per acre or other unit of measure, including worksheets that provide the calculations in sufficient detail and in the same order as presented in the policy to allow verification that the premiums charged for the coverage are consistent with policy provisions;
(4) Detailed examples of calculations used to determine indemnity payments for all probable situations where a partial or total loss may occur;
(5) A detailed description of the causes of loss covered by the policy or plan of insurance and any causes of loss excluded;
(6) Any statements to be included in the actuarial documents; and
(7) The loss adjustment standards handbook for the policy or plan of insurance that includes:
(i) A table of contents and introduction;
(ii) A section containing abbreviations, acronyms, and definitions;
(iii) A section containing insurance contract information (insurability requirements; crop provisions not applicable to catastrophic risk protection; specific unit division guidelines, if applicable; notice of damage or loss provisions; quality adjustment provisions; etc);
(iv) A section that thoroughly explains appraisal methods, if applicable;
(v) Illustrative samples of all the applicable forms needed for insuring and adjusting losses in regards to the product plus detailed instructions for their use and completion;
(vi) Instructions, examples of calculations, and loss adjustment procedures that are necessary to establish the amounts of coverage and loss;
(vii) A section containing any special coverage information (i.e., replanting, tree replacement or rehabilitation, prevented planting, etc.), as applicable; and
(viii) A section containing all applicable reference material (i.e., minimum sample requirements, row width factors, etc.).
(g) The sixth section must contain information related to prices and rates of premium, including, as applicable:
(1) A list of all assumptions made in the premium rating and commodity pricing methodologies, and the basis for these assumptions;
(2) A detailed description of the pricing and rating methodologies, including supporting documentation, all mathematical formulas, equations, and data sources used in determining rates and prices and an explanation of premium components that detail how rates were determined for each component, that demonstrate the rate is appropriate;
(3) An example of both a rate calculation and a price calculation;
(4) A discussion of the applicant's objective evaluation of the reliability of the data;
(5) An analysis of the results of simulations or modeling showing the performance of proposed rates and commodity prices, as applicable, based on one or more of the following (Such simulations must use all years of experience available to the applicant);
(i) A recalculation of total premium and losses compared to a similar or comparable insurance plan offered under the authority of the Act with modifications, as needed, to represent the components of the submission;
(ii) A simulation based on the probability distributions used to develop the rates and commodity prices, as applicable, including sensitivity tests that demonstrate price or yield extremes, and the impact of inappropriate assumptions; or
(iii) Any other comparable simulation that provides results indicating both aggregate and individual performance of the submission under various scenarios depicting good and poor actuarial experience; and
(6) A simulation of expected losses capturing both a probable loss and a total loss.
(h) The seventh section must contain an evaluation and certification from a disinterested third party who is an accredited associate or fellow of the Casualty Actuarial Society, or other similarly qualified professional, who certifies the submission is actuarially appropriate and consistent with appropriate insurance principles and practices.
(i) The eighth section must contain all forms applicable to the submission, including:
(1) An application for insurance and procedures for accepting the application; and
(2) All applicable policy forms, instructions and procedures that are necessary to establish the amounts of coverage or loss.
(j) The ninth section must contain the following:
(1) A statement specifying sales will not commence for any new or revised submission until at least 60 days after all policy provisions and related material are released to the public by RMA, unless otherwise specified by the Board;
(2) An explanation of any provision of the policy not authorized under the Act and identification of the portion of the rate of premium due to these provisions;
(3) Agent and loss adjuster training plans; and
(4) A certification from the applicant's legal counsel that the submission meets and complies with all requirements of the Act, applicable regulations, and any reinsurance agreement.
(k) The tenth section must contain a written plan, including specifications and details for the systems and software development necessary for the implementation of the submission, if applicable, and the documents that demonstrate the submitter has the capability and resources to develop systems that comply in all respects with the standards established for processing and acceptance of data by the FCIC Data Acceptance System, or successor system, unless otherwise authorized by FCIC. Unless otherwise determined by FCIC, the applicant must consult with FCIC to determine whether their submission can be implemented and administered through the current system;
(1) If FCIC approves the submission and determines that its system has the capacity to implement and administer the submission, the applicant must provide acceptable computer requirements, code and software, consistent with that used by FCIC, to facilitate the acceptance of producer applications and all related data;
(2) If FCIC approves the submission and determines that its system lacks the capacity to implement and administer the submission, the applicant must provide acceptable computer systems, requirements, code and software necessary to implement and administer the policy or plan of insurance;
(3) Any computer systems, requirements, code and software must be consistent with that used by FCIC and comply with the standards established in Appendix III, or any successor document, of the Standard Reinsurance Agreement or other reinsurance agreement as specified by FCIC; and
(4) These requirements are available from the Risk Management Agency, 6501 Beacon Drive, Stop 0812, Kansas City, MO, 64133-4676 or on RMA's Web site at http://www.rma.usda.gov/data/m13, or a successor website.
(l) The eleventh section must contain a training package. The training package must include a thorough discussion, explanations, written exercises, and examples covering the following topics:
(1) Basic and catastrophic risk protection policy provisions;
(2) The commodity provisions and any endorsements;
(3) Underwriting under the underwriting guide;
(4) Eligibility requirements;
(5) Guarantee, indemnity, and premium calculations;
(6) Special Provisions of Insurance;
(7) Actuarial documents;
(8) Loss adjustment under the loss adjustment standards handbook;
(9) Applicable additions to the Crop Insurance Handbook (CIH); and
(10) Applicable additions to the Loss Adjustment Manual (LAM).
(m) The twelfth section submitted on separate pages and in accordance with Sec. 400.712 must specify:
(1) On one page, the total estimated amount that will be requested for reimbursement of research and development costs (for new products only) or the estimated amount for maintenance costs for the year for which the submission will be effective (for products that are within the maintenance period); and
(2) On another page, a comprehensive estimate of maintenance costs for each future year of the maintenance period and the basis for which such maintenance costs will be incurred, including, but not limited to:
(i) Any anticipated expansion;
(ii) The generation of rates, Special Provisions, underwriting rules, etc;
(iii) The determination of prices; and
(iv) Any other costs that the applicant anticipates will be requested for reimbursement.
(n) The thirteenth section must contain executed certification statements in accordance with the following:
(1) ``{Applicant's Name{time} hereby claim that the amounts set forth in this section and Sec. 400.712 are correct and due and owing to {Applicant's Name{time} by FCIC under the Federal Crop Insurance Act''; and
(2) ``{Applicant's Name{time} understands that, in addition to criminal fines and imprisonment, the submission of false or fraudulent statements or claims may result in civil and administrative sanctions.'' [70 FR 44236, Aug. 2, 2005]