General Administrative Regulations; Subpart L–Reinsurance Agreement–Standards for Approval; Regulations for the 2019 and Subsequent Reinsurance Years
Proposed rule.
CFR Part: "7 CFR Part 400"
RIN Number: "RIN 0563-AC54"
Citation: "83 FR 5573"
Document Number: "Docket No. FCIC-17-0005"
Page Number: "5573"
"Proposed Rules"
SUMMARY: The
DATES: Written comments and opinions on this proposed rule will be accepted until close of business
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: http://www.regulations.gov. Follow the instructions for submitting comments.
* By Mail to: Director,
All comments received, including those received by mail, will be posted without change to http://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 http://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 http://www.regulations.gov/#!privacyNotice.
FOR FURTHER INFORMATION CONTACT:
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.
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
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 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
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.
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,
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:
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]
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
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.
(a) The eighteen qualification ratios include:
(1)
(2) Three ratios used by
(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 Surplus <900% (2) Net Premium Written to Policyholders Surplus <300% (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 Surplus <40% (10)One Year Reserve Development to Policyholders Surplus <20% (11)Two Year Reserve Development to Policyholders Surplus <20% (12) Estimated Current Reserve Deficiency to Policyholders <25% 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 Surplus -10% to 25% (18) Risk Based Capital Ratio >200%
The standards contained herein shall be applicable to a Company applying for and those maintaining 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
(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.
(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
(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 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
(d) Appealable final administrative determinations of the FCIC under paragraph (a) or (b) of this section may be appealed to the
Signed in
Acting Manager,
[FR Doc. 2018-02489 Filed 2-7-18;
BILLING CODE 3410-08-P
MEDNAX Reports Fourth Quarter GAAP EPS of $1.46
Proposed Submission of Information Collection for OMB Review; Comment Request; Survey of Nonparticipating Single Premium Group Annuity Rates
Advisor News
- DOL proposes new independent contractor rule; industry is ‘encouraged’
- Trump proposes retirement savings plan for Americans without one
- Millennials seek trusted financial advice as they build and inherit wealth
- NAIFA: Financial professionals are essential to the success of Trump Accounts
- Changes, personalization impacting retirement plans for 2026
More Advisor NewsAnnuity News
- F&G joins Voya’s annuity platform
- Regulators ponder how to tamp down annuity illustrations as high as 27%
- Annual annuity reviews: leverage them to keep clients engaged
- Symetra Enhances Fixed Indexed Annuities, Introduces New Franklin Large Cap Value 15% ER Index
- Ancient Financial Launches as a Strategic Asset Management and Reinsurance Holding Company, Announces Agreement to Acquire F&G Life Re Ltd.
More Annuity NewsHealth/Employee Benefits News
- After enhanced Obamacare health insurance subsidies expire, the effects are starting to show
- CommunityCare: Your Local Medicare Resource
- AG warns Tennesseans about unlicensed insurance seller
- GOVERNOR HOCHUL LAUNCHES PUBLIC AWARENESS CAMPAIGN TO EDUCATE NEW YORKERS ON ACCESS TO BEHAVIORAL HEALTH TREATMENT
- Researchers from Pennsylvania State University (Penn State) College of Medicine and Milton S. Hershey Medical Center Detail Findings in Aortic Dissection [Health Insurance Payor Type as a Predictor of Clinical Presentation and Mortality in …]: Cardiovascular Diseases and Conditions – Aortic Dissection
More Health/Employee Benefits NewsLife Insurance News
- Baby on Board
- Kyle Busch, PacLife reach confidential settlement, seek to dismiss lawsuit
- AM Best Revises Outlooks to Positive for ICICI Lombard General Insurance Company Limited
- TDCI, AG's Office warn consumers about life insurance policies from LifeX Research Corporation
- Life insurance apps hit all-time high in January, double-digit growth for 40+
More Life Insurance News