Sec. 11010. Reinsurance
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/bill/118/hr/8467/ih/section-11010·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 508(k) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k) ) is further amended by adding at the end the following: In addition to the terms and conditions of the Standard Reinsurance Agreement, to cover additional expenses for loss adjustment procedures, the Corporation shall pay an additional administrative and operating expense subsidy to approved insurance providers for eligible contracts. In the case of an eligible contract, the payment to an approved insurance provider required under subparagraph
(A)shall be the amount equal to 6 percent of the net book premium. In this paragraph: The term eligible State means a State— identified in State Group 2 or State Group 3 (as defined in the Standard Reinsurance Agreement for reinsurance year 2025); and in which, with respect to an insurance year, the loss ratio for eligible contracts is greater than 120 percent of the total net book premium written by all approved insurance providers. The term eligible contract — means a crop insurance contract entered into by an approved insurance provider in an eligible State; and does not include a contract for— catastrophic risk protection under subsection (b); an area-based plan of insurance or similar plan of insurance, as determined by the Corporation; or a policy under which an approved insurance provider does not incur loss adjustment expenses, as determined by the Corporation. . Section 508(k) of the Federal Crop Insurance Act ( 7 U.S.C. 1508(k) ) is further amended by adding at the end of the following: Beginning with the 2025 reinsurance year and for each reinsurance year thereafter, the rate of reimbursement to approved insurance providers for administrative and operating expenses with respect to crop insurance contracts covering agricultural commodities described in section 101 of title I of the Specialty Crops Competitiveness Act of 2004 ( 7 U.S.C. 1621 note) shall be equal to or greater than the percent that is the greater of the following: 17 percent of the premium used to define loss ratio. The percent of the premium used to define loss ratio that is otherwise applicable for the reinsurance year under the terms of the Standard Reinsurance Agreement in effect for the reinsurance year. In carrying out subparagraph (A), the Corporation shall not reduce, with respect to any reinsurance year, the amount or the rate of reimbursement to approved insurance providers under the Standard Reinsurance Agreement described in clause
(ii)of such subparagraph for administrative and operating expenses with respect to contracts covering agricultural commodities that are not subject to such subparagraph. With respect to the 2022 through 2024 reinsurance years, in addition to the amount of reimbursement for administrative and operating expenses available for crop insurance contracts described in subparagraph (A), the Corporation shall use $50,000,000, to remain available until expended, to pay, with respect to such contracts, an amount that is equal to the difference between— the amount to be paid pursuant to the Standard Reinsurance Agreement for the applicable reinsurance year; and the amount that would be paid if such contracts were— not subject to a reduction described in subsection (a)(2)(G) of section III of the Standard Reinsurance Agreement; and subject to a reimbursement rate equal to 17 percent of the net book premium. The requirements of this paragraph and the adjustments made pursuant to this paragraph shall not be considered a renegotiation under paragraph (8)(A). Beginning with the 2025 reinsurance year and for each reinsurance year thereafter, the Corporation shall increase the total administrative and operating expense reimbursements otherwise required under the Standard Reinsurance Agreement in effect for the reinsurance year in order to account for inflation in a manner that is consistent with the increases provided with respect to the 2011 through 2015 reinsurance years under the enclosure, included in the Risk Management Agency’s Bulletin, MGR–10–007, dated June 30, 2010. The increase described in subparagraph
(A)shall— apply with respect to all contracts covering agricultural commodities that were subject to an increase during the period of the 2011 through 2015 reinsurance years under the enclosure described in such subparagraph; and not be considered a renegotiation under paragraph (8)(A). The increase described in subparagraph
(A)for the 2025 reinsurance year shall not exceed the percentage change from the preceding year included in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor. .
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