2023 ARPI SuptStmt ROCIS 7-11-23

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

OMB Number: 0563-0083

TITLE: Area Risk Protection Insurance

PURPOSE:

The purpose for this request to the Office of Management and Budget (OMB) is for renewal approval of Information Collection Burden package 0563-0083. This was previously approved for a three-year period. A notice for the request for public comment on information collections related to renewal of information collection package number 0563-0083 was published in the Federal Register on May 23, 2023.

Impact of Notice on Public Information Collection Burden

The information collection burden applies to producers and insurance companies; the burden on the producer is not the same as the information collection burden on the insurance companies. Some of the data elements collected from the individual producer are the same data elements the insurance companies send to Federal Crop Insurance Corporation (FCIC); however, not all data elements apply to each producer in any given year and some of the data elements that apply to the insurance companies do not apply to producers. Specific circumstances determine which data elements apply. The information collection burden for a producer depends on the crops insured, if it is the first year of a continuous insurance policy contract, if there is a loss, if options are elected to the insurance policy, etc. The producer may have a larger information collection burden the first year by applying for insurance and completing the acreage report. The following years the producer may only have to report acreage and yield information if there is no loss. In the event of a loss, there is an additional information collection burden on the producer. Producers will report specific information by crop for each crop they insure. The insurance companies will generally always have an information collection burden consisting of all the data elements listed because the data elements will be accumulated from each producer who has an insurance policy with that insurance company. Insurance companies will report data elements to FCIC as specifically required by FCIC and as documented in the Appendix III/M-13 Handbook.

A. JUSTIFICATION

1. Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection. Attach a copy of the appropriate section of each statute and regulation mandating or authorizing the collection of information.

Background

FCIC is a wholly-owned Government corporation created February 16, 1938 (7 U.S.C. 1501). The program was amended previously, but Public Law 96-365, dated September 26, 1980, provided for nationwide expansion of a comprehensive crop insurance program. The Federal Crop Insurance Act (Act), as amended in later years, further expanded the role of the crop insurance program to be the principal tool for risk management by producers of agricultural commodities. The Act further required that the crop insurance program operate on an actuarially sound basis. To meet these goals, existing crop programs must be improved and expanded, new crop products developed, and new insurance concepts studied for possible implementation. Meeting these goals requires the collection of a wide range of information (data elements). These data elements are used in part to determine insurance coverage, premiums, subsidies, payments, and indemnities. It creates an information database used to support continued development and improvements in crop insurance products available to producers and which meet the goal of a sound insurance program. The Act was again amended on June 20, 2000, by Public Law 106-224 which mandates changes to crop insurance regulations, provides for independent review of crop insurance products by persons experienced as actuaries and in underwriting, and gives contracting authority for the development of new products.

Justification

Area Risk Protection Insurance (ARPI) includes three separate plans of insurance: 1) Area Revenue Protection (ARP), which protects against price declines and automatically includes Upside Harvest Price Protection (UHPP) which protects against price increases; 2) ARP with the Harvest Price Exclusion, which excludes UHPP and protects against price declines but not against price increases; and 3) Area Yield Protection (AYP), which protects against loss of yield only. The following crops are insured under the ARPI policy and included in this information collection package: barley, corn, cotton, forage production, grain sorghum, soybeans, oysters, popcorn, rice, and wheat.

Under ARPI, FCIC requires producers to submit an annual production report by a date specified in the Special Provisions. This allows FCIC to collect additional information to ensure the data used to calculate the expected yield for the county is the most accurate, credible data available. Many producers already maintain this data. Given the importance of this collection of information to the maintenance and integrity of the program, failure to submit this report will result in the insured’s yield for the crop year being set equal to the expected county yield for purposes of computing the final county yield and no indemnity will be paid to the insured for any area-based loss, either yield or price.

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection.

Crop insurance companies, including their agents, must collect data from producers to submit the required data to the Risk Management Agency (RMA). Insurance companies must obtain enough information so insurability, liability, premium, subsidy, and indemnities can be accurately determined.

Insurance companies are reinsured by FCIC under the Standard Reinsurance Agreement (SRA) and are required to electronically submit specific and accurate data to FCIC.

The information (data) collected may be used by other Federal Agencies, insurance companies reinsured by FCIC, and other agencies that require such information in the performance of their duties. The information may also be furnished to: The Internal Revenue Service, the Department of Justice, or other federal or state law enforcement agencies, credit reporting agencies and collection agencies, and in response to judicial order during litigation. The information requested is elective but is required to obtain or retain crop insurance benefits. The producer must provide accurate and complete data so insurance companies and FCIC can accurately determine liability, subsidy, premium, and the amount of indemnity due a producer, if applicable, and keep the insurance program actuarially sound.

RMA does not develop or distribute forms but creates form standards for the insurance companies to use in collecting the appropriate data for submission to FCIC as required by terms of the Reinsurance Agreements and related documents. Appendix III lists the fields of required data by type/exhibit. Exhibits specify formulas, rounding rules, field edits, descriptions, etc. Insurance companies use this information for programming their IT systems, so information can be submitted to RMA in the correct format. (For information collection purposes, RMA uses the types/exhibits information as the data elements.) Following is a list of the types/data elements/exhibits and a brief explanation of each:

Type 05 – CIMS Request Record – Type 05 records are used to request insured producer data from the Comprehensive Information Management System (CIMS).

Type 09 – Fund Designation Record – Timely acceptance of the Type 09 record is required to establish the eligible crop insurance contract into the Assigned Risk Fund. Any eligible crop insurance contract not designated by the insurance company to the Assigned Risk Fund will be designated to the Commercial Fund. RMA may accept fund designations records after the Actuarial Data Master (ADM) records have been released for the crop.

Type 10 – Policy Record – Type 10 records are used to establish a policy and provide information regarding the policyholder and entities with a Substantial Beneficial Interest, Spouse, Landlord, and Transfer of right to indemnity.

Type 11 – Acreage, Acreage Commodity Record – Type 11 records are used to establish premium and liability for each acreage line.

Type 12 – Payment Record – Type 12 records are used to record/report payments by producers for each eligible crop insurance contract.

Type 14 – Insurance in Force Record – Type 14 records establish the crop, county, plan code and reports the eligible crop insurance contract data determined at sales closing. Type 14 records identify the data elements required for timely reporting of eligible crop insurance contracts.

Type 15 – Yield History Record – Type 15 records are used to record/report Actual Production History (APH) yield information for designated crops.

Type 20 – Loss Total Record – Type 20 records are used to identify the application or disbursement of loss payments.

Type 21 – Loss Line Record – Type 21 records establish the loss amounts for a given eligible crop insurance contract.

Type 26 – Record Production Reporting – This record allows RMA to capture production information being reported by the producer at a lower level than the APH database, which is required to be established on a county/crop/unit/practice/type, and attach the production to a specific land location, such as Common Land Unit (CLU).

Type 27 – Common Land Unit ID Records – Type 27 records are used to record/report up to fourteen corresponding common land unit IDs and associated acres for the Type 11 record.

Type 48 – Delete Record – This record deletes the following record types: P51, P54, P55, P56, P57, and P58.

Type 49 – Delete Record – Type 49 records are used to remove all records for the eligible crop insurance contract from the database(s) and the Dup process.

Type 57 – Quality Control Reporting Record – Type 57 records are required for all Appendix IV reviews.

Type 75 – Records Producer Certification Record – Type 75 records allow RMA to capture the Beginning Farmer and Rancher application information submitted by Approved Insurance Providers (AIP).

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adapting this means of collection. Also describe any consideration of using information technology to reduce burden.

In compliance with section 508(a)(5) of the Act, the Corporation to the maximum extent practicable, shall allow producers and insurance companies to use electronic methods to submit information required by the Corporation.

The insurance companies, under the oversight of FCIC, offer service delivery functions over the Internet. Internet-based services provided by these entities will be offered as an alternative to traditional paper-based delivery mechanisms, which are primarily based on face-to-face interaction between producers and insurance agents. FCIC continuously works with insurance companies to ensure timely implementation with all statutory requirements. FCIC routinely works in conjunction with the Farm Service Agency (FSA), Natural Resources Conservation Service (NRCS), and Rural Development (RD) to fully integrate web-based information systems known as Acreage Crop Reporting Streamlining Initiative (ACRSI) (0563-0084).

The Office of Management and Budget through their authority under the Paperwork Reduction Act of 1995 and e-Government, Congress, and other USDA stakeholders have defined expectations for USDA’s performance in carrying out the requirements of the legislated directives. These expectations address the quality of USDA’s effort in providing the electronic service delivery alternative. Some of the expectations reflect the “best practices” of commercial e-commerce service providers in that their service delivery practices tend to raise the expectations of the customers that will also take advantage of the services provided by USDA and insurance companies.

Insurance companies that sell and service crop insurance, and crop insurance service organizations, generate computer forms used to collect data elements in accordance with FCIC’s information collection standards. Insurance company representatives and agents send the information they collect to the insurance companies electronically or by hard copy documents. This information is entered into insurance company databases and is used by the insurance company to sell, service, underwrite, train, and develop new products. Insurance companies use computer programs that process information in a format compatible with FCIC’s automated systems. This enables insurance companies to report required data elements to FCIC electronically. Some insurance companies have computer systems programmed to automatically send the data by a specific time each day, while other insurance companies send the information less frequently. FCIC has established deadlines for receiving information or penalties apply. This information is used to determine expenses of the Corporation including premium subsidies, indemnities, administrative and operating expenses of the insurance companies, and other administrative and operating expenses of the Corporation.

Now insurance companies may or may not be exchanging data electronically with their insurance agents or accepting electronically submitted data from individual producers. Any person wishing for additional information may contact an insurance company or insurance agent listed on RMA’s web site at: http://www.rma.usda.gov/.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposed described in Item 2 above.

Some of the same data, such as certain producer information, may be required under different plans of insurance and policies. However, once such information is provided by the producer it is used for all applicable plans of insurance and policies without the producer being required to provide the same information multiple times. An exception would apply if the producer insured different crops with different insurance companies, which would require the producer to provide some of the same information to each insurance company because of barriers in sharing certain producer data between insurance companies.

FSA and RMA share many common producers because many of the same producers participate in both FSA and RMA programs. Currently, those producers may be required to report much of the same information to both FSA and RMA. Possible duplicate information may include crop, acreage and production data and producer data, such as names, addresses, and identification numbers.

Since 2004, the RMA and FSA have jointly worked on the CIMS project. CIMS provides a single, centralized repository of RMA and FSA information for use by authorized agencies and the insurance companies to meet their program administration data needs. CIMS supports information requests, assist in timely identification of possible reporting errors, reduce fraud and abuse vulnerabilities, reduce costs associated with data collection, and improve overall program integrity in the respective agency programs.

While CIMS has not eliminated producers from providing some of the same information to both FSA and RMA, approved USDA users can utilize CIMS web applications to access available data. CIMS also provides a tool that has proven helpful to state and county FSA offices and insurance companies as they review and process information required for program participation. The CIMS process builds data marts of differences between RMA and FSA producer reported data on entity/business type and crop acreage.

CIMS makes these differences available to the responsible program authority for reconciliation using current program authorities, processes, and procedures. In addition, RMA, FSA, and other USDA agencies that share common producers and data are engaged in a Departmental level project to establish data standards for common information used for producer commodity reporting to USDA. The ACRSI objectives include standardizing information collection requirements, developing common producer, land, and crop identifiers; and an electronic medium that allows applicable agencies immediate access to the information upon producer certification. The reporting requirements regarding ACRSI are covered under Information Collection Burden package 0563-0084.

5. If the collection of information impacts small business or other small entities (Item 5 of OMB 83-1), describe any methods used to minimize burden.

The information collection requirements involve producers of agricultural products who are insured and insurance companies reinsured by FCIC, which includes their agents and representatives. The burden of the information collection will vary depending on whether the producer cancels the insurance coverage then reapplies, whether options are elected, the number of crops insured, if the producer has a first and second crop on the same acreage in the same crop year, etc. RMA strives to minimize the reporting burden but must collect enough information to keep the crop insurance program actuarially sound as mandated by the Act.

5. Describe the consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.

If specific information is not collected by the specified dates, the producer may not have insurance coverage or the amount of insurance may be reduced. The crop insurance program would not be administered in an actuarially sound manner if specific information (data) were not collected by the established dates. As producers change the crops and where crops are planted each year, less frequent collection of data would jeopardize actuarial soundness, and result in inaccurate premium charges to producers.

If producers and insurance companies did not submit the required data at the specified time, accurate liabilities, premium, and subsidies may not be determined, errors may not be resolved timely, producers may not receive accurate indemnities, payments may be late, crop insurance may not be actuarially sound as mandated in the Act.

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

Requiring respondents to report information to the agency more often than quarterly;

Insurance companies must submit specific required data to RMA on a weekly, monthly, and annual basis. The information collection activities contained herein are not collected more frequently than quarterly from producers.

Requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it;

FCIC does not require the respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it.

Requiring respondents to submit more than an original and two copies of any document;

The respondents are not required to submit more than an original and two copies.

Requiring respondents to retain records, other than health, medical, government contract, grant-in-aid, or tax records for more than 3 years;

Insurance companies maintain records longer than three years as a normal business practice. Producers normally maintain records for an indeterminate amount of time because of income tax obligations.

In connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study;

No statistical survey is conducted by these collections.

Requiring the use of a statistical data classification that has not been reviewed and approved by OMB;

No statistical data classification that has not been reviewed and approved by OMB is used.

That includes a pledge of confidentiality that is not supported by authority established in statue or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use; or

A pledge of confidentiality is not required.

Requiring respondents to submit proprietary trade secret, or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information’s confidentiality to the extent permitted by law.

No proprietary trade secrets or other confidential information are requested.

8. If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency’s notice, required by 5 CFR 1320.8 (D) soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and record keeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.

Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every 3 years even if the collection of information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.

A notice requesting public comments was published in the Federal Register on May 23, 2023.

No comments were received.

The names and contact details from the consultation with representatives is as follows:

Don Hutsell, National Crop Insurance Services, 913.685.5459

Luanna Shuck, Rural Community Insurance Services, 605.575.6659

Bryant Tjeerdsma, Farmer’s Mutual Hail, 800.247.5248

9. Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.

A payment or gift will never be provided to respondents for providing the information requested for this crop insurance program.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.

The data that is collected is handled according to established RMA procedures for implementing the Privacy and Freedom of Information Act. The information collections comply with the Privacy Act of 1974 and OMB Circular A-130, Responsibilities for the Maintenance of Records About Individuals by Federal Agencies.

10. Provide additional justification for any questions of a sensitive nature, such as sexual behavior or attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.

No questions of a sensitive nature are contained in these data elements.

10. Provide estimates of the hour burden of the collection of information. Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated.

FCIC estimates there are 14,185 respondents for approved insurance providers and 1,324 producer respondents for a total of 15,509 respondents. The estimated annual public burden of 91,679 hours divided by 15,509 projected respondents gives an average burden of 5.9 hours per year for each respondent.

Cost to Respondents: The estimated total burden cost is $1,946,487 per year.

The hourly wage¹ for each respondent was estimated as follows:

45-2011 Agricultural Inspectors $22.80

41-3021 Insurance Sales Agent $33.34

13-2053 Insurance Underwriter $38.43

11-9013 Farmers, Ranchers, and Other $37.71

Agricultural Managers

43-9061 Office Clerk-General $18.75

13-2011 Accountants and Auditors $40.37

15- 1252 Software Developers $58.17

Ins. Sales Agent/Farmer and Rancher $35.53

Ins. Sales Agent/Ins. Underwriter/Farmer $36.49

Ins. Sales Agent/Office Clerk $26.05

Ins. Sales Agent/Ins. Underwriter/Office Clerk $30.17

Ins. Sales Agent/Ins. Underwriter/Farmer/Ag. Insp. $33.07

10. Provide estimates of the total annual cost burden to respondents or record keepers resulting from the collection of information, (do not include the cost of any hour burden shown in items 12 and 14). The cost estimates should be split into two components: (a) a total capital and start-up cost component annualized over its expected useful life; and (b) a total operation and maintenance and purchase of services component.

There is no total capital and start-up cost component (annualized over its expected useful life) associated with this collection.

The total operation and maintenance and purchase of services component is associated with this collection. AIPs sell and service Federal crop insurance policies in every state through a public-private partnership. FCIC reinsures the AIPs who share the risks associated with catastrophic losses due to major weather events (further explained in questions above). Often, insurance companies cover other insurance such as property casualty and business insurance. Crop insurance is a niche business that requires a separate system. Agents who sell and service the program are often specialized, and those operation, maintenance, and purchase of services are included in this collection.

The insurance companies report that the average yearly expenses are approximately 5.00 percent of gross premium.

The total premium for the 2022 reinsurance year for ARPI was approximately $55.95 million. The costs of reporting data, processing data, and software programming would equate to $2.80 million.

10. Provide estimates of annualized cost to the Federal government. Provide a description of the method used to estimate cost and any other expense that would not have been incurred without this collection of information.

The information is collected from policyholders by the insurance companies through their representatives and agents. Insurance companies are required to submit specific data to RMA in accordance with Appendix III and the Reinsurance Agreements. RMA estimates it will cost the Federal Government $669,763 annually to directly receive, store, and format the data from the insurance companies that they have collected for ARPI. Of this amount $28,600 is for hardware to receive the information, $316,238 is for maintenance and operations of the hardware, $274,967 is for application, programming, and database loads for Reinsurance Accounting System/FCIC Policy Acceptance and Storage System (RAS/PASS), and $49,958 is for Federal employee salaries to resolve errors, expense reimbursements, and loss payments.

These costs are annual costs to manage and operate the Federal crop insurance program. RMA’s business support system environment is a fluid environment. Program changes are made to existing program. Legislative changes impact the program included in this collection. IT hardware, development and maintenance costs will be expended year over year for this program.

10. Explain the reasons for any program changes or adjustments reported in Item 13 and 14 of the OMB Form 83-I.

The total cost to respondents decreased from $2,742,419 to $1,946,487 for a decrease of $795,932. The burden reduced from 80,234 to 57,047 for a decrease of 23,277 burden hours. The decrease in costs and burden hours is due to less respondents than in previous years. Fewer farmers are purchasing ARPI policies than in prior years.

10. For collections of information whose results are planned to be published, outline plans for tabulation and publication.

Participation data is used by FCIC to make programmatic recommendations and changes, to determine administrative and operating and premium subsidy expenses of the Corporation, and determine producer guarantees, premium, and any applicable indemnities. The data is not planned for publication. RMA publishes a Summary of Business on their website, which includes a variety of reports, data files, and an application that provides insurance experience for commodities grown and insured. This includes the most current information, national reports, and the ability to create ad-hoc queries. Data for the past five years, is updated each Monday with a collection period cutoff every Friday, includes all the business data that has been validated and accepted throughout the previous week. Data prior to the past five years is static and no longer updated.

10. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

RMA does not produce or distribute forms, therefore, there is no request to not display an expiration date on forms.

10. Explain each exception to the certification statement identified in Item 19 “Certification for Paperwork Reduction Act.”

This information collection meets the certification requirements of SF-83-I, Item 19.

B. COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS

The information collections represented in this docket do not employ statistical methods.

11. Information obtained from the Office of Personnel Management at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2023/KC.pdf. Information obtained from the Bureau of Labor Statistics at http://www.bls.gov/oes/current/oes_nat.htm.

12