February 6, 2015 1

Actuarial Review of the APH Yield Exclusion Program

Prepared by National Crop Insurance Services, Inc.

National Crop Insurance Services (NCIS) is an international not-for-profit organization representing the 

interests of private crop insurance companies. In its capacity as the advisory organization for the crop 

insurance industry, NCIS has reviewed the report entitled “Review of Adjustment in Actual Production 

History to Establish Insurable Yields; Determination of Actuarially Sound Premium Rates” prepared by 

Sumaria Systems, Inc. on behalf of USDA Risk Management Agency.

Executive Summary

The ability of producers to obtain higher levels of protection through the APH Yield Exclusion program 

than are currently available introduces an unprecedented degree of risk into the Federal Crop Insurance 

Program. Even though RMA is currently revising its existing rating procedures in response to the higher 

effective coverage levels the program makes available to producers, it is highly uncertain that the 

proposed methodology will generate appropriate rates for effective coverage levels well in excess of the 

maximum coverage levels currently available to producers. The proposed rating methodology for Yield 

Exclusion is not well supported, nor has the Sumaria study investigated relevant considerations such as 

the increased financial risk placed on participating insurers. This review identifies several problems with 

the existing rating structure and ratemaking methodology as well as issues with the proposed Yield 

Exclusion rating methodology that call into question the accuracy of the rates. In addition, this response 

points out the need for testing the consistency of the marginal rates implicit in the proposed Yield 

Exclusion rating methodology as well as the need to evaluate the proposed rating methodology on the 

existing book of business. From the perspective of the participating insurers, high effective coverage 

levels will increase claim frequency and indemnities as well as the variability of program experience, 

with large increases in claim frequency occurring in years with only modest reductions in yields. The 

availability of high effective coverage levels also increases the potential for adverse selection and moral 

hazard, neither of which is adequately addressed through RMA’s rating methodology or the Sumaria 

review.

Introduction

The APH Yield Exclusion procedure allows producers to exclude actual yields from their actual 

production history for any years RMA has designated as being excludable. Years are eligible for 

exclusion if the average planted yield for the county was 50 percent or less of the simple average for the 

previous ten consecutive cropyears. The same year is also eligible for exclusion in all contiguous 

counties. The Yield Exclusion procedure applies to both Buy-up and Catastrophic Risk Protection forms 

of coverage under the Yield Protection, Revenue Protection, and Revenue Protection with Harvest Price 

Exclusion plans of insurance with a contract change date on or after November 30, 2014 and applies to 

the following spring 2015 crops: corn, soybeans, cotton, grain sorghum, spring wheat, spring barley, 

spring canola, rice, sunflowers, peanuts, and popcorn. Yield exclusion will become available for fall 

crops starting with the 2016 cropyear. 
February 6, 2015 2

The ability to exclude prior yields provides producers the opportunity to increase the APH used to 

establish their guarantees. Consider the example of a producer who has the option to exclude 7 of the 

10 actual yields in his yield history. If the producer had low yields in 6 of the 7 years and chooses to 

exclude those 6 years, his adjusted APH is recomputed based on the remaining 4 yields. For example, 

suppose the producer has an APH of 100 bushels per acre and an adjusted APH after Yield Exclusion of 

140 bushels. If the producer purchases coverage at the 80% coverage level, Yield Exclusion increases 

the producer’s guarantee from 80 bushels to 112 bushels. As this illustrates, the producer’s revised 

guarantee following Yield Exclusion may exceed his unadjusted APH. In this example, the producer has 

an effective coverage level of 112%, calculated as the ratio of his revised guarantee of 112 bushels to his 

unadjusted APH of 100 bushels versus an elected coverage level of 80%. Throughout the remainder of

this report, all references to effective coverage level will be understood to be the ratio of the producer’s 

revised guarantee after Yield Exclusion to his unadjusted APH prior to Yield Exclusion.

The Sumaria discussion notes that RMA’s proposed rating method for Yield Exclusion is based on the 

principle that “the same premium should be charged for a given yield guarantee on a policy unit no 

matter whether the guarantee is derived from a simple average of APH yields or from an average of 

yields with Trend Adjustment or Yield Exclusion” (p.4). For example, a producer with an unadjusted APH 

of 120 bushels at the 85% coverage level would have a guarantee of 102 bushels. If the same producer 

has an adjusted APH of 136 bushels after Yield Exclusion and selects the 75% coverage level, the 

guarantee is again 102 bushels. Under the proposed rating method the premium for the two scenarios 

should be identical. In those situations where the producer’s effective coverage level after Yield 

Exclusion falls between two coverage levels offered by RMA, the producer’s rate at the effective 

coverage level is obtained by interpolating the rates between the two existing coverage levels. If the 

producer’s effective coverage level exceeds the maximum coverage level offered in that county, the 

proposed rating method determines the producer’s rate using a linear extrapolation based on the rates 

for the two highest coverage levels.

A variety of actuarial issues arise out of the introduction of the Yield Exclusion procedure. Among the 

issues the Sumaria report should have been expected to address1 were (1) whether RMA had properly 

identified the Primary and Contiguous counties, (2) whether the implementation of the rating procedure 

in RMA’s Cost Estimator is consistent with the recommended rating methodology, (3) an evaluation of 

the impact of Yield Exclusion on the program as a whole, (4) whether RMA’s existing rating methodology 

is appropriate across the entire population or whether rate adequacy differs within segments of the 

program, (5) a discussion of alternative methodologies for establishing rates for producers who elect to 

exclude yields, (6) an evaluation of the alternative rating methodologies, (7) tests of the accuracy of the 

proposed rating methodology, (8) the increased potential for adverse selection and moral hazard within 

the insured population, (9) the impact of the Yield Exclusion program on the financial risk of the 

Approved Insurance Providers, and (10) an evaluation of the options to mitigate that risk. Most of these 

issues were not considered in the Sumaria report. The report primarily consisted of a recommendation 

for the proposed rating methodology and related implementation issues. 

 

1

The remainder of this response is structured to loosely parallel the items in this list. 
February 6, 2015 3

The importance of the issues identified above is emphasized in the Statement of Principles Regarding 

Property and Casualty Insurance Rating of the Casualty Actuarial Society, which states that “proper 

actuarial procedures be employed to derive rates that protect the insurance system’s financial 

soundness and promote equity and availability for insurance consumers.” The threats to the financial 

soundness of the program arise from the need to establish rates for effective coverage levels well in 

excess of any experience collected by RMA in past years; the possibility that the producer’s guarantee 

may approach or exceed the producer’s average yield, particularly in light of RMA’s reluctance in earlier 

years to make high coverage levels available to producers due to the increased potential for adverse 

selection and moral hazard; the magnitude of the increase in APH for individual producers resulting 

from Yield Exclusion; and the volume of business affected by the change. To address these concerns, 

NCIS prepared its own analysis of the Yield Exclusion procedure. While the materials developed by NCIS 

are too extensive to include here, the following discussion provides an abbreviated review of the results 

from that analysis.

Identification of Primary and Contiguous Counties

One of the more basic issues related to the implementation of the Yield Exclusion procedure is whether 

the designations of Primary and Contiguous counties have been properly identified. Since RMA has not 

released the county average yields by crop, irrigation practice, and cropyear that it used to identify 

Primary counties, we are not able to verify whether those designations are accurate.

The only information released by RMA in regard to Primary and Contiguous county designations is a 

table of excludable years by crop, irrigation practice, and cropyear for 1995 through 2013. The table 

also classifies each exclusion as either Primary or Contiguous. Based on this information, NCIS prepared 

countrywide maps separately for each crop, irrigation practice, and cropyear to evaluate whether the 

RMA designation of Contiguous counties is consistent with the NCIS designation of Contiguous counties

used in its Crop-Hail loss cost analyses. A sample map is included below. While the RMA designations 

are correct in a large majority of cases, a number of anomalies have been identified. The errors include 

Primary counties not fully enclosed by Contiguous counties; Contiguous counties not adjacent to a 

Primary county; Contiguous counties on the opposite side of Lake Michigan from the Primary county;

and duplication of county designations in consecutive years. While these may not be material flaws in 

the program, RMA has a responsibility to ensure that Primary and Contiguous counties are properly 

identified.

The complete collection of maps can be found at the following link:

http://www.ag-risk.org/NCISPUBS/MPCIYieldExclusion/MPCIyieldexclusion.htm
February 6, 2015 4

Testing the RMA Cost Estimator

NCIS conducted tests of the RMA Cost Estimator to evaluate whether the proposed rating methodology 

has been properly implemented. As stated in the Sumaria report, the rate is to be interpolated between 

existing coverage levels whenever the effective coverage level as previously defined is less than the 

maximum coverage level offered in the county. For higher effective coverage levels the rate is to be 

determined based on a linear extrapolation of the rate at the two highest coverage levels. Since the 

rate at each coverage level is obtained by adjusting the base rate at the 65% coverage level by the 

appropriate Coverage Level Relativity and Unit Residual Factor, the NCIS tests focused on how these 

factors vary as a function of the effective coverage level. The review found that Coverage Level 

Relativities and Unit Residual Factors are interpolated between coverage levels, consistent with the 

proposed methodology. The review also found that Coverage Level Relativities are extrapolated to 

higher effective coverage levels. However, as indicated in the following chart, Unit Residual Factors are 

not extrapolated beyond the 85% coverage level. Since Unit Residual Factors2should increase as the 

coverage level increases, it is expected that these factors should continue to increase for effective 

coverage levels in excess of 85%. The fact that the Unit Residual Factors are not being extrapolated 

beyond 85% suggests that the Cost Estimator underrates producers with high effective coverage levels. 

RMA and Sumaria should clarify whether the capping of the Unit Residual Factors was intentional or 

whether the proposed rating methodology was implemented incorrectly in the Cost Estimator. 

 

2

If Unit Residual Factors are intended to represent an endogenous risk adjustment for moral hazard and adverse selection, the factors should 

increase as coverage increases, particularly at high coverage levels. However, the Sumaria report provides no discussion of the method used 

to develop the factors nor does it provide a test of their adequacy or accuracy.
February 6, 2015 5

NCIS conducted a second test of the RMA Cost Estimator to determine whether the producer’s rate for a 

selected guarantee was unaffected by the producer’s choice to use Yield Exclusion or not. The following 

example identifies a small inconsistency in the rates. The source of the discrepancy is a step in the 

calculation that computes the minimum of the estimated Yield Exclusion Proration Factor and 0.99. The 

error documented here was corrected by RMA later on the same day that NCIS identified the error. 

NCIS is aware that AIPs have been in contact with RMA about a number of rating errors in the Cost 

Estimator. Modifications to the Cost Estimator at this late date are a clear indication that the proposed 

rating methodology was not adequately tested prior to the release of the Cost Estimator in December 

2014. The initial premium calculation documents (PASS records) were issued by RMA in draft form in 

late October 2014. On December 17, 2014, RMA added a new section to the Yield Exclusion premium 

calculation record. In January 2015, additional changes were made to the new section. Further 

revisions were released for comment in early February 2015. The latest copy of the P11-1 Premium 

Calculation document is attached. The last two pages of the document show the most recent changes 

highlighted in yellow. The most recent release notes from the PASS test release are also attached, and 

include several changes for Yield Exclusion. Provided that testing goes well these changes will be 

pushed into production on February 18, just 10 days prior to the February 28 Sales Closing Date. This is 

clearly far from the ideal approach for implementing a new program.

0.900

0.950

1.000

1.050

1.100

1.150

1.200

0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 Unit Residual Factor

Coverage Level

RMA Unit Residual Factors for Yield Exclusion

as used in RMA's Cost Estimator 

(Texas Non-Irrigated Cotton, Bosque County, County Base Rate = 0.076)

RMA Unit Residual

Factor at 50-85%

Coverage Level

RMA Unit Residual

Factor for YE
February 6, 2015 6

Base Premium Rate with and without Yield Exclusion at the same Effective Coverage Level

(Saline County, Kansas, Non-Irrigated Corn)

Source: RMA Cost Estimator

Yield 

Exclusion Rate Yield

Nominal 

Coverage 

Level

Approved 

Yield

Adjusted 

Yield Guarantee

Effective 

Coverage 

Level

Base 

Premium 

Rate

Y 59 50% 102.0 60 51 85% 0.240146

N 59 85% 60 51 85% 0.242571

From a broader perspective, a review of the RMA Cost Estimator reveals extensive changes from prior 

years in the calculations used to determine the premium. Due to the increased complexity of the rating 

calculations, NCIS is not able to verify the accuracy of the premium calculations without extensive 

testing. Unless the person performing the rating is well-versed in how to determine the appropriate 

parameters to enter into the Cost Estimator, rating errors are likely to be more prevalent than in past 

years.

Impact of Yield Exclusion on the Program

An evaluation of the impact of Yield Exclusion on the program is an essential aspect of an actuarial 

review in order to “protect the insurance system’s financial soundness and promote equity and 

availability for insurance consumers.” The reason for concern is that the Yield Exclusion procedure 

allows producers to purchase higher effective coverage levels than were ever available in the past. RMA 

does not have any historical experience at higher coverage levels to support the rating for the Yield 

Exclusion option beyond the 85% coverage level. However, the ability to exclude lower yields raises the 

possibility that producers may be able to insure at an effective coverage level in excess of 100% of the 

producer’s unadjusted APH. It is our understanding that RMA has been hesitant in past years to offer

high coverage levels to producers due to the greater likelihood of adverse selection and the increased 

potential for moral hazard due to the reduced incentive for producers to properly care for the crop 

under the knowledge that any shortfall would be indemnified by the insurer. We are not aware of any 

aspect of the Yield Exclusion procedure that mitigates these concerns, yet the Sumaria report provides 

no discussion or analysis of this issue. 

The impact of the Yield Exclusion procedure on the program as a whole can be evaluated based on a 

review of the RMA table of excludable years, the premiums by crop and county from RMA’s Summary of 

Business, and from the NASS planted acreage and production data by crop, county, practice, and year. 

The major concerns identified through this review are the large number of counties affected by the Yield 

Exclusion procedure; the large number of excludable years in many of the affected counties; the 

clustering of these counties in limited geographic regions; the large share of program premium written 

in these counties; and the large increases in effective coverage levels for individual producers within 

these counties. 

The following table summarizes the number of counties with one or more excludable years from 1995 

through 2013 (note: 1995 is the earliest eligible year under the Yield Exclusion procedure) based on 

information provided in RMA’s Yield Exclusion table. A large number of counties are affected by the 

Yield Exclusion procedure. The Non-Irrigated practice is affected to a much greater extent than the 
February 6, 2015 7

Irrigated Practice, with more than half of all counties for Corn, Cotton, Grain Sorghum, Peanuts, 

Soybeans, and Sunflowers having one or more excludable years.

Number of Counties for which Yield Exclusion applies in 2015

Source: RMA Yield Exclusion and ADM tables

Practice Barley Canola Corn Cotton

Grain 

Sorghum Peanuts

Popcorn RiceSoybeansSunflowers Wheat

Irrigated 155 0 394 173 279 50 16 18 263 61 15

Non-Irrigated 360 31 1,761 537 784 122 56 0 1,218 227 90

Number of Counties where the Crop is Insurable in 2015 for either Practice

Counties 948 278 2,484 730 1,186 149 265 135 2,086 329 2,276

Another perspective on these results can be obtained from the distribution of the number of counties 

shown in the table above based on the number of excludable years. For Non-Irrigated Corn, 1,761 

counties have one or more excludable years. Of these, 40 counties have 10 or more excludable years, 

seven of which have 12 excludable years over the 19 year period, as shown in the following table. 

Frequency Distribution

Non-Irrigated Corn

Source: RMA Yield Exclusion table

Number of 

Excludable 

Years

Number of 

Affected US 

Counties

1 504

2 377

3 227

4 170

5 132

6 123

7 92

8 72

9 24

10 25

11 8

12 7

The largest number of excludable years for any crop over the 19 year period from 1995 through 2013 is 

15. Three counties for Non-Irrigated Grain Sorghum fall into this category. Frequency distributions for 

all other crops and practices are available at the link indicated above. 

One point worth noting is that since each producer’s APH database includes at most 10 years of 

historical yields, it may be possible for certain producers to exclude every year from their own history. 

Provided that the producer has 4 or more years of actual yields, 100% of each year’s T-Yield would be 

used in place of the excluded yields. In some cases, the T-Yield could exceed the highest value in the 

producer’s yield history. In this situation, the producer’s adjusted APH after Yield Exclusion could 

exceed any of his historical yields. This would virtually ensure that the producer would receive an 

indemnity under the current year’s policy. This violates the one of the most basic principles of 
February 6, 2015 8

insurance, that losses are random from the perspective of the insured, and undermines the ability of the 

insurance mechanism to effectively pool risk.

The following map presents the frequency distribution for Non-Irrigated Corn shown above in a different

format. The map indicates that Iowa and Illinois will be only marginally affected by the Yield Exclusion 

procedure, while central and western Kansas and Nebraska and several other areas will be significantly

impacted. Maps for all other crops and practices are available at the link indicated above.

For Non-Irrigated Cotton, the counties with large numbers of excludable years also generate a large 

portion of the total premium for the crop. This is consistent with the observation that these are riskier 

counties that also tend to have high rates. The following table shows that the bulk of the premium for 

Non-Irrigated Cotton is written in counties with 10 or more excludable years3. Premium distributions for 

all other crops and practices are available at the link indicated above.

Premium Distribution

Non-Irrigated Cotton

Source: RMA Yield Exclusion table 

and RMA Summary of Business

Number of 

Excludable Years Premium

1 48,575,534

2 32,882,144

3 33,335,143

4 29,737,054

5 23,372,091

6 40,715,554

 

3

The premium distribution is estimated from RMA Summary of Business data. The calculations are not precise because the Summary of 

Business provides the combined premium for the Irrigated and Non-Irrigated practices rather than separate premiums by practice.
February 6, 2015 9

7 19,106,618

8 30,757,339

9 9,320,697

10 21,590,452

11 59,888,693

12 168,998,509

13 40,900,543

14 134,166,997

15 27,167,197

Producers in counties with zero excludable years are entirely unaffected by the Yield Exclusion 

procedure. In all other counties, the increase in a producer’s APH depends on the number of years the 

producer is allowed to exclude. For any producer, the APH database includes as many as 10 years of 

yield history. The Yield Exclusion procedure may allow a producer to exclude from 1 to 10 of these 

yields, going back as far as 1995. Consequently, the actual increase in APH from excluding past yields 

will differ for each individual. However, NCIS does not have access to RMA’s Yield History database, 

which prevents us from evaluating the impact of Yield Exclusion on individual producers or on all 

producers collectively. 

As an alternative to a detailed analysis, NCIS has developed an estimate of the impact of Yield Exclusion 

on the average APH for a county by comparing the average NASS county yield after Yield Exclusion to 

the average NASS county yield for all years4. This can be viewed as being a proxy for the average 

increase in producers’ APH due to Yield Exclusion. Under the assumption that the producer retains the 

previous year’s coverage level selection, the ratio also represents the potential increase in effective 

coverage level as well as the increase in liability due to Yield Exclusion. Countrywide maps of the impact 

of Yield Exclusion on effective coverage levels and liabilities by crop and irrigation practice are available 

at the link indicated above.

As indicated in the following map for Non-Irrigated Cotton, the increase in effective coverage level can 

be considerable. While the counties in yellow (representing a ratio of 1.00) have essentially no change 

in their average yields, average yields increase by roughly 100% for the counties in black (a ratio of 2.00). 

In several counties, average yields increase by even more than 100%. As previously noted, this is a 

concern not only because RMA has no historical experience on which to base rates for effective 

coverage levels in excess of the maximum coverage levels currently offered, but also because high 

effective coverage levels, especially those in excess of 100%, have the potential to increase adverse 

selection against the program as well as provide additional incentive for moral hazard.

 

4

For technical reasons, the NCIS analysis used NASS data for 1995 through 2012, excluding 2013. Since each APH database may use a different 

10 year period, the ratio was estimated using yields for the entire 18 year period. This should not have a material effect on the analysis. 
February 6, 2015 10

In addition to the increased uncertainty in regard to the adequacy of the rates and the expected 

profitability of the program, the Approved Insurance Providers (AIPs) will also be exposed to a greater 

degree of financial risk due to increased variability resulting from high effective coverage levels. Due to 

the greater ease in triggering claims, claim frequency could increase sharply even with modest 

reductions in average yields, with a potential impact similar to that of the 2012 drought. Even if the 

rates charged for high effective yields are adequate over the long term, Yield Exclusion increases the 

financial risk to the AIPs in the short-run due to the potential for widespread losses. 

The impact of the Yield Exclusion procedure on the program cannot be disregarded in an actuarial 

evaluation of the rating of the procedure. Actuarial Standards of Practice No. 1 calls “for the actuary to 

... exercise professional judgment to produce a “reasonable” result when rendering actuarial services. 

The intent is to call upon the actuary to exercise the level of care and diligence that, in the actuary’s 

professional judgment, is necessary to complete the assignment in an appropriate manner.” Given the 

potential magnitude of Yield Exclusion on the program, the actuary’s responsibility goes well beyond a 

technical evaluation of whether the proposed rating methodology seems reasonable and needs to 

consider the increase in financial risk imposed on the AIPs delivering the program. The analysis also 

needs to be more thorough. Section 3.2 of Actuarial Standard of Practice No. 41 states: “In the actuarial 

report, the actuary should state the actuarial findings, and identify the methods, procedures, 

assumptions, and data used by the actuary with sufficient clarity that another actuary qualified in the 

same practice area could make an objective appraisal of the reasonableness of the actuary’s work as 

presented in the actuarial report.” The report is notably lacking in this regard.

Testing of RMA’s Current Rating Structure

In general, the rating structure for the Yield Protection plan the Federal Crop Insurance program follows 

the pattern established many years ago for the APH product. The structure has been refined to some 
February 6, 2015 11

degree but is still recognizable from earlier versions of the program. Coverage level relativities are still 

used but are now supplemented by Unit Residual Factors. The old step-rate rating mechanism that 

accounted for differences in risk between low APH and high APH producers has been replaced by a 

power function using an exponent. The program has also introduced new rating factors such as

Enterprise Units that take account of the amount of acreage insured in the unit. While the rating 

structure has been somewhat stable, the ratemaking methodology itself has changed considerably over 

time. NCIS has reviewed limited portions of RMA’s methodology in past years but has no access to the 

underlying policy level data. In addition, NCIS has previously expressed serious reservations regarding 

the earlier Sumaria ratemaking study released in late 2011 and implemented in cropyear 2012.

Due to the lack of availability of policy level data to conduct an analysis, the analytic method employed 

by NCIS has been to simulate producer yield distributions for each county and to use the fitted 

distributions to test the accuracy of RMA’s current rating factors. Separate analyses were conducted in 

three states using a distinct family of distributions for each state. Weibull distributions were used to 

simulate producer yields in the first state, reverse lognormal distributions in the second state, and 

normal distributions in the third state. The family of distributions used in each state was selected based 

on a review of the published literature. Since the findings were robust across all three states, the 

analysis presented below reviews only one of the three. 

The chart shown below has been developed under the assumption that producer yields in each county 

for Non-Irrigated Texas Cotton can be described as draws from a Weibull distribution. The parameters 

of the producer yield distribution have been selected to reproduce the county base rate for county rates

ranging from $6 to $64 per hundred. The fitted distributions are then used to determine the indicated 

rate relativities between the various coverage levels5. Since rate relativities are the ratio of rates at two 

distinct coverage levels, any bias in the rates themselves tends to be reduced or eliminated in the 

calculation of the indicated rate relativities. 

Coverage Level Relativities

The chart included below compares the indicated coverage level relativities from the fitted distributions 

to RMA’s published coverage level relativities. In general, RMA’s coverage level relativities follow a 

fairly smooth relationship across the range of county base rates. Under the assumption that producer 

yields in any county can be approximated by a Weibull distribution, the chart indicates that RMA’s

coverage level relativities are reasonable for high rated counties but are noticeably inadequate in low 

rated counties. Furthermore, the chart shows that the coverage level relativities become increasingly

inadequate at higher coverage levels. This calls into question RMA’s proposed rating methodology for 

the Yield Exclusion procedure. If the rates are already severely inadequate in low rated counties at high 

coverage levels, the Yield Exclusion rating methodology will only magnify the underlying inadequacy for 

any higher effective coverage levels.

 

5

The expected loss cost for any coverage level can be determined by integrating the indemnity function for that coverage level against the 

known producer yield distribution. The producer yield distribution for Texas Cotton is assumed to be Weibull. The base rate for an individual 

county can be considered to correspond to the expected loss cost at the 65% coverage level. Given the base rate, the parameters of the 

Weibull distribution can be determined that reproduce the county base rate. The resulting producer yield distribution is then used to 

determine the expected loss costs for all other coverage levels. Indicated rate relativities are defined as the ratio of the indicated rate at a 

given coverage level to the indicated rate at the 65% coverage level. These correspond to RMA’s Coverage Level Relativities.
February 6, 2015 12

Unit Residual Factors

The RMA coverage level relativities shown on the previous chart exclude the effect of Unit Residual 

Factors (URFs) on the rate. URFs are an additional rate adjustment applied by RMA for the higher

coverage levels. URFs are consistently equal to 1.00 for coverage levels of 70% and below. At higher 

coverage levels, URFs are 1.00 in some counties and greater than 1.00 in others. In counties where the 

URFs exceed 1.00, the factors increase as the coverage level increases. Based on a comment in the 

Sumaria report, the URFs can be considered to correspond to the endogenous risk factors introduced in 

an earlier rate study more than a decade ago. However, the reason for the rate adjustment as well as

the methodology for establishing these factors has never been adequately explained, either in the 

current Sumaria report or in any earlier RMA-contracted ratemaking study. 

Our interest in URFs focused entirely on whether the factors were sufficient to correct for the rate 

discrepancy between the indicated rate relativities and RMA’s published coverage level relativities 

shown in the chart. This suggests that the URFs should be associated with counties having low base 

rates. However, our review found that this was not the case. There is no evidence to suggest that the 

URFs are intended to correct the existing rate deficiencies at high coverage levels in low rated counties. 

The observation that URFs in excess of 1.00 are currently applied across a broad range of county base 

rates raises the question of the purpose for this rate adjustment. The chart could be modified to show 

the combined effect of the coverage level relativities and the URFs, but this would only raise additional 

0.6000

0.8000

1.0000

1.2000

1.4000

1.6000

1.8000

0.06 0.16 0.26 0.36 0.46 0.56 Rate Relativity

Rate 

Coverage Level Rate Relativity from Weibull Distribution vs. Current RMA Coverage Level Rate Relativity ( 

Texas; Crop CD: 0021; Type CD: 997 ; Practice Type: 003 ; Year: 2015)

0.70

0.75

0.80

0.85

RMA 0.70

RMA 0.75

RMA 0.80

RMA 0.85
February 6, 2015 13

questions. Instead of the fairly smooth relationship of coverage level relativities to county base rates, 

the combined effect of the coverage level relativities with the URFs would shift a seemingly random 

subset of points upward, creating two roughly parallel patterns in the place of each existing pattern. 

This calls into question the justification as well as the method of computation for determining URFs. 

On a related issue, we normally would expect that a rating factor such as the URF should be reasonably 

stable from one year to the next. In the absence of detailed information on how RMA performs its rate 

reviews, we presume that the data used in its most recent analysis includes all of the data used in the 

previous analysis with the addition of one or more recent years of information. This would appear to be 

incompatible with the observation that the URF factor for Non-Irrigated Corn in Logan County, Kansas

fell from its prior value of 1.132 in 2014 to the minimum possible value of 1.000 in 2015 (Cost Estimator 

printout available upon request). Our concern with a change of this magnitude is that it suggests the 

presence of a potential error in the ratemaking methodology. 

One final point in regard to the URF’s is the earlier observation that the Cost Estimator does not 

extrapolate URFs beyond the 85% coverage level. This appears to be an error in the calculations.

Needless to say, the issues identified here in regard to the URFs fail to offer reassurance regarding the 

accuracy of RMA’s existing rating structure and ratemaking procedures upon which the Yield Exclusion 

rating procedure is based. 

Testing of RMA’s Proposed Rating Methodology

The Equivalence Principle

The proposed Yield Exclusion rating methodology is based on the principle that “the same premium 

should be charged for a given yield guarantee on a policy unit no matter whether the guarantee is 

derived from a simple average of APH yields or from an average of yields with Trend Adjustment or Yield 

Exclusion.” If the principle is valid, the program and the AIPs delivering the program should be 

indifferent as to whether the producer obtains a higher guarantee through the selection of a higher 

coverage level or through the use of an adjusted yield. While this is not particularly controversial for the 

relatively small increases in average yield resulting from the Trend Adjustment procedure, it is not clear

whether it would be appropriate for producers who are able to obtain a large increase in their APH as a 

result of excluding a portion of their history. Problems can arise from an inaccurate rating mechanism, 

particularly for effective coverage levels in excess of 85%, from self-selection of subsets of the 

population with different risk characteristics between the various coverage levels, or from a change in 

the mix of business leading to an increase in adverse selection against the program.

The equivalence principle described above is based on the assumption of a homogeneous population of 

producers with similar risk characteristics, including similar yield distributions. This would ensure that 

the loss experience for the subpopulation insured at the 85% coverage level would be indistinguishable 

from the experience of the subpopulation insured at the 65% coverage level except for the differences 

resulting from the use of different deductibles. As a result, the rate based on the experience of one 

subpopulation could be applied equally well to the second subpopulation. However, if the two 
February 6, 2015 14

subpopulations have different risk characteristics, and those differences result in different coverage 

level selections, then the rate derived from the experience for the subpopulation historically insured at 

the 85% coverage level may not be appropriate for the subpopulation historically insured at the 65% 

coverage level if those producers were to select the 85% coverage level. 

While the issue of homogeneity of the population cannot be evaluated without full access to RMA’s 

policy level data, there are valid reasons to believe that different segments of the population have

different degrees of risk. This could be due to the existence of risk characteristics such as soil types or 

yield variability not currently recognized in the rating structure. Alternatively, under the assumption 

that that producer yields can be approximated by a Weibull distribution, the departure of RMA’s 

coverage level relativities from the indicated rate relativities in the previous chart could be an indication 

that the producers insured at higher coverage levels are drawn from a different population than those 

insured at 65%. Considering the importance of this issue, it would have been appropriate for RMA or 

Sumaria to have tested the equivalence principle by simulating the results from the existing book of 

business at higher effective coverage levels. While this would not address all of the concerns regarding 

the proposed rating methodology, it would have provided greater assurance than the current Sumaria 

report offers.

Interpolation

The proposed methodology for rating the higher effective coverage levels relies on the assumption that 

the current RMA rating structure establishes adequate rates for producers in all counties. The previous 

chart calls this assumption into question by demonstrating the inconsistency of the current coverage 

level relativities for the lower rated counties. 

As discussed in the Sumaria report, the proposed rating methodology interpolates rates between the 

existing coverage levels. A visual interpretation of this procedure can be obtained by reviewing the 

previous chart. Based on the assumption that producer yields follow a Weibull distribution, the rate 

should be obtained directly from the smooth rate relativity curves. In comparison, the proposed rating 

methodology determines the rate by interpolating between the various coverage level relativity series

shown on the chart. Since both series of coverage level relativities are severely inadequate in the low 

rated counties, the interpolated rate will also be severely inadequate.

Extrapolation

For effective coverage levels in excess of the maximum coverage level offered in the county, the 

proposed rating methodology determines the rate by using the difference in rates between the two 

highest coverage levels and extending that difference linearly to higher effective coverage levels. In 

terms of the previous chart, this approach would measure the gap between the points shown on the 

chart for the 80% and 85% coverage levels and add that difference to the points at the 85% coverage 

level to determine the rate to be charged for the 90% coverage level, and similarly for each higher 

coverage level. Since the indicated rate relativity curves shown on the chart increase exponentially for 

low rated counties, the proposed methodology would result in increasingly inadequate rates as the 

coverage level increases. 
February 6, 2015 15

The following chart provides a direct comparison of the proposed Yield Exclusion rating methodology to 

the simulated rate relativity approach for a single county at a range of coverage levels. The rates 

generated by the linear extrapolation method in this example become increasingly inadequate at higher 

effective coverage levels. The coverage level relativity at a coverage level of 170% would be 

approximately 3.50, roughly half of the indicated value based on the fitted producer yield distribution.

Marginal Rates

The following chart illustrates how an increase in effective coverage level affects the indemnities paid to 

an individual producer. The vertical axis represents the indemnity payment the producer would receive 

corresponding to the producer yield shown on the horizontal axis. Separate indemnity curves are shown 

for effective coverage levels of 65%, 85%, 120%, and 150%. The producer yield distribution is beta with 

parameters  =  =2 with lower and upper bounds of 75 and 125, resulting in an expected yield of 100 

bushels. Expected indemnities can be determined by integrating the indemnity function against the 

yield distribution. 

In the example shown here, the producer has an expected loss cost of 0 at the 65% coverage level since 

the producer’s yield never falls below the guarantee of 65 bushels. At the other extreme, the producer 

collects an indemnity every year at the 150% coverage level. The producer’s expected indemnity at this 

coverage level is exactly 50 bushels, the difference between the guarantee of 150 and the expected 

yield of 100 bushels. Similarly, the producer’s expected indemnity at the 125% coverage level is exactly 

25 bushels since the producer’s maximum possible yield is 125 bushels. For each one bushel increase in 

the producer’s guarantee in excess of 125 bushels, the indemnity also increases by one bushel. 

Consequently, this producer should have a marginal rate of 100% for effective coverage levels of 125% 

or above. 

0.50

1.50

2.50

3.50

4.50

5.50

6.50

7.50

0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 Rate Relativity

Coverage Level

RMA Coverage Level Relativity vs. Estimated Relativity from Weibull Distribution

(Texas Non-Irrigated Cotton, Bosque County, County Base Rate = 0.076)

RMA Relativity

Est. Relativity for YE

RMA Relativity for YE
February 6, 2015 16

The discussion presented here identifies a fundamental weakness in the proposed Yield Exclusion rating 

methodology. The proposed rating methodology increases the overall rate based on the producer’s 

effective coverage level. However, the chart indicates that the producer’s marginal rate should rapidly 

increase to 100% as the producer’s effective coverage level increases. The proposed rating 

methodology gives no consideration to marginal rates and instead establishes the producer’s rate as a 

simple linear interpolation or extrapolation of the rates at the available coverage levels. Whether the 

marginal rate structure underlying the proposed rating methodology is consistent with this approach is 

unclear without further analysis. 

Adverse Selection and Moral Hazard

Actuarial Standards with respect to Adverse Selection

The Actuarial Standards of Practice emphasize the importance of considering the effects of adverse 

section on the insurance system. Actuarial Standard of Practice No. 12 defines Adverse Selection as:

Actions taken by one party using risk characteristics or other information known to or suspected 

by that party that cause a financial disadvantage to the financial or personal security system 

(sometimes referred to as antiselection).

One method to reduce or prevent adverse selection is to charge equitable rates. Section 3.2.1 of 

Actuarial Standard of Practice No. 12 discusses rate equity in the following terms:

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

0.20

0

20

40

60

80

100

120

140

160

0 20 40 60 80 100 120 140 160 180 Indemnity Probability

Producer Yield

Relationship of Indemnity to Effective Coverage Level

for an Individual Producer

65% 85% 120% 150% Yield Distribution
February 6, 2015 17

Rates within a risk classification system would be considered equitable if differences in rates 

reflect material differences in expected cost for risk characteristics. 

Section 3.3.2.a of ASOP 12 discusses the need for a well-designed rate classification system or rating 

structure to limit the effects of adverse selection on the insurance system:

Adverse Selection ⎯ If the variation in expected outcomes within a risk class is too great, adverse 

selection is likely to occur. To the extent practical, the actuary should establish risk classes such 

that each has sufficient homogeneity with respect to expected outcomes to satisfy the purpose 

for which the risk classification system is intended.

Finally, section 3.4.1 points out the importance of evaluating the potential effects of adverse selection 

and calls upon the actuary to recommend possible remedies:

Adverse selection can potentially threaten the long-term viability of a financial or personal 

security system. The actuary should assess the potential effects of adverse selection that may 

result or have resulted from the design or implementation of the risk classification system. 

Whenever the effects of adverse selection are expected to be material, the actuary should, 

when practical, estimate the potential impact and recommend appropriate measures to 

mitigate the impact.

Adverse Selection among Producers with Different Risk Characteristics in the Same County

As an example of the increased potential for adverse selection following the introduction of the Yield 

Exclusion procedure, consider two producers in the same county, both with the same Rate Yield but 

different yield distributions. Suppose that the first producer has reasonably stable yields while the 

second producer has much more variable yields. Since both producers have the same Rate Yield, both

are charged the same rate and pay the same premium for equivalent coverage. However, the second 

producer is much riskier than the first producer and would be expected to collect greater indemnities

over the long term. Despite their differences in risk, the existing MPCI rating structure is incapable of 

capturing the difference in expected indemnities between the two producers. 

Next, consider the effect of introducing Yield Exclusion. This may have only a limited effect on the first 

producer with relatively stable yields but it has the potential to greatly increase the APH of the second 

producer with more variable yields. As discussed in the previous paragraph, the second producer is 

already underrated under the existing rating structure relative to the first producer. In addition, this 

producer would be able to increase the amount of coverage purchased to a much greater extent than 

the producer with more stable yields. This is a textbook case of adverse selection, and would have the 

effect of undermining the financial soundness of the program over time.

Adverse Selection between Counties

A second example of the potential for increased adverse selection against the program due to the 

introduction of the Yield Exclusion procedure comes about through differences between counties. The 

Exclusion procedure will have a greater impact on counties with highly variable yields. These also tend 
February 6, 2015 18

to be the high rated counties. As a result, producers in the high rated counties will have a greater 

opportunity to purchase additional protection than producers in less risky counties. The effect would be 

to increase the portion of the countrywide book of business written on high risk producers.

Addressing Adverse Selection and Moral Hazard through the Unit Residual Factors

As previously noted, if the set of producers in an individual county consists of two subpopulations with 

different risk characteristics, any deficiencies in the current rating structure or the Yield Exclusion rating 

procedure could increase the potential for adverse selection and moral hazard. This might not be a 

major concern except for the potential magnitude of the increase in APH yields arising from the Yield 

Exclusion procedure. NCIS expected that the Sumaria report would have considered this issue in some 

depth. However, the Sumaria report includes only a brief observation on the impact of high effective 

coverage levels in relation to adverse selection and moral hazard, as follows:

Ultimately, the tailoring of rates to very high effective coverage levels requires an understanding 

of the behavioral response to such coverage.

The 2010 Sumaria rate methodology review (Coble, et al.) provides additional discussion of this issue. 

Page 41 of that report discusses the rating model for determining coverage level differentials. In 

reference to equation 4.9 (this equation also appears in the recent Sumaria study), it states: 

The variable coverage level differentials are derived using a robust median regression method to 

estimate a model specification where the implied coverage level differential (from unit level 

historical loss cost data) is a function of...

Page 42 of the same report indicates that the coverage level relativities estimated using equation 4.9 fail 

to capture the effect of changes in incentives due to insuring at higher coverage levels: 

Another insight emerging from the RMA-commissioned study in 2002 is the need to account for 

endogenous risk changes associated with insuring at higher coverage levels (i.e. lower 

deductibles). It is a widely accepted that economic incentives to produce are reduced at higher 

coverage levels.

This indicates that the endogenous risk factors, which correspond to the Unit Residual Factors in RMA’s 

rating formula, represent an adjustment for the increased potential for adverse selection and moral 

hazard at higher coverage levels.

The 2010 report describes the endogenous risk adjustment in the following terms:

The endogenous risk behavior is incorporated in the coverage level differential by calculating an 

endogenous risk factor using historical loss cost data at a specific coverage level and comparing 

it to an “implied” loss cost used in estimating equation 4.9.
February 6, 2015 19

Unfortunately, the Sumaria report does not discuss the method used to develop the endogenous risk 

adjustment nor does it provide a test of its accuracy.

We question the explanation that the endogenous risk adjustment is designed to address the effects of 

adverse selection or moral hazard. The description provided above of the methodology used to 

estimate the endogenous risk adjustment suggests instead that the Unit Residual Factor is better 

described as an adjustment for the estimation error resulting from the use of an incorrectly specified

rating model in equation 4.9. This is demonstrated in the chart comparing Weibull versus RMA coverage 

level relativities, which indicates that an adjustment is needed in the low rated counties to correct the 

error in estimating the RMA coverage level relativities, presumably because RMA’s quadratic rating 

formula may be inaccurate in states where county base rates vary across a wide range. If this

interpretation is correct, the URFs are an attempt to offset model specification error rather than to 

address the endogenous risk resulting from adverse selection and moral hazard. This suggests that the 

potential increase in adverse selection or moral hazard with the introduction of Yield Exclusion is not 

adequately addressed through the existing rating structure or through the Yield Exclusion rating 

methodology. These concerns with the Unit Residual Factors and whether adverse selection and moral 

hazard have been properly considered in establishing the rates only serve to reduce confidence in the 

current rate structure and ratemaking methodology. 

Impact on Loss Adjustment Expenses and A&O Payments

The Statement of Principles Regarding Property and Casualty Insurance Rating provides a reminder that 

“proper actuarial procedures be employed to derive rates that protect the insurance system’s financial 

soundness...” The financial soundness of the insurance system is particularly relevant when the changes 

being proposed have a material effect on the operation of the program. In addition, section 3.4.1 of 

ASOP 12 calls upon the actuary to “estimate the potential impact and recommend appropriate 

measures to mitigate the impact” whenever the effects of adverse selection are expected to be 

material, as they appear to be under the current circumstances. 

Despite the material changes to the program as well as the potential increase in adverse selection and 

moral hazard resulting from the introduction of the Yield Exclusion procedure, the Sumaria report 

provides no estimates of the impact of program changes on liability, premiums, or indemnities as called 

for by the actuarial standards. At a bare minimum the report needs to include an evaluation of the 

expected increase in claim frequency and loss adjustment expense resulting from the increase in

effective coverage levels. Whether or not RMA and Sumaria agree with the comments included in this 

response, there should be no debate over the expected increase in claim frequency and loss adjustment 

expense as effective coverage levels rise. The relevance of this issue rests in the fact that the SRA

provides no additional compensation to the AIPs to cover their additional loss adjustment expense other 

than a small payment when the statewide gross loss ratio exceeds 120%. The Sumaria report provides 

no evaluation of whether the additional expense will affect the financial soundness of the insurance 

system.
February 6, 2015 20

Reinsurance Issues

Following the signing of the 2014 Farm Bill, RMA announced that implementation of the Yield Exclusion 

procedure would be postponed until 2016. This information would have been taken into consideration 

at the time the AIPs completed and submitted their Plan of Operations for the 2015 Reinsurance Year on 

or before April 1, 2014. Months later RMA revised its decision and announced that the Yield Exclusion 

procedure would be implemented in 2015 for all crops other than winter wheat. The analysis presented 

in this response suggests that RMA’s decision may materially impact the risk and profit of the program

for 2015 in a way that the AIPs had not anticipated at the time they submitted their Plan of Operations 

for the 2015 Reinsurance Year. Under the terms of the SRA, companies are not allowed to revisit those

earlier decisions even though the Yield Exclusion procedure is now being implemented one year earlier 

than originally scheduled.

Conclusions

Technical Concerns

This review identifies several issues with the existing rating structure and ratemaking methodology as 

well as with the proposed Yield Exclusion rating methodology. RMA proposes to use the same rating 

method as is currently being used for Trend Adjustment to account for the additional risk at higher 

effective coverage levels. What this fails to recognize is that Trend Adjustment generates a relatively 

small change in the producer’s APH whereas Yield Exclusion may result in a large increase in the 

producer’s APH. The rating principle adopted by RMA, that the producer should have an equivalent

premium regardless of the method the producer uses to obtain a given yield guarantee, assumes that 

the existing rating structure is equally valid for all producers and is effectively an argument that the AIPs 

should be indifferent to the increase in risk because the producer could have obtained a similar 

guarantee through the purchase of a higher coverage level. While this argument may be reasonable for 

low effective coverage levels, it clearly does not apply to situations in which the producer’s effective 

coverage level exceeds the highest nominal coverage level offered by RMA. In addition, the argument

relies on the assumption that existing rates are adequate, the population is homogeneous, and the 

availability of high effective coverage levels will not lead to an increase in adverse selection or moral 

hazard. 

This review calls into question the adequacy of the rates at higher coverage levels in low rated counties 

as well as the accuracy of RMA’s Unit Residual Factors. In addition, it notes that any flaws in the 

underlying rate structure are carried over and magnified by the Yield Exclusion rating methodology. It 

also calls into question the assumption that a linear extrapolation is the appropriate method for 

estimating rates at high effective coverage levels. To the limit of our information, no tests have been 

conducted on RMA’s historical book of business to evaluate whether the rating principle is valid or

whether the proposed Yield Adjustment rating methodology produces adequate rates. Similarly, no 

testing has been conducted on the reasonableness of the resulting marginal rates under the proposed 

rating methodology. 

The concerns expressed here with respect to the validity of the existing rating structure and ratemaking 

methodologies employed by RMA as well as the adequacy of the resulting rates highlight a more general 
February 6, 2015 21

concern regarding RMA's capability of empirically demonstrating the appropriateness of the actuarial 

procedures utilized in the Federal Crop Insurance program. Neither RMA nor Sumaria provide any 

empirical support for the Yield Exclusion procedure. Not a single numeric estimate of the potential 

financial impact of Yield Exclusion is contained in the review. Based on the documentation provided in 

the review, it is not possible to establish whether the current ratemaking methodology is valid without 

further empirical support. We strongly recommend that RMA be more forthcoming with this 

information to ensure that the companies that risk their own capital in this program are fully aware of 

the risks they undertake by participating in the Federal Crop Insurance program.

Business Concerns

NCIS represents the interests of the companies at risk in delivering the Federal Crop Insurance program. 

In its capacity as the advisory organization for the crop insurance industry, NCIS would be remiss if it 

failed to consider the implications of the Yield Exclusion procedure on its member companies. Based on

the evaluation presented in this response, Yield Exclusion has the potential to have a significant impact 

on the program and the industry, depending on the decisions of individual producers. This imposes a

high degree of uncertainty on the companies in terms of the volume of business affected, the magnitude 

of the increase in liabilities and average effective coverage levels, the adequacy of the rates, the 

implications on claim frequency and loss adjustment expense, as well as how the additional exposure 

and risk will affect their reinsurance programs. 

In addition to APH Yield Exclusion, the 2014 Farm Bill introduced a number of other programs that have 

an uncertain impact on the program and increase the financial risk of the Approved Insurance Providers. 

These include the option to select different coverage levels by irrigation practice, the ability to 

separately insure Enterprise Units by irrigation practice, as well as the additional coverage provided 

under SCO and STAX. Given the potential impact of these changes, the appropriate and prudent 

response by RMA and Sumaria would have been to simulate the effect of these changes on the existing 

book of business to evaluate the increase in risk exposure of the AIPs. Unfortunately, no evaluation of 

the changes appears to have been conducted. Had RMA and Sumaria conducted an evaluation, 

companies would have been in a position to assess the additional financial risk resulting from these 

changes. In the absence of that evaluation, the AIPs find themselves in the position of being obligated 

to accept the increase in risk without any clear understanding of its magnitude. The strength and 

resilience of the private sector delivery system depends on its ability to understand and manage risk as 

well as on continued access to the necessary financial resources to operate in an effective and 

consistent manner. However, with the additional uncertainty resulting from the introduction of the 

Yield Exclusion and other Farm Bill programs, these changes are anticipated to adversely affect the

ability to attract capital into the industry, detract from the ability of the AIPs to obtain adequate 

reinsurance at reasonable cost, and increase the financial risk of participating companies.
February 6, 2015 22

REFERENCES

Undated Sumaria Report on Yield Exclusion Rating:

Review of Adjustment in Actual Production History to Establish Insurable Yields; Determination of 

Actuarial Sound Premium Rates; prepared by Sumaria Systems, Inc. on behalf of USDA Risk Management 

Agency.

2010 Sumaria rate methodology review:

A Comprehensive Review of the RMA APH and Combo Rating Methodology; Final Report March 15, 2010; 

Keith H. Coble, Thomas O. Knight, Barry K. Goodwin, Mary Frances Miller, Roderick M. Rejesus

Statement of Principles Regarding Property and Casualty Insurance Ratemaking:

http://casact.org/professionalism/standards/princip/sppcrate.pdf

CAS Code of Professional Conduct:

http://casact.org/professionalism/policiesProc/index.cfm?fa=code

Actuarial Standard of Practice No. 1 - Introductory Actuarial Standard of Practice:

http://www.actuarialstandardsboard.org/pdf/asops/asop001_170.pdf

Actuarial Standard of Practice No. 41 - Actuarial Communications:

http://www.actuarialstandardsboard.org/pdf/asops/asop041_120.pdf

Actuarial Standard of Practice No. 12 - Risk Classification:

http://www.actuarialstandardsboard.org/pdf/asops/asop012_132.pdf

2015 Standard Reinsurance Agreement:

http://www.rma.usda.gov/pubs/ra/sraarchives/15sra.pdf
2/4/2015 Page 1 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

Premium Guarantee Per Acre 

Amount Internal 999999999.99

If Unit of Measure 

equals Pounds "LBS", 

then round to whole 

number.

If Unit of Measure 

equals Tons "TONS", 

then round to 2 

decimals.

Otherwise, round to 

1 decimal.

Common Crop Insurance Policy definition 

'production guarantee (per acre)'.

Approved Yield P11 43 99999999.99 None

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Coverage Level Percent P14 34 9.9999 None

For APH Trend and Yield Exclusion the Coverage 

Level Percent in this section is ALWAYS the 

chosen coverage level and NOT the Effective 

Coverage Level.

Guarantee Per Acre Amount Internal 999999999.99

If Unit of Measure 

equals Pounds "LBS", 

then round to whole 

number.

If Unit of Measure 

equals Tons "TONS", 

then round to 2 

decimals.

Otherwise, round to 

1 decimals.

Guarantee Adjustment Factor P11 72 0.999 None Edit with the Guarantee Adjustment ICE, 

"D00068".

When Commodity 

Code equals Barley, 

"0091", Corn, "0041", 

Cotton, "0021", Grain 

Sorghum, "0051", 

Soybeans, "0081" or 

Wheat, "0011"; 

round to nearest 

whole cent [$9.99]. 

If result is based on 

Contract Price for 

specialty type Corn, 

Soybeans or Barley; 

round to nearest one 

hundredth cent 

($9.9999).

0051 Grain Sorghum

Section 1: Liability Calculation

03 Revenue Protection with Harvest Price Exclusion 

When Guarantee Adjustment Type Code equals Late 

Planting, "L" OR Prevented Planting, "P":

Premium Guarantee Per Acre Amount * Guarantee 

Adjustment Factor

0047 Dry Beans

Premium Guarantee Per 

Acre Amount = Approved Yield * Coverage Level Percent

Guarantee Per Acre 

Amount =

 
2/4/2015 Page 2 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Projected Price ADM 99999.9999

Liability for Yield Protection, "01" allows the 

producer the opportunity to choose a 

percentage of the Projected Price. Liability for 

Revenue Protection, "02", or Revenue 

Protection with Harvest Price Exclusion, "03", 

requires the producer to choose 100 percent of 

the Projected Price. Edit with ADM Price, 

"00810".

Contract Price P11 47 9999.9999 None

For Yield Protection, "01", Contract Price may 

be used in lieu of the Projected Price for Dry 

Beans, Dry Peas, specialty types of Canola, 

Corn, Soybean or Barley. For Revenue 

Protection, "02", or Revenue Protection with 

Harvest Price Exclusion, "03", Contract Price 

may be used in lieu of the Projected Price for 

Dry Beans, Dry Peas, or specialty types of 

Canola, Corn or Soybeans. If the insured 

chooses to use the contract price, the contract 

price per bushel should be entered in the 

contract price field. The contracted price will 

be capped by RMA at a certain percentage over 

the projected price for Canola, Corn, Soybean 

and Barley as specified in the Special Provisions.

Price Election Percent ICE 9.9999 None

Price Election Percent must equal 1.000, when 

Insurance Plan Code is Revenue Protection, 

"02", or Revenue Protection with Harvest Price 

Exclusion, "03". Edit with ICE Price Election 

Percent, "D00007".

Premium Total Guarantee 

Amount Internal 99999999.99 Round to 2 decimals.

Price Election Amount Internal 9999.9999 None

Reported Acreage P11 49 99999999.99 None Reported Acreage must equal the sum of all 

Land, P27, Reported Acreage.

Premium Guarantee Per Acre Amount * Price Election 

Amount * Reported Acreage = Premium Total Guarantee Amount

When Commodity 

Code equals Canola, 

"0015", Rice, "0018", 

Sunflowers, "0078"; 

round to nearest onetenth cent [$9.999]. 

If result is based on 

Contract Price for 

specialty type Canola; 

round to nearest one 

hundredth cent 

($9.9999).

When Commodity 

Code equals Popcorn, 

"0043", Dry Beans, 

"0047", or Dry 

Peas,"0067" round to 

nearest onehundredth cent 

[$9.9999]. Price Election Amount = Projected Price (or Contract Price) * Price Election Percent

Price Election Amount Internal 9999.9999
2/4/2015 Page 3 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Total Guarantee Amount P11 100 99999999.99 Round to 2 decimals.

Price Election Amount Internal 9999.9999 None

Reported Acreage P11 49 999999.99 None Reported Acreage must equal the sum of all 

Land, P27, Reported Acreage.

Premium Liability Amount Internal 9999999999 Round to whole 

Insured Share Percent P11 44 9.9999 None

Liability Amount P11 91 9999999999 Round to whole 

number.

Insured Share Percent P11 44 9.9999 None

The appropriate discount factor should be 

looked up and applied.

=

When the Unit Structure Code is Optional Unit, "OU", 

"UA", "UD", Basic Unit, "BU", or Enterprise Unit, "EU" & 

"EP": 

Unit Structure Discount Factor

Revenue Lookup Adjustment 

Factor Internal 9.99999999 None

=

When the Unit Structure Code is Whole Farm Unit "WU":

Unit Structure Discount Factor for Enterprise Unit"EU" 

Unit Structure Discount Factor Internal 9.99999999 None

Capped at 1.0

From below for Unit Structures "OU, UA, UD, 

BU, or EU".

Unit Structure Discount Factor Internal 9.99999999 None capped at 1.0

Optional Unit Discount Factor ADM 9.999 None Edit with ADM Unit Discount, "A01090".

=

When Unit Structure Code is Basic Unit, "BU":

Basic Unit Discount Factor

Basic Unit Discount Factor ADM 9.999 None Edit with ADM Unit Discount, "A01090".

=

When the Unit Structure Code is Enterprise Unit, "EU" & 

"EP":

 Enterprise Unit Discount Factor

Enterprise Unit Discount Factor ADM 9.999 None

Edit with ADM Unit Discount, "A01090".

Enterprise Units will now mandate that all 

insured acreage for a commodity will be 

included in the Enterprise Unit. This includes 

both fall and spring planted acreage.

Enterprise Unit Discount Factor is contingent 

upon the sum of the reported acres which were 

not prevented from planting for all applicable 

units being greater than or equal to the Area 

Low Quantity and less than or equal to Area 

High Quantity fields contained on the ADM Unit 

Discount, "A01090". Unit is not eligible as an 

enterprise unit if summed planted acres are less 

than 20 acres or 20% of insured crop acreage. 

Guarantee Per Acre Amount * Price Election Amount * 

Reported Acreage Total Guarantee Amount =

= Total Guarantee Amount * Insured Share Percent

Premium Liability Amount = Premium Total Guarantee Amount * Insured Share Percent

Liability Amount

When Commodity Code is NOT EQUAL to Wheat, "0011", Cotton, "0021", Corn, "0041", or Soybeans, "0081".

Unit Structure Discount 

Factor

Section 2 3: Unit Discount Calculation

=

When the Unit Structure Code is Optional Unit, "OU", 

"UA", or "UD": 

 Optional Unit Discount Factor

Revenue Lookup 

Adjustment Factor
2/4/2015 Page 4 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Revenue Lookup Adjustment 

Factor Internal 9.99999999 None

Unit Structure Discount Factor Internal 9.99999999 None

Capped at 1.0

From below for Unit Structure "OU", "UA", or 

"UD".

=

When Unit Structure Code is Basic Unit, "BU":

Basic Unit Discount Factor for 65% Coverage Level

Basic Unit Discount Factor ADM 9.999 None

Edit with ADM Unit Discount, "A01090" for 65% 

Coverage Level.

Basic Unit Discount Factor is contingent upon 

the sum of the reported acres which were not 

prevented from planting for the unit being 

greater than or equal to the Area Low Quantity 

and less than or equal to Area High Quantity 

fields contained on the ADM Unit Discount, 

"A01090" for 65% Coverage Level.

=

When the Unit Structure Code is Enterprise Unit, "EU" & 

"EP" or Whole Farm Unit "WU":

Enterprise Unit Discount Factor for 65% Coverage Level

Enterprise Unit Discount Factor ADM 9.999 None

Edit with ADM Unit Discount, "A01090" for 65% 

Coverage Level.

Enterprise Unit Discount Factor is contingent 

upon the sum of the reported acres which were 

not prevented from planting for all applicable 

units being greater than or equal to the Area 

Low Quantity and less than or equal to Area 

High Quantity fields contained on the ADM Unit 

Discount, "A01090" for 65% Coverage Level.

When Commodity Code is EQUAL to Wheat, "0011", Cotton, "0021", Corn, "0041", or Soybeans, "0081".

Revenue Lookup 

Adjustment Factor

=

When the Unit Structure Code is Optional Unit, "OU", 

"UA", or "UD": 

Unit Structure Discount Factor
2/4/2015 Page 5 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Unit Structure Discount Factor Internal 9.99999999 None

Capped at 1.0

See Section 19 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Optional Unit Discount Factor ADM 9.999 None

Edit with ADM Unit Discount, "A01090".

See Section 19 for Option Code "TA" (Trend 

Adjustment)and "YE" (Yield Exclusion).

=

When Unit Structure Code is Basic Unit, "BU":

Basic Unit Discount Factor

Basic Unit Discount Factor ADM 9.999 None

Edit with ADM Unit Discount, "A01090" by 

Coverage Level.

Basic Unit Discount Factor is contingent upon 

the sum of the reported acres which were not 

prevented from planting for the unit being 

greater than or equal to the Area Low Quantity 

and less than or equal to Area High Quantity 

fields contained on the ADM Unit Discount, 

"A01090" for Coverage Level.

See Section 19 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

=

When the Unit Structure Code is Enterprise Unit, "EU" & 

"EP":

Enterprise Unit Discount Factor

Enterprise Unit Discount Factor ADM 9.999 None

Edit with ADM Unit Discount, "A01090" by 

Coverage Level.

Enterprise Units will now mandate that all 

insured acreage for a commodity will be 

included in the Enterprise Unit. This includes 

both fall and spring planted acreage.

Enterprise Unit Discount Factor is contingent 

upon the sum of the reported acres which were 

not prevented from planting for all applicable 

units being greater than or equal to the Area 

Low Quantity and less than or equal to Area 

High Quantity fields contained on the ADM Unit 

Discount, "A01090" for Coverage Level. Unit is 

not eligible as an enterprise unit if summed 

planted acres are less than 20 acres or 20% of 

insured crop acreage.

See Section 19 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Current Year Yield Ratio Internal 9.9999 Round to 2 decimals. Cup at 0.50 and Cap at 1.50.

Rate Yield P15 35 99999999.99 None

For skip row commodities, the rate yield is the 

converted rate yield from the P15 record with 

skip row (yield conversion factor) applied.

Reference Yield ADM 99999.99 None Edit with ADM Base Rate, "A01010".

Prior Year Yield Ratio Internal 9.9999 Round to 2 decimals. Cup at 0.50 and Cap at 1.50.

Rate Yield P15 35 99999999.99 None

For skip row commodities, the rate yield is the 

converted rate yield from the P15 record with 

skip row (yield conversion factor) applied.

Prior Year Reference Amount ADM 99999.99 None Edit with ADM Base Rate, "A01010".

Current Year Rate Multiplier Internal 9999.99999999 Round to 8 decimals.

Exponent Value ADM S99.999 None Edit with ADM Base Rate, "A01010".

Prior Year Rate Multiplier Internal 9999.99999999 Round to 8 decimals.

Prior Year Exponent Value ADM S99.999 None Edit with ADM Base Rate, "A01010".

Section 3 2: Base Premium Rate Calculation

Prior Year Yield Ratio Rate Yield / Prior Year Reference Amount

Current Year Yield Ratio = Rate Yield / Reference Amount

Prior Year Rate Multiplier =

=

Prior Year Yield Ratio ^ Prior Year Exponent Value

=

Current Year Rate 

Multiplier

When the Unit Structure Code is Optional Unit, "OU", 

"UA", or "UD": 

Optional Unit Discount Factor

=

Unit Structure Discount 

Factor

Current Year Yield Ratio ^ Exponent Value
2/4/2015 Page 6 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Current Year Base Rate Internal 9999999999.99999999 Round to 8 decimals.

Sub County Rate ADM 99.9999 None

Edit with ADM Sub County Rate, "A01050".

See Section 21 for Written Agreement Sub 

County Rate information.

=

When Rate Method Code is Additive, "A":

Sub County Rate + (Current Year Rate Multiplier * 

Reference Rate + Fixed Rate)

Current Year Rate Multiplier Internal 9999.99999999 None

=

When Rate Method Code is Multiplicative, "M":

Sub County Rate * (Current Year Rate Multiplier * 

Reference Rate + Fixed Rate)

Reference Rate ADM 9.9999 None

Edit with ADM Base Rate, "A01010".

See Section 20 for Written Agreement Rate 

Information.

=

Otherwise:

Current Year Rate Multiplier * Reference Rate + Fixed rate

Fixed Rate ADM 9.9999 None

Edit with ADM Base Rate, "A01010".

See Section 20 for Written Agreement Rate 

Information.

Prior Year Base Rate Internal 9999999999.99999999 Round to 8 decimals.

Sub County Rate ADM 99.9999 None

Edit with ADM Sub County Rate, "A01050".

See Section 21 for Written Agreement Sub 

County Rate information.

=

When Rate Method Code is Additive, "A":

Sub County Rate + (Prior Year Rate Multiplier * Prior Year 

Reference Rate + Prior Year Fixed Rate)

Prior Year Rate Multiplier Internal 9999.99999999 None

=

When Rate Method Code is Multiplicative, "M":

Sub County Rate * (Prior Year Rate Multiplier * Prior Year 

Reference Rate + Prior Year Fixed Rate)

Prior Year Reference Rate ADM 9.9999 None

Edit with ADM Base Rate, "A01010".

See Section 20 for Written Agreement Rate 

Information.

=

Otherwise:

Prior Year Rate Multiplier * Prior Year Reference Rate + 

Prior Year Fixed rate

Prior Year Fixed Rate ADM 9.9999 None

Edit with ADM Base Rate, "A01010".

See Section 20 for Written Agreement Rate 

Information.

Current Year Base Premium 

Rate Internal 9999999999.99999999 Round to 8 decimals.

If Option Code "YE" is applicable and the 

effective coverage level exceeds the highest 

coverage level for the offer in the ADM, see 

Section 25 for the Current Year Base Premium 

Rate calculation.

Rate Differential Factor ADM 9.999999999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 17 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Unit Residual Factor ADM 999.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Optional Unit, 

"OU", "UA", "UD", or Basic Unit, 'BU'.

=

When Unit Structure code is Enterprise Unit, "EU" & "EP":

Round(Current Year Base Rate * Rate Differential Factor * 

Enterprise Unit Residual Factor, 8)

Enterprise Unit Residual Factor ADM 9.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Enterprise Unit, 

'EU'.

=

When Unit Structure code is Whole Farm Unit, "WU":

Round(Current Year Base Rate * Rate Differential Factor * 

Whole Farm Unit Residual Factor, 8)

Whole Farm Unit Residual 

Factor ADM 9.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Whole Farm Unit, 

'WU'.

Current Year Base 

Premium Rate 

=

Current Year Base Rate

When Rate Method Code is Fixed, "F":

Sub County Rate 

When Rate Method Code is Fixed, "F":

Sub County Rate

=

=

Prior Year Base Rate

 When Unit Structure Code is equal to Optional Unit, 

"OU", "UA", "UD", or Basic Unit, "BU":

Round(Current Year Base Rate * Rate Differential Factor * 

Unit Residual Factor, 8)
2/4/2015 Page 7 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Prior Year Base Premium Rate Internal 9999999999.99999999 Round to 8 decimals.

Prior Year Rate Differential 

Factor ADM 9.999999999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 17 for Option code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Prior Year Unit Residual Factor ADM 999.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Optional Unit, 

"OU", "UA", "UD", or Basic Unit, "BU".

=

When Unit Structure code is Enterprise Unit, "EU" & "EP":

Round(Prior Year Base Rate * Prior Year Rate Differential 

Factor * Prior Year Enterprise Unit Residual Factor, 8)

Prior Year Enterprise Unit 

Residual Factor ADM 9.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Enterprise Unit, 

'EU'.

=

When Unit Structure code is Whole Farm Unit, 'WU':

Round(Prior Year Base Rate * Prior Year Rate Differential 

Factor * Prior Year Whole Farm Unit Residual Factor, 8)

Prior Year Whole Farm Unit 

Residual Factor ADM 9.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Whole Farm Unit, 

'WU'.

Base Premium Rate = MIN (Current Year Base Premium Rate, Prior Year Base 

Premium Rate * 1.2, .999) Base Premium Rate P11 94 9999999999.99999999 Round to 8 decimals.

Revenue Lookup Rate = MIN(Current Year Base Rate, Prior Year Base Rate * 1.2, 

0.9999) Revenue Lookup Rate Internal 9999999999.9999 Round to 4 decimals.

If Option Rate Method Code equal "T' (Total 

Premium Rate Adjustment) see Section 9. 

Additive Optional Rate 

Adjustment Factor Internal 999999.9999 Round to 4 decimals.

Option Rate ADM 99999.9999 None

Option Rate will be the Sum of all Option Rate 

with Rate Method Code equal to Additive, "A". 

Edit with ADM Option Rate, "A01060".

Rate Differential Factor ADM 9.99999999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 17 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Multiplicative Optional Rate 

Adjustment Factor Internal 999999.9999 Round to 4 decimals.

Option Rate ADM 9.9999 None Edit with ADM Option Rate, "A01060".

When Rate Method Code is Additive, "A":

∑ Option Rate * Rate Differential Factor

Section 4: Optional Coverage (Additive "A" and Multiplicative "M")

=

= Additive Optional Rate 

Adjustment Factor 

 When Unit Structure Code is equal to Optional Unit, 

"OU", "UA", "UD", or Basic Unit, "BU":

Round(Prior Year Base Rate * Prior Year Rate Differential 

Factor * Prior Year Unit Residual Factor, 8)

Prior Year Base Premium 

Rate 

=

Multiplicative Optional 

Rate Adjustment Factor

When Rate Method Code is Multiplicative, "M":

∑ Option Rate1 * Option Rate2 * Option Rate3... 
2/4/2015 Page 8 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

It is recommended that other than hard coding 

for specific type and practice codes which will 

eventually change when the new key structure 

is adopted, that a condition be put in place 

that will set the add on rate to 0 when the 

Price Volatility is 0. This condition MUST occur 

at some point in order to circumvent the 

Calculation of Preliminary Revenue Protection 

Add on Rate and Preliminary Revenue 

Protection with Harvest Price Exclusion Add on 

Rate, which contains a constraint that the add 

on rate be at least 1% greater than the base 

Premium Rate.

Lookup Rate Internal 9999999999.9999 Round to 4 decimals.

Revenue Lookup Rate Internal 9999999999.9999 Round to 4 decimals. From Section 2.

Revenue Lookup Adjustment 

Factor Internal 9.99999999 None From Section 3.

Adjusted Mean Quantity 

(AdjMean) Internal 999999.99999999 Round to 8 decimals.

Approved Yield (AY) P11 43 99999999.99 None

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Mean Quantity ADM 999.999999999 None

Edit with ADM Combo Revenue Factor, 

"A01030". 

 Search the Combo Revenue Factor, "A01030" 

for the Mean Quantity using Lookup Rate.

Section 5: Revenue Coverage Add on Rates (Applicable only for Plans 02 and 03)

Revenue Lookup Rate * Revenue Lookup Adjustment Factor

Adjusted Mean Quantity = Approved Yield * Mean Quantity / 100

Lookup Rate =
2/4/2015 Page 9 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Adjusted Standard Deviation 

Quantity (AdjStndDev) Internal 9999999999.99999999 Round to 8 decimals.

Approved Yield (AY) P11 43 99999999.99 None

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row cotton, the approved yield is the 

converted approved yield from the P15 record 

with skip row (yield conversion factor) applied.

Standard Deviation Quantity ADM 999.999999999 None

Edit with ADM Combo Revenue Factor, 

"A01030". 

Search the Combo Revenue Factor "A01030" for 

the Standard Deviation Quantity using Lookup 

Rate.

Log Variance Quantity (LnVar) Internal 999999.99999999 Round to 8 decimals.

Price Volatility Factor ADM 9.99

Edit with ADM Price, "A00810".

(Price Volatility Factor^2) is rounded to 2 

decimal spaces before adding the 1 and taking 

the natural log of the sum.

log Mean Quantity (LnMean) Internal 999999.99999999 Round to 8 decimals.

Projected Price ADM 99999.9999 Edit with ADM Price, "A00810".

Contract Price P11 47 9999.9999 None Contract price as addressed in Section 1, 

capped with Max Contract Price from ADM.

Yield Draw 

QuantitySequence Number

=

For Sequence Number 1 to 500

Yield Draw Quantity

Yield Draw Quantity ADM S99.999999999 None

Edit with ADM Beta, "A01020".

Use the Beta ID field from ADM Insurance Offer, 

"A00030" and the Beta "A01020" to obtain the 

applicable draws. There should be 500 draws 

(or sequence numbers) per Beta Id for every 

distinct Beta Id in the Insurance Offer ADM, 

"A00030".

Price Draw QuanitySequence 

Number

=

For Sequence Number 1 to 500

Price Draw Quantity

Price Draw Quantity ADM S99.999999999 None

Edit with ADM Beta, "A01020".

Use the Beta ID field from ADM Insurance Offer, 

"A00030" and the Beta "A01020" to obtain the 

applicable draws. There should be 500 draws 

(or sequence numbers) per Beta Id for every 

distinct Beta Id in the Insurance Offer ADM

LnMean = Ln(Projected Price or Contract Price) – LnVar / 2

=

Approved Yield * Standard Deviation Quantity / 100 Adjusted Standard 

Deviation Quantity =

LnVar Ln((Price Volatility Factor)^2 + 1)
2/4/2015 Page 10 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Simulated Yield Protection 

Losses Quantity (SimYPLosses) Internal 9999999999.99999999999 Round to 12 decimals.

Approved Yield (AY) P11 43 99999999.99 None

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Coverage Level Percent (covlvl) P14 34 9.9999 None

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) this will be Effective 

Coverage Level Percent. See Section 16 for 

Option Code "TA" (Trend Adjustment) and "YE" 

(Yield Exclusion).

Yield Draw Quantityi (Yieldi) ADM S99.999999999 None

Simulated Revenue Protection 

Losses Quantity(SimRPLosses) Internal 9999999999.99999999999 Round to 12 decimals.

Approved Yield (AY) P11 43 99999999.99 None

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Coverage Level Percent (covlvl) P14 34 9.9999 None

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) this will be Effective 

Coverage Level Percent. See Section 16 for 

Option Code "TA" (Trend Adjustment) and "YE" 

(Yield Exclusion).

Yield Draw Quantityi (Yieldi) ADM S99.999999999 None

Projected Priced or Contract 

Price (ProjPrice) ADM 99999.9999 None Edit with ADM Price, "A00810". Contract Price as addressed in Section 1.

=

Simulated Revenue 

Protection Losses 

Quantity

500

 ∑ Round(MAX(0, AY * covlvl - Round(MAX(0, Yieldi * 

i=1 AdjStndDev + AdjMean),12)), 12) =

Simulated Yield 

Protection Losses 

Quantity

 500

∑ Round(MAX(0, AY * covlvl * Round(MAX(ProjPrice, 

i=1 Round(MIN(2 * ProjPrice, Round(e(Pricei * 

Round(√LnVar,12) + LnMean),12)),12)),12) -

 (Round(MAX(0, Yieldi * AdjStdDev + 

AdjMean),12) *

 Round(MIN(2 * ProjPrice, Round(e

(Pricei * 

Round(√LnVar,12) + LnMean),12)), 12))),12)
2/4/2015 Page 11 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Simulated Revenue Protection 

with Harvest Price Exclusion 

Losses Quantity 

(SimRPhpeLosses)

Internal 9999999999.99999999999 Round to 12 

decimals.

Approved Yield (AY) P11 43 99999999.99 None

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Coverage Level Percent (covlvl) P14 34 9.9999 None

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) this will be Effective 

Coverage Level Percent. See Section 16 for 

Option Code "TA" (Trend Adjustment) and "YE" 

(Yield Exclusion).

Projected Priced or Contract 

Price (ProjPrice) ADM 99999.9999 None Edit with ADM Price, "A00810". Contract Price as addressed in Section 1.

500

 ∑Round(MAX(0, AY * covlvl * ProjPrice - (Round(MAX(0, 

Yieldi

 *

i=1 AdjStdDev + AdjMean),12) * Round(MIN(2 * 

ProjPrice, 

 Round(e(pricei

 * Round(√LnVar,12) + LnMean), 12)),12))),12)

=

Simulated Revenue 

Protection with Harvest 

Price Exclusion Losses 

Quantity
2/4/2015 Page 12 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Simulated Yield 

Protection Base Premium 

Rate

= (Simulated Yield Protection Losses Quantity / 500) / 

(Approved Yield * Coverage Level Percent)

Simulated Yield Protection Base 

Premium Rate Internal 999999.99999999 Round to 8 decimals.

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) Effective Coverage Level 

Percent will replace Coverage Level Percent.

Simulated Revenue 

Protection Base Premium 

Rate

=

(Simulated Revenue Protection Losses / 500) / (Approved 

Yield * Coverage Level Percent * (Projected Price or 

Contract Price))

Simulated Revenue Protection 

Base Premium Rate Internal 999999.99999999 Round to 8 decimals.

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) Effective Coverage Level 

Percent will replace Coverage Level Percent.

Simulated Revenue 

Protection with Harvest 

Price Exclusion Base 

Premium Rate

=

(Simulated Revenue Protection with harvest Price Exclusion 

Losses Quantity / 500) / (Approved Yield * Coverage level 

Percent * (Projected Price or Contract Price))

Simulated Revenue Protection 

with Harvest Price Exclusion 

Base Premium Rate

Internal 999999.99999999 Round to 8 decimals.

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) Effective Coverage Level 

Percent will replace Coverage Level Percent.

Preliminary Revenue 

Protection Premium Add 

on Rate

=

MAX(Simulated Revenue Protection Base Premium Rate - 

Simulated Yield Protection Base Premium Rate, 0.01 * Base 

Premium Rate)

Preliminary Revenue Protection 

Premium Add on Rate Internal 999999.99999999 Round to 8 decimals.

This is a control meant to ensure that the 

premium rate associated with Revenue 

Protection is at least 1% greater than the basic 

Base Premium Rate where the Price Volatility 

Factor is NOT EQUAL to 0.

Preliminary Revenue 

Protection with Harvest 

Price Exclusion Add on 

Rate 

=

MAX(Simulated Revenue Protection with Harvest Price 

Exclusion Base Premium Rate - Simulated Yield Protection 

Base Premium Rate, -0.5 * Base Premium Rate)

Preliminary Revenue Protection 

with Harvest Price Exclusion 

Add on Rate 

Internal 999999.99999999 Round to 8 decimals.

This is a control meant to ensure that the 

premium rate associated with Revenue 

Protection with Harvest Price Exclusion will not 

be less than half of the Base Premium Rate 

where the Price Volatility Factor is NOT EQUAL 

to 0.

This section is for calculation the 2010 

Revenue Assurance Optional Unit Level Base 

Premium Rate for coverage level percents 65 

thru 85 where applicable. Then it is used in 

conjunction with the Base Premium Rate and 

Revenue Add On Rates to compute capped 

Revenue Add On Rates. This table is set up 

such that the only value that will change from 

year to year is the Commodity Year. By doing 

this we are fixing a point where the premium 

calculation method was changed and applying 

an exponential capping over time.

If there is NOT a corresponding row in the 

Historical Revenue Capping ADM, "A01110", 

then this calculation does not need to be 

performed. Furthermore, since coverage level 

percents 50, 55, 60 did not exist for Revenue 

Assurance (RA) historically capping does not 

need to be performed for those coverage level 

percents as well. If TA is applicable then this 

will be based on the TA Effective Coverage 

Level Percent. See next statement.

When TA and YE Option is selected, this 

section does not apply when the Effective 

Coverage Level is less than 65%.

Capping Yield Ratio Internal 9.99 Round to 2 decimals. Cup at 0.50 and Cap at 1.50.

 Rate Yield P15 35 99999999.99 None

For skip row commodities, the rate yield is the 

converted rate yield from the P15 record with 

skip row (yield conversion factor) applied.

Capping Reference Yield ADM 99999.99 None Edit with ADM Historical Revenue Capping, 

"A01110".

Prior Capping Yield Ratio Internal 9.99 Round to 2 decimals. Cup at 0.50 and Cap at 1.50.

 Rate Yield P15 35 99999999.99 None

For skip row commodities, the rate yield is the 

converted rate yield from the P15 record with 

skip row (yield conversion factor) applied.

Rate Yield / Prior Capping Reference Yield

Capping Yield Ratio = Rate Yield / Capping Reference Yield

Prior Capping Yield Ratio =

Section 6: Historical Revenue Capping (Applicable only for Plans 02 and 03)

 Note: This Section will not apply if record has a Written Agreement.
2/4/2015 Page 13 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Prior Capping Reference Yield ADM 99999.99 None Edit with ADM Historical Revenue Capping, 

"A01110".

Capping Rate Multiplier Internal 999999.99999999 Round to 8 decimals.

Capping Exponent Value ADM S99.999 None Edit with ADM Historical Revenue Capping, 

"A01110".

Prior Capping Rate Multiplier Internal 999999.99999999 Round to 8 decimals.

Prior Capping Exponent Value ADM S99.999 None Edit with ADM Historical Revenue Capping, 

"A01110".

If Rate Method Code = Fixed, "F":

Sub County Rate

Historical Capping Base Rate Internal 999999.99999999 Round to 8 decimals.

If Rate Method Code = Additive, "A":

Sub County Rate + (Capping Rate Multiplier * Capping 

Reference Rate + Capping Fixed Rate)

Sub County Rate ADM 9.9999 None

Edit with ADM Sub County Rate, "A01050".

See Section 21 for Written Agreement Sub 

County Rate information.

If Rate Method Code = Multiplicative, "M":

Sub County Rate * (Capping Rate Multiplier * Capping 

Reference Rate + Capping Fixed Rate)

Capping Reference Rate ADM 9.9999 Edit with ADM Historical Revenue Capping, 

"A01110".

Otherwise:

(Capping Rate Multiplier * Capping Reference Rate + 

Capping Fixed Rate)

Capping Fixed Rate ADM 9.9999 Edit with ADM Historical Revenue Capping, 

"A01110".

If Rate Method Code = Fixed "F":

Sub County Rate

Historical Prior Capping Base 

Rate Internal 999999.99999999 Round to 8 decimals.

If Rate Method Code = Additive, "A":

Sub County Rate + (Prior Capping Rate Multiplier * Prior 

Capping Reference Rate + Prior Capping Fixed Rate)

Sub County Rate ADM 9.9999 None

Edit with ADM Sub County Rate, "A01050".

See Section 21 for Written Agreement Sub 

County Rate information.

If Rate Method Code = Multiplicative, "M":

Sub County Rate * (Prior Capping Rate Multiplier * Prior 

Capping Reference Rate + Prior Capping Fixed Rate)

Prior Capping Reference Rate ADM 9.9999 Edit with ADM Historical Revenue Capping, 

"A01110".

Otherwise:

(Prior Capping Rate Multiplier * Prior Capping Reference 

Rate + Prior Capping Fixed Rate)

Prior Capping Fixed Rate ADM 9.9999 Edit with ADM Historical Revenue Capping, 

"A01110".

Historical Basic Unit Base 

Rate = .9 * MIN(.999, Historical Prior Capping Base Rate * 1.2, Historical Capping Base Rate) Historical Basic Unit Base Rate Internal 999999.99999999 Round to 8 decimals.

= Historical Capping Base 

Rate

Capping Rate Multiplier = Capping Yield Ratio ^Capping Exponent Value

= Historical Prior Capping 

Base Rate

 

= Prior Capping Yield Ratio ^Prior Capping Exponent Value Prior Capping Rate 

Multiplier

 
2/4/2015 Page 14 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

When Unit Structure Code is equal to Optional Unit, "OU", 

"UA", "UD", or Basic Unit, "BU":

Coverage Level Percent P14 34 9.9999 None

For Option Code "TA" (Trend Adjustment) wnd 

"YE" (Yield Exclusion) this will be Effective 

Coverage Level Percent. See Section 16 for 

Option Code "TA" (Trend Adjustment) and "YE" 

(Yield Exclusion).

Historical Revenue Protection 

Base Premium Rate Internal 9999999999.99999999

Round each 

intermittent Beta * 

calculation to 8 

decimals as it has 

been done 

historically.

Beta 0 Factor - Beta 14 Factor ADM S99.999999999 None Edit with ADM Historical Revenue Capping, 

"A01110".

Price Volatility Factor ADM 9.99 None Edit with ADM Price, "A00810".

Unit Residual Factor ADM 999.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

=

When Unit Structure Code is equal to Enterprise Unit, 

"EU" & "EP":

Replace 'Unit Residual Factor' with 'Enterprise Unit 

Residual Factor'

Enterprise Unit Residual Factor ADM 999.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

[beta0 Factor + 

Beta 1 Factor * Historical Basic Unit Base Rate + Beta 2 

Factor * Historical Basic Unit Base Rate ^2 + Beta 3 Factor * 

Coverage Level Percent + 

Beta 4 Factor * Coverage Level Percent ^2 + 

Beta 5 Factor * Approved Yield / Capping Reference Yield + 

Beta 6 Factor * (Approved Yield / Capping Reference 

Yield)^2 + 

Beta 7 Factor * Price Volatility Factor + 

Beta 8 Factor * Price Volatility Factor^2 + 

Beta 9 Factor * Historical Basic Unit Base Rate * Coverage 

Level Percent + 

Beta 10 Factor * Historical Basic Unit Base Rate * Approved 

Yield / Capping Reference Yield + 

Beta 11 Factor * Historical Basic Unit Base Rate * Price 

Volatility Factor + 

Beta 12 Factor * Coverage Level Percent * Approved Yield / 

Capping Reference Yield + 

Beta 13 Factor * Coverage Level Percent * Price Volatility 

Factor + 

Beta 14 Factor * (Approved Yield / Capping Reference 

Yield) * Price Volatility Factor ] * Unit Residual Factor X 1.1

=

Historical Revenue 

Protection Base Premium 

Rate
2/4/2015 Page 15 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

When Unit Structure Code is equal to Optional Unit, "OU", 

"UA", "UD", or Basic Unit, "BU":

Coverage Level Percent P14 34 9.9999 None

For Option Code "TA" (Trend Adjustment) this 

will be Effective Coverage Level Percent. See 

Section 16 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Historical Revenue Protection 

with Harvest Price Exclusion 

Base Premium Rate

Internal 9999999999.99999999

Round each 

intermittent Beta * 

calculation to 8 

decimals as it has 

been done 

historically.

Beta 0 Factor - Beta 14 Factor ADM S99.999999999 None Edit with ADM Historical Revenue Capping, 

"A01110".

Price Volatility Factor ADM 9.99 None Edit with ADM Price, "A00810".

Unit Residual Factor ADM 999.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

=

When Unit Structure Code is equal to Enterprise Unit, 

"EU" & "EP":

Replace 'Unit Residual Factor' with 'Enterprise Unit 

Residual Factor'

Enterprise Unit Residual Factor ADM 999.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Capped Revenue Protection 

Add on Rate Internal 9999999999.99999999 Round to 8 decimals.

Use the Preliminary Add On Rates for Insurance 

Plan Code Revenue Protection, "02" or Revenue 

Protection with Harvest Price Exclusion, "03" 

from section 5, the Base Premium Rate from 

section 2 to calculate the Capped Revenue add 

on factors.

Base Premium Rate P11 94 999999.99999999 None

Commodity Year P14 10 CCYY None

Capping Year ADM CCYY None Edit with ADM Historical Revenue Capping, 

"A01110".

Capped Revenue Protection 

with Harvest Price Exclusion 

Add on Rate

Internal 9999999999.99999999 Round to 8 decimal

Use the Preliminary Add On Rates for Insurance 

Plan Code Revenue Protection, "02" or Revenue 

Protection with Harvest Price Exclusion, "03" 

from section 5, the Base Premium Rate from 

section 2 to calculate the Capped Revenue add 

on factors.

Base Premium Rate P11 94 999999.99999999 None

Commodity Year P14 10 CCYY None

Capping Year ADM CCYY None Edit with ADM Historical Revenue Capping, 

"A01110".

MIN(Base Premium Rate + Preliminary Revenue Protection 

with Harvest Price Exclusion Add On Rate, Historical 

Revenue Protection with Harvest Price Exclusion Base 

Premium Rate * 1.2^(Commodity Year - Capping Year)) - 

Base Premium Rate

=

Capped Revenue 

Protection with Harvest 

Price Exclusion Add on 

Rate

MIN(Base Premium Rate + Preliminary Revenue Protection 

Add On Rate, Historical Revenue Protection Base Premium 

Rate * 1.2^(Commodity Year - Capping Year)) - Base 

Premium Rate

= Capped Revenue 

Protection Add on Rate

=

Historical Revenue 

Protection with Harvest 

Price Exclusion Base 

Premium Rate

[beta0 Factor + 

Beta 1 Factor * Historical Basic Unit Base Rate + Beta 2 

Factor * Historical Basic Unit Base Rate ^2 + Beta 3 Factor * 

Coverage Level Percent + 

Beta 4 Factor * Coverage Level Percent ^2 + 

Beta 5 Factor * Approved Yield / Capping Reference Yield + 

Beta 6 Factor * (Approved Yield / Capping Reference 

Yield)^2 + 

Beta 7 Factor * Price Volatility Factor + 

Beta 8 Factor * Price Volatility Factor^2 + 

Beta 9 Factor * Historical Basic Unit Base Rate * Coverage 

Level Percent + 

Beta 10 Factor * Historical Basic Unit Base Rate * Approved 

Yield / Capping Reference Yield + 

Beta 11 Factor * Historical Basic Unit Base Rate * Price 

Volatility Factor + 

Beta 12 Factor * Coverage Level Percent * Approved Yield / 

Capping Reference Yield + 

Beta 13 Factor * Coverage Level Percent * Price Volatility 

Factor + 

Beta 14 Factor * (Approved Yield / Capping Reference 

Yield) * Price Volatility Factor ] * Unit Residual Factor X 1.1
2/4/2015 Page 16 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

The Whole Farm Unit Discount is only 

applicable to the Revenue Protection and 

Revenue Protection with Harvest Price 

Exclusion Insurance Plans, unless the Special 

Provisions allow Whole Farm Units for other 

Insurance Plans.

Whole Farm Units will now mandate that 

producers include both their spring and fall 

planted commodities into the whole farm unit 

for commodity/plans offering Whole Farm 

Units.

Malting Barley Coverage is NOT applicable for 

Whole Farm Unit. Malting Barley Coverage is 

provided as a separate Basic Unit.

Lookup Rate Internal 9999999999.9999 Round to 4 decimals.

Revenue Lookup Rate Internal 9999999999.9999 Round to 4 decimals. From Section 2.

Revenue Lookup Adjustment 

Factor Internal 9.99999999 None From Section 3.

Mean Quantity commodityj ADM 999.999999999 None

Edit with ADM Combo Revenue Factor, 

"A01030".

 Search the Combo Revenue Factor, "A01030" 

for the Mean Quantity, When the Lookup Rate 

= Base Rate

 Lookup Rate commodityj Internal 9.9999 None

Base Rate commodityj ADM 9.9999 None Edit with ADM Combo Revenue Factor, 

"A01030".

Section 7: Whole Farm Unit Base Premium Rate

Lookup Rate = Revenue Lookup Rate * Revenue Lookup Adjustment Factor

Mean Quantity commodityj = Mean Quantity commodityj WHERE Lookup Rate commodityj = 

Base Rate commodityj
2/4/2015 Page 17 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Standard Deviation Quantity 

commodityj

ADM 999.999999999 None

Edit with ADM Combo Revenue Factor, 

"A01030".

 Search the Combo Revenue Factor, "A01030" 

for the Standard Deviation Quantity, When the 

Lookup Rate = Base Rate

 Lookup Rate commodityj Internal 9.9999 None

Base Rate commodityj ADM 9.9999 None Edit with ADM Combo Revenue Factor, 

"A01030".

Adjusted Mean Quantity 

commodityj

Internal 999999.999999999 Round to 8 decimals.

Approved Yield commodityj P11 43 99999999.99 None

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Adjusted Standard Deviation 

Quantity commodityj

Internal 9999999999.99999999 Round to 8 decimals.

Approved Yield commodityj P11 43 99999999.99 None

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Log Variancecommodityj 

(LnVar) Internal 999999.99999999 Round to 8 decimals.

Price Volatility Factorcommodityj ADM 9.99 None

Edit with ADM Price, "A00810".

(Price Volatility Factor^2) is rounded to 2 

decimal spaces before adding the 1 and taking 

the natural log of the sum.

= Approved Yield commodityj * 

Standard Deviation Quantity commodityj / 100

ln((Price Volatility Factorcommodityj = )^2 + 1)

Adjusted Standard 

Deviation Quantity 

commodityj

= Standard Deviation 

Quantity commodityj

LnVariance commodityj

Approved Yield commodityj * Mean Quantity commodityj = / 100 Adjusted Mean Quantity 

commodityj

Standard Deviation Quantity commodityj WHERE Lookup Rate 

commodityj = Base Rate commodityj
2/4/2015 Page 18 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

log Meancommodityj (LnMean) Internal 999999.99999999 Round to 8 decimals.

Projected Price or Contract 

Pricecommodityj

ADM 99999.9999 Edit with ADM Price, "A00810". Contract Price 

as addressed in Section 1.

Yield Draw Quantity 

commodityj Sequence Number

= Yield Draw Quantitycommodity Yield Draw Quantity ADM S99.999999999 None

ADM Insurance Offer, "A00030", and Beta, 

"A01020", should be used to obtain the 

applicable draws. There should be 500 Draws 

(or sequence numbers) per Beta Id in the ADM 

Beta, "A01020" for every distinct Beta Id in the 

ADM Insurance Offer, "A00030".

Price Draw Quantity 

commodityj Sequence Number

= Price Draw Quantitycommodity Price Draw Quantity ADM S99.999999999 None

ADM Insurance Offer, "A00030", and Beta, 

"A01020", should be used to obtain the 

applicable draws. There should be 500 Draws 

(or sequence numbers) per Beta Id in the ADM 

Beta, "A01020" for every distinct Beta Id in the 

ADM Insurance Offer, "A00030".

LnMean commodityj = ln(Projected Price or Contract Pricecommodityj) – 

LnVariancecommodityj / 2
2/4/2015 Page 19 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Simulated Revenue Protection 

Losses Whole Farm 

(SimRPLossesWF)

Internal 9999999999.99999999999 Round to 12 

decimals.

Simulated Revenue Protection Losses for All 

Commodity/Acreage report line in the Whole 

Farm Unit.

Coverage Level Percentcommodityj 

(covlvl) P14 34 9.9999 None

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) this will be Effective 

Coverage Level Percent. See Section 16 for 

Option Code "TA" (Trend Adjustment) and "YE" 

(Yield Exclusion).

Approved Yieldcommodityj (AY) P11 43 99999999.99 None

Approved Yield for each Commodity/Acreage 

report line in the Whole Farm Unit.

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Reported Acreagecommodityj 

(Acres) P11 49 999999.99 None

Reported Acreage must equal the sum of all 

Land, P27, Reported Acreage. 

Reported Acreage for each Commodity/Acreage 

report line in the Whole Farm Unit.

Projected Price or Contract 

Pricecommodityj (ProjPrice) ADM 99999.9999 None

Edit with ADM Price, "A00810".

Projected Price or Contract Price for each 

Commodity/Acreage report line in the Whole 

Farm Unit.

Price Draw Quanitycommodityji 

(Price) ADM S99.999999999 None Price Draw Quantity for each Commodity 

/Acreage report line in the Whole Farm Unit.

Log Variancecommodityj (LnVar) Internal 999999.99999999 None Log Variance for each Commodity/Acreage 

report line in the Whole Farm Unit.

log Meancommodityj (LnMean) Internal 999999.99999999 None Log Mean for each Commodity/Acreage report 

line in the Whole Farm Unit.

Yield Draw Quantitycommodityji 

(Yield) ADM S99.999999999 None

Yield Draw Quantity for each 

Commodity/Acreage report line in the Whole 

Farm Unit.

Adjusted Standard Deviation 

Quantitycommodityj (AdjStnDev) Internal 9999999999.99999999 None

Adjusted Standard Deviation Quantity for each 

Commodity/Acreage report line in the Whole 

Farm Unit.

Adjusted Mean 

Quantitycommodityj (AdjMean) Internal 999999.999999999 None

Adjusted Mean Quantity for each 

Commodity/Acreage report line in the Whole 

Farm Unit.

500 all Commodities

 ∑ Round(MAX(0,∑ Aycommodityj * 

i=1 j=

Acrescommodityj * covlvlcommodityj * 

Round(MAX(ProjPricecommodityj, Round(MIN(2 

* ProjPricecommodityj, Round(e

(Pricecommodityji * 

Round(√LnVarcommodityj,12) + 

LnMeancommodityj),12)),12)),12) - 

all Commodities

∑ Round(MAX(0,Round(Yieldcommodityji * 

j=

AdjStdDevcommodityj + AdjMeancommodityj,12)),12) 

* Round(MIN(2 * ProjPricecommodiyj, 

Round(e

(Pricecommodityji * Round(√LnVarcommodityj,12) + 

LnMeancommodityj),12)),12) * 

Round(Acrescommodityj,12)), 12)

=

Simulated Revenue 

Protection Losses Whole 

Farm
2/4/2015 Page 20 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Simulated Revenue Protection 

Harvest Price Excluded Losses 

Whole Farm 

(SimRPhpeLossesWF)

Internal 9999999999.99999999999 Round to 12 

decimals.

Simulated Revenue Protection Harvest Price 

Excluded Losses for All Commodity/Acreage 

report lines in the Whole Farm Unit.

Coverage Level Percentcommodityj 

(covlvl) P14 34 9.9999 None

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) this will be Effective 

Coverage Level Percent. See Section 16 for 

Option Code "TA" (Trend Adjustment) and "YE" 

(Yield Exclusion).

Approved Yieldcommodityj (AY) P11 43 99999999.99 None

Approved Yield for each Commodity/Acreage 

report line in the Whole Farm Unit.

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Reported Acreagecommodityj 

(Acres) P11 49 999999.99 None

Reported Acreage must equal the sum of all 

Land, P27, Reported Acreage. 

Reported Acreage for each Commodity/Acreage 

report line in the Whole Farm Unit.

Projected Price or Contract 

Pricecommodityj (ProjPrice) ADM 99999.9999 None

Edit with ADM Price, "A00810".

Projected Price or Contract Price (as addressed 

in Section 1) for each Commodity/Acreage 

report line in the Whole Farm Unit.

Yield Draw Quantitycommodityji 

(Yield) ADM S99.999999999 None

Yield Draw Quantity for each 

Commodity/Acreage report line in the Whole 

Farm Unit.

Adjusted Standard Deviation 

Quantitycommodityj (AdjStnDev) Internal 9999999999.99999999 None

Adjusted Standard Deviation Quantity for each 

Commodity/Acreage report line in the Whole 

Farm Unit.

Adjusted Mean 

Quantitycommodityj (AdjMean) Internal 999999.999999999 None

Adjusted Mean Quantity for each 

Commodity/Acreage report line in the Whole 

Farm Unit.

Price Draw Quanitycommodityji 

(Price) ADM S99.999999999 None

Price Draw Quantity for each 

Commodity/Acreage report line in the Whole 

Farm Unit.

Log Variancecommodityj (LnVar) Internal 999999.99999999 None Log Variance for each Commodity/Acreage 

report line in the Whole Farm Unit.

log Meancommodityj (LnMean) Internal 999999.99999999 None Log Mean for each Commodity/Acreage report 

line in the Whole Farm Unit.

Coverage Level Percentcommodityj

(covlvl) P14 34 9.9999 None

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) this will be Effective 

Coverage Level Percent. See Section 16 for 

Option Code "TA" (Trend Adjustment) and "YE" 

(Yield Exclusion).

Revenue Protection Whole 

Farm Rate Internal 9999999999.99999999 Round to 8 decimals. 

500 all commodities

∑ Round(MAX (0, ∑covlvlcommodityj * 

i=1 j=

AYcommodityj

 * ProjPricecommodityj

 * Acrescommodityj) - 

all commodities

∑ Round(MAX(0, Round(Yieldcommodityji * 

j=

AdjStdDevcommodityj + AdjMeancommodityj,12)),12) 

* Round(MIN(2 * ProjPricecommodityj, 

Round(e

(Pricecommodityji * Round(√LnVarcommodityj,12) + 

LnMeancommodityj),12)),12) * 

Round(Acrescommodityj,12)), 12)

=

Simulated Revenue 

Protection Harvest Price 

Excluded Losses Whole 

Farm

Revenue Protection 

Whole Farm Rate =

 SimRPLossesWF

 500

__________________________________________

 all commodities

∑(covlvlcommodityj * AYcommodityj * ProjPricecommodityj * 

j = 

 
2/4/2015 Page 21 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Projected Price or Contract 

Pricecommodityj (ProjPrice) ADM 99999.9999 None

Edit with ADM Price, "A00810".

Projected Price or Contract Price (as addressed 

in Section 1) for each Commodity/Acreage 

report line in the Whole Farm Unit.

Coverage Level Percentcommodityj

(covlvl) P14 34 9.9999 None

For Option Code "TA" (Trend Adjustment) and 

"YE" (Yield Exclusion) this will be Effective 

Coverage Level Percent. See Section 16 for 

Option Code "TA" (Trend Adjustment) and "YE" 

(Yield Exclusion).

Revenue Protection with 

Harvest Price Exclusion Whole 

Farm Rate

Internal 9999999999.99999999 Round to 8 decimals. 

Projected Price or Contract 

Pricecommodityj (ProjPrice) ADM 99999.9999 None

Edit with ADM Price, "A00810".

Projected Price or Contract Price (as addressed 

in Section 1) for each Commodity/Acreage 

report line in the Whole Farm Unit.

Whole Farm Base 

Premium Rate = Revenue Protection Whole Farm Rate Whole Farm Base Premium 

Rate Internal 9999999999.99999999 None

Whole Farm Base 

Premium Rate = Revenue Protection with Harvest Price Exclusion Whole Farm Rate

Whole Farm Base Premium 

Rate Internal 9999999999.99999999 None

Revenue Protection with 

Harvest Price Exclusion 

Whole Farm Rate

=

 SimRPhpeLossesWF

 500

__________________________________________

all commodities

∑(covlvlcommodityj * AYcommodityj * ProjPricecommodityj * 

j = 

Acrescommodityj) 

 

 

 

 

 

 

 

Acrescommodityj) 

When Insurance Plan Code equals Revenue Protection with Harvest Price Exclusion, 

"03":

When Insurance Plan Code equals Revenue Protection, "02":
2/4/2015 Page 22 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

The Premium Rate for ALL Unit Structures 

should be capped at .999 in the event various 

adjustments to the Base Premium Rate would 

cause it to exceed 1.0.

Premium Rate Internal 9999999999.99999999 Round to 8 decimals.

Premium Rate is capped at 0.99900000.

For situations where the option factors vary by 

Commodity, a reported Acreage weighted 

average of the Option Factors should be used 

to determine the Multiplicative and Additive 

Optional Rate adjustments to be used in the 

computation of the Premium Rate for Whole 

Farm Unit.

Total Reported Acreage Internal 99999999.99 None Total Reported Acreage for the Whole Farm 

including Prevented Planting.

Set Capped Revenue Add On Factor as follows: 

Premium Rate =

MIN(.999, Base Premium Rate * Unit Structure Discount 

Factor * Multiplicative Optional Rate Adjustment Factor+ 

Additive Optional Rate Factor + Capped Revenue Add On 

Factor)

Premium Rate Internal 9999999999.99999999 Round to 8 decimals.

If Insurance Plan Code equals 01, Capped 

Revenue Add On Factor will equal zero. 

If Unit Structure Code does not equal Whole 

Farm (WU), set Capped Revenue Add On Factor 

as follows: 

If Section 6 is applicable, Capped Revenue Add 

On Factor will equal Capped Revenue 

Protection Add On Rate when Insurance Plan 

Code equals 02 or Capped Revenue Protection 

with Harvest Price Exclusion Add On Rate when 

Insurance Plan Code equals 03. 

If Section 6 is not applicable, Capped Revenue 

Add On Factor will equal Preliminary Revenue 

Protection Add On Rate when Insurance Plan 

Code equals 02 or Preliminary Revenue 

Protection with Harvest Price Exclusion Add On 

Rate when Insurance Plan Code equals 03.

Section 8: Premium Rate

When Unit Structure Code equals Whole Farm Unit, "WU":

When Unit Structure Code DOES NOT EQUAL Whole Farm Unit, "WU":

MIN(.999, 

Round(Whole Farm Base Premium Rate 

* Sum ((Reported Acreage * Multiplicative Optional Rate 

Adjustment Factor) / Sum(Total Reported Acreage) for 

Whole Farm including Prevented Planting) 

+ Sum ((Reported Acreage * Additive Optional Rate 

Adjustment Factor) / Sum(Total Reported Acreage) for 

Whole Farm including Prevented Planting), 8))

Premium Rate =
2/4/2015 Page 23 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Preliminary Total Premium Internal 9999999999 Round to whole 

number.

Experience Factor P11 48 9.999 None Experience Factor is only applicable for 

Insurance Plan Code Yield Protection, "01".

Premium Surcharge Percent Internal Use when the Approved Yield Had a Cup or 

Surcharge applied.

Total Premium Multiplicative 

Optional Rate Adjustment 

Factor

ADM 9.9999 None

If Option Rate with Rate Method Code equal 

"T". Edit with ADM Option Rate, "A01060". 

Currently this will be used for Short Rate 

Option.

Total Premium Amount P11 92 9999999999 Round to whole 

number.

Multiple Commodity 

Adjustment Factor ICE 9999.999 None Edit with ICE Multiple Cropping, "D00063". Used when there is a first Commodity Loss.

Subsidy Amount P11 90 9999999999 Round to whole 

number.

If this record qualifies for Beginning Farmer and 

Rancher or Native Sod, see Section 24 for 

subsidy calculations.

Subsidy Percent ADM 9.999 None Edit with ADM Subsidy Percent, "A00070".

Producer Premium 

Amount = Total Premium Amount - Subsidy Amount Producer Premium Amount P11 93 9999999999 Round to whole number.

Subsidy Amount

Preliminary Total 

Premium =

Premium Liability Amount * Premium Rate * Experience 

Factor * Premium Surcharge Percent * Total Premium 

Multiplicative Optional Rate Adjustment Factor

Preliminary Total Premium * Multiple Commodity 

Adjustment Factor Total Premium Amount =

= Total Premium Amount * Subsidy Percent

Section 9: Total Premium Amount, Subsidy Amount, and Producer Premium Amount
2/4/2015 Page 24 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

If either the Malting Barley Option A or 

Malting Barley option B is chosen, a new 

record(s) will need to be prepared for this 

endorsement. These record should meet the 

following criteria:

1) The acreage records for the MA or MB 

records should be less than or equal to the 

acreage of the base offer

2) The Base Offer will not have the MA/MB 

option returned in the option field

3) The Acreage records with the MA or MB 

option will have the MA or MB option 

indicated in the option Field.

Malting Barley Option A Requirements:

To qualify for this option, the producer must:

1) Provide acceptable Malting Barley sales 

records for at least the 4 most recent 

Commodity Years and the number of acres 

planted to malting varieties.

2) If produced under a contract or price 

agreement, a copy of the current contract or 

price agreement must be provided on or 

before the acreage reporting date if the 

additional value price from the contract/price 

agreement is to be used for determining 

liability.

Malting Barley Option B Requirements:

To qualify for this option, the producer must:

1) Have planted Malting Barley for at least one 

of the three Commodity Years directly 

preceding the previous Commodity Year

2) Sold at least 75% of the contracted amount 

for the Commodity Year such contract was 

applicable

3) Provide a copy of the prior contract and 

acceptable records of sales.

Malting Barley Options MA & MB
2/4/2015 Page 25 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Approved Yield =

Approved Yield calculated in accordance with the Basic 

Provisions

OR

∑(Number of Bushels / Reported Acreage) / ∑ number of 

years 

Approved Yield P11 43 999999999.99

According to the Malting Barley Price and 

Quality Endorsement, the Approved Yield can 

be based on either the procedures established 

in the Basic Provisions, or by averaging the 

yields required to meet the qualifications for 

Option A.

Premium Guarantee Per Acre 

Amount Internal 999999999.99 Round to 1 decimals. Common Crop Insurance Policy definition 'production guarantee (per acre)'.

Approved Yield P11 43 99999999.99 None

Coverage Level Percent P14 34 9.9999 None

Price Election Amount = Additional Value Price Price Election Amount Internal 9999.9999 None

Price Election Amount will be set equal to the 

Additional Value Price. The Additional Value 

price is the difference between the contract 

price and regular Barley's Projected Price or the 

additional value price provided in the ADM if 

the contract price is not used.

1) The Contract Price: a) The sale price per 

bushel established in the contract or price 

agreement less the projected price for Barley. 

b) The amount per bushel (not including 

discounts or incentives) above the feed barley 

price that is determined at a later date, 

provided the method of determining the price 

is specified in the contract or price agreement. 

c) If the contract or price agreement has a 

variable price option, the price OR the method 

of determining a price that will be treated as 

the sale price.

2) The additional Value price indicated in the 

actuarial documents: a) if there is no malting 

barley contract. b) The contract or price 

agreement was not provided by the acreage 

reporting date.

3) The additional Value price: a) For Option A 

WILL NOT EXCEED $1.25. b) For Option B WILL 

NOT EXCEED $2.00.

Premium Guarantee Per 

Acre Amount = Approved Yield * Coverage Level Percent

Section 10: Liability Calculation
2/4/2015 Page 26 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Reported Acreage (Record 

1) = MIN(Total Reported Acreage, Malting Barley Contract 1 Bushels / Approved Yield)

Reported Acreage (Record 

2) = MIN(Total Reported Acreage - Reported Acreage for Record 1, Malting Barley Contract 2 Bushels / Approved Yield)

Reported Acreage (Record 

X) =

MIN(Total Reported Acreage - 

 x-1

 ∑Malting Barley Contract I, 

i=1 malting Barley Contract X)

Premium Guarantee Per 

Acre Amount = Approved Yield * Coverage Level Percent Premium Guarantee Per Acre Amount Internal 999999999.99 Round to 1 decimals.

Determine the Premium Guarantee Per Acre 

Amount and the Guarantee Per Acre Amount 

for each record. 

Common Crop Insurance Policy definition 

'production guarantee (per acre)'. 

If Late Planting applies:

Guarantee Per Acre 

Amount = Premium Guarantee Per Acre Amount * Guarantee 

Adjustment Factor Guarantee Per Acre Amount Internal 999999999.99 Round to 1 decimals.

Prevented Planting does not apply to Malting 

Barley Option A or Malting Barley Option B 

records.

Premium Total Guarantee 

Amount = Premium Guarantee Per Acre Amount * Price Election Amount * Reported Acreage

Premium Total Guarantee 

Amount Internal 99999999.99 Round to 2 decimals.

Total Guarantee Amount = Guarantee Per Acre Amount * Price Election Amount * 

Reported Acreage Total Guarantee Amount P11 100 99999999.99 Round to 2 decimals.

Premium Liability Amount = Premium Total Guarantee Amount * Insured Share Percent Premium Liability Amount Internal 9999999999 Round to whole 

number.

Liability Amount = Total Guarantee Amount * Insured Share Percent Liability Amount P11 91 9999999999 Round to whole 

number.

There may need to be multiple record is there 

are multiple contracts and/or there are more 

acres insured to yield more bushels than the 

contract(s) call for.

Acreage in excess of contracted acreage will be 

insured at the additional value price on the 

actuarial documents.

If there is not enough reported acres to support 

all of the contracts, Insurance will be limited to 

what the total reported acreage will support.

Reported Acreage Internal None
2/4/2015 Page 27 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Premium Rate Internal 9999999999.99999999 Round to 8 decimals.

Premium Rate is capped at 0.99900000.

To Determine the Premium Rate for the Malting 

Barley Option Records:

1) Use the Rate Yield as determined under 

normal procedures.

2) Process the Rate Yield through section 2 of 

these procedures as if it was a normal Yield 

Protection Plan of Insurance using the rating 

components for the regular Barley offer.

3) Find the Basic Unit Discount Factor to be 

applied later from section 3 of these 

procedures as if it was a normal Yield 

Protection Plan of Insurance

4) Find the applicable Malting Barley Option 

Factor to be applied later from section 4. This 

will be the only option factor applied to a 

Malting Barley record.

5) Sections 5, 6, 7 are not applicable for 

MA/MB records.

Multiplicative Optional Rate 

Adjustment Factor Internal 999999.9999

Additive Optional Rate 

Adjustment Factor Internal 999999.9999

MIN(.999, Base Premium Rate * Unit Structure Discount 

Factor * Multiplicative Optional Rate Adjustment Factor+ 

Additive Optional Rate Factor)

Premium Rate =

Section 11: Premium Rate
2/4/2015 Page 28 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Preliminary Total Premium Internal 9999999999 Round to whole 

number.

Experience Factor P11 48 9.999 None Experience Factor is only applicable for 

Insurance Plan Code Yield Protection, "01".

Premium Rate Surcharge 

Percent

Total Premium Amount P11 92 9999999999 Round to whole 

number.

Multiple Commodity 

Adjustment Factor ICE 9999.999 None Edit with ICE Multiple Cropping, "D00063".

Subsidy Amount P11 90 9999999999 Round to whole 

number.

If this record qualifies for Beginning Farmer and 

Rancher or Native Sod, see Section 24 for 

subsidy calculations.

Subsidy Percent ADM 9.999 None Edit with ADM Subsidy Percent, "A00070".

Producer Premium 

Amount = Total Premium Amount - Subsidy Amount Producer Premium Amount P11 93 9999999999 Round to whole number.

Information (Approved Yield, Reported 

Acreage, Insured Share Percent) will be 

obtained from Cotton P11 record and Rate 

Yield from P15 record associated with the 

Cottonseed record. CAT does not apply to Plan 

01 Cottonseed. Unit Structure Code 'WU' does 

not apply to Cottonseed.

Modified Yield Internal 99999999.99

Round to whole 

Number. 

Approved Yield P11 43 99999999.99 None

From Cotton P11 record.

For skip row cotton, the approved yield is the 

converted approved yield from the P15 record 

with skip row (yield conversion factor) applied.

 Option Conversion Factor ADM 9.9999 None Edit with ADM Option Rate, "A01060".

Premium Guarantee Per Acre 

Amount Internal 999999999.99

Round to whole 

number.

Coverage Level Percent P14 34 9.9999 None

Subsidy Amount = Total Premium Amount * Subsidy Percent

Preliminary Total 

Premium = Premium Liability Amount * Premium Rate * Experience 

Factor * Premium Rate Surcharge Percent

Total Premium Amount 

Modified Yield * Coverage Level Percent Premium Guarantee Per 

Acre Amount =

Cottonseed Endorsement Option 'SE' 

Section 13: Liability Calculation 

Section 12: Total Premium Amount, Subsidy Amount, and Producer Premium Amount

= Preliminary Total Premium * Multiple Commodity 

Adjustment Factor

Modified Yield = Approved Yield * Option Conversion Factor
2/4/2015 Page 29 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Guarantee Per Acre Amount Internal 999999999.99

Round to whole 

number.

Guarantee Adjustment Factor P11 72 0.999 None Edit with the Guarantee Adjustment ICE, 

"D00068".

Price Election Amount Internal 9999.9999

Round to nearest onetenth cent [$9.999]. Cottonseed will equal the Projected Price from 

ADM regardless of Price Election Percent for 

Cotton Lint.

Projected Price ADM 99999.9999

Price Election Percent ICE 9.9999 None Will always be 1.000 for Cottonseed.

Premium Total Guarantee 

Amount Internal 99999999.99 Round to 2 decimals.

Price Election Amount Internal 9999.9999 None

Reported Acreage P11 49 99999999.99 None From Cotton P11 record.

Total Guarantee Amount P11 100 99999999.99 Round to 2 decimals.

Price Election Amount Internal 9999.9999 None

Reported Acreage P11 49 999999.99 None From Cotton P11 record.

Premium Liability Amount Internal 9999999999 Round to whole 

number.

Insured Share Percent P11 44 9.9999 None From Cotton P11 record.

Liability Amount P11 91 9999999999 Round to whole 

number.

Insured Share Percent P11 44 9.9999 None From Cotton P11 record.

Guarantee Per Acre 

Amount =

When Guarantee Adjustment Type Code equals Late 

Planting, "L" OR Prevented Planting, "P":

Premium Guarantee Per Acre Amount * Guarantee 

Adjustment Factor

Price Election Amount = Projected Price * Price Election Percent

Premium Total Guarantee 

Amount = Premium Guarantee Per Acre Amount * Price Election 

Amount * Reported Acreage

Total Guarantee Amount = Guarantee Per Acre Amount * Price Election Amount * 

Reported Acreage

Premium Liability Amount = Premium Total Guarantee Amount * Insured Share Percent

Liability Amount = Total Guarantee Amount * Insured Share Percent
2/4/2015 Page 30 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Premium Rate Internal 9999999999.99999999 Round to 8 decimals.

To Determine the Premium Rate for the 

Cottonseed records:

1) Use the Rate Yield as determined under 

normal procedures.

2) Process the Rate Yield through section 2 of 

these procedures using the rating components 

for regular Cotton offer.

3) Find the Unit Structure Discount Factor to be 

applied later from section 3 of these 

procedures for regular Cotton offer.

4) Find the applicable Option Factors to be 

applied later from section 4 for regular Cotton 

offer. 

5) Sections 5, 6, 7 are not applicable for 

Cottonseed records.

Multiplicative Optional Rate 

Adjustment Factor Internal 999999.9999

Additive Optional Rate 

Adjustment Factor Internal 999999.9999

Preliminary Total Premium Internal 9999999999 Round to whole 

number.

Experience Factor P11 48 9.999 None Experience Factor is only applicable for 

Insurance Plan Code Yield Protection, "01".

Premium Rate Surcharge 

Percent

Total Premium Amount P11 92 9999999999 Round to whole 

number.

Multiple Commodity 

Adjustment Factor ICE 9999.999 None Edit with ICE Multiple Cropping, "D00063".

Subsidy Amount P11 90 9999999999 Round to whole 

number.

If this record qualifies for Beginning Farmer and 

Rancher or Native Sod, see Section 24 for 

subsidy calculations.

Subsidy Percent ADM 9.999 None Edit with ADM Subsidy Percent, "A00070".

Producer Premium 

Amount = Total Premium Amount - Subsidy Amount Producer Premium Amount P11 93 9999999999 Round to whole number.

Total Premium Amount = Preliminary Total Premium * Multiple Commodity 

Adjustment Factor

Preliminary Total 

Premium

Premium Rate =

MIN(.999, Base Premium Rate * Unit Structure Discount 

Factor * Multiplicative Optional Rate Adjustment Factor+ 

Additive Optional Rate Factor)

Section 14: Premium Rate

Total Premium Amount * Subsidy Percent

Section 15: Total Premium Amount, Subsidy Amount, and Producer Premium Amount

= Premium Liability Amount * Premium Rate * Experience 

Factor * Premium Rate Surcharge Percent

Subsidy Amount =
2/4/2015 Page 31 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Trend Adjustment Option (TA) and Yield 

Exclusion Option (YE) ONLY available in select 

counties for selected crops. See "white papers" 

for examples.

Effective Coverage Level 

Percent Internal 9.99 Rounded to 2 decimal places.

Coverage Level Percent P14 34 9.9999 None

Approved Yield P11 73 99999999.99 None

For APH Trend and Yield Exclusion, the 

Approved Yield will be the greater of the 

calculated approved Trended yield and the 

adjusted yield (the approved yield that would 

have been if TA wasn’t selected without the 

effects to cups or floors).

For skip row commodities, the approved yield is 

the converted approved yield from the P15 

record with skip row (yield conversion factor) 

applied.

Adjusted Yield P15 44 99999999.99 None

For skip row commodities, the adjusted yield is 

the converted adjusted yield from the P15 

record with skip row (yield conversion factor) 

applied.

When Trend Adjustment Option (TA) was 

chosen and yield reflects a trend or when Yield 

Exclusion Option "YE" was chosen.

Rate Differential Factor Internal 9.999999999 Round to 9 decimal 

places

Base Rate Differential Factor ADM 9.999999999 None

Base Rate Differential Factor is equal to Rate 

Differential for Minimum of 1) Maximum 

available Coverage Level or; 2) available 

Coverage Level less than or equal to Effective 

Coverage Level. Edit with ADM Coverage Level 

Differential, "A01040".

Upper Bound Rate Differential 

Factor ADM 9.999999999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the higher ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the highest ADM Coverage 

Level.

Lower Bound Rate Differential 

Factor ADM 9.999999999 None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level Percent equals 

an existing ADM Coverage Level then this will 

be based on the Effective Coverage Level 

Percent.

If the Effective Coverage Level Percent falls 

between existing ADM Coverage Levels then 

this will be based on the lower ADM Coverage 

Level.

Effective Coverage Level 

Percent Internal 9.99 None

Section 17: Rate Differential Factor 

APH Yield Trend (Trend Adjustment Option 'TA') and Yield Exclusion (Option 'YE')

Effective Coverage Level 

Percent = Coverage Level Percent * Approved Yield/Adjusted Yield

Section 16: Effective Coverage Level Calculation 

Rate Differential Factor =

Round(Base Rate Differential Factor + (Upper Bound Rate 

Differential Factor - Lower Bound Rate Differential Factor) * 

(Effective Coverage Level Percent - Floored Effective 

Coverage Level Percent) * 20, 9)
2/4/2015 Page 32 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level Percent equals 

an existing ADM Coverage Level then this will 

be the Effective Coverage Level Percent.

If the Effective Coverage Level Percent falls 

between existing ADM Coverage Levels then 

this will be the lower ADM Coverage Level.

If the Effective Coverage Level Percent is greater 

than the maximum ADM Coverage Level then 

this will be the highest ADM Coverage Level.

 

 

 

 

 
2/4/2015 Page 33 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Prior Year Rate Differential 

Factor Internal 9.999999999 Round to 9 decimal places.

Base Prior Year Rate 

Differential Factor ADM 9.999999999 None

Base Prior Year Rate Differential Factor is equal 

to Prior Year Rate Differential for Minimum of 

1) Maximum available Coverage Level or; 2) 

available Coverage Level less than or equal to 

Effective Coverage Level. Edit with ADM 

Coverage Level Differential, "A01040".

Upper Bound Prior Year Rate 

Differential Factor ADM 9.999999999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the higher ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the highest ADM Coverage 

Level.

 

 

 

 

 
2/4/2015 Page 34 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Lower Bound Prior Year Rate 

Differential Factor ADM 9.999999999 None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Effective Coverage Level 

Percent Internal 9.99 None

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level Percent equals 

an existing ADM Coverage Level then this will 

be the Effective Coverage Level Percent.

If the Effective Coverage Level Percent falls 

between existing ADM Coverage Levels then 

this will be the lower ADM Coverage Level.

If the Effective Coverage Level Percent is greater 

than the maximum ADM Coverage Level then 

this will be the highest ADM Coverage Level.

Prior Year Rate 

Differential Factor =

Round(Base Prior Year Rate Differential Factor + (Upper 

Bound Prior Year Rate Differential Factor - Lower Bound 

Prior Year Rate Differential Factor) * (Effective Coverage 

Level Percent - Floored Effective Coverage Level Percent) * 

20, 9)
2/4/2015 Page 35 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

The lookup/interpolation/extrapolation 

procedure for 'Unit Residual Factor and Prior 

Unit Residual Factor' when Trend Adjustment 

Option (TA) was chosen and yield reflects a 

trend or when Yield Exclusion Option "YE" was 

chosen.

Unit Residual Factor Internal 999.999 Round to 3 decimal 

places.

The cap value for the Residual Factors is the 

MAX(Residual Factor) from all coverage levels 

within the chosen unit structure

Base Unit Residual Factor ADM 999.999 None

Base Unit Residual Factor is equal to Unit 

Residual for Minimum of 1) Maximum available 

Coverage Level or; 2) available Coverage Level 

less than or equal to Effective Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040".

Upper Bound Unit Residual 

Factor ADM 999.999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level Percent equals 

an existing ADM Coverage Level then this will 

be based on the Effective Coverage Level 

Percent.

If the Effective Coverage Level Percent falls 

between existing ADM Coverage Levels then 

this will be based on the higher ADM Coverage 

Level.

If the Effective Coverage Level Percent is greater 

than the maximum ADM Coverage Level then 

this will be based on the highest ADM Coverage 

Level.

Lower Bound Unit Residual 

Factor ADM 999.999 None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Effective Coverage Level 

Percent Internal 9.99 None

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level Percent equals 

an existing ADM Coverage Level then this will 

be the Effective Coverage Level Percent.

If the Effective Coverage Level Percent falls 

between existing ADM Coverage Levels then 

this will be the lower ADM Coverage Level.

If the Effective Coverage Level Percent is greater 

than the maximum ADM Coverage Level then 

this will be the highest ADM Coverage Level.

When Unit Structure Code is equal to Optional Unit, "OU", "UA", "UD", or Basic Unit, "BU", use the following calculations for Unit Residual Factor and Prior Year Unit Residual Factor:

=

Round(Base Unit Residual Factor + (Upper Bound Unit 

Residual Factor - Lower Bound Unit Residual Factor) * 

(Effective Coverage Level Percent - Floored Effective 

Coverage Level Percent) * 20, 3)

Unit Residual Factor

Section 18: Unit Residual Factor 
2/4/2015 Page 36 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Prior Year Unit Residual Factor Internal 999.999 Round to 3 decimal 

places.

The cap value for the Residual Factors is the 

MAX(Residual Factor) from all coverage levels 

within the chosen unit structure

Base Prior Year Unit Residual 

Factor ADM 999.999 None

Base Prior Year Unit Residual Factor is equal to 

Prior Year Unit Residual for Minimum of 1) 

Maximum available Coverage Level or; 2) 

available Coverage Level less than or equal to 

Effective Coverage Level. Edit with ADM 

Coverage Level Differential, "A01040".

Upper Bound Prior Year Unit 

Residual Factor ADM 999.999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the higher ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the highest ADM Coverage 

Level.

Lower Bound Prior Year Unit 

Residual Factor ADM 999.999 None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Effective Coverage Level 

Percent Internal 9.99 None

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be the highest ADM Coverage Level.

=

Round(Base Prior Year Unit Residual Factor + (Upper Bound 

Prior Year Unit Residual Factor - Lower Bound Prior Year 

Unit Residual Factor) * (Effective Coverage Level Percent - 

Floored Effective Coverage Level Percent) * 20, 3)

Prior Year Unit Residual 

Factor
2/4/2015 Page 37 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Enterprise Unit Residual Factor Internal 999.999 Round to 3 decimal 

places.

The cap value for the Residual Factors is the 

MAX(Residual Factor) from all coverage levels 

within the chosen unit structure

Base Enterprise Unit Residual 

Factor ADM 999.999 None

Base Enterprise Unit Residual Factor is equal to 

Enterprise Unit Residual for Minimum of 1) 

Maximum available Coverage Level or; 2) 

available Coverage Level less than or equal to 

Effective Coverage Level. Edit with ADM 

Coverage Level Differential, "A01040".

Upper Bound Enterprise Unit 

Residual Factor ADM 999.999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level Percent equals 

an existing ADM Coverage Level then this will 

be based on the Effective Coverage Level 

Percent.

If the Effective Coverage Level Percent falls 

between existing ADM Coverage Levels then 

this will be based on the higher ADM Coverage 

Level.

If the Effective Coverage Level Percent is greater 

than the maximum ADM Coverage Level then 

this will be based on the highest ADM Coverage 

Level.

Lower Bound Enterprise Unit 

Residual Factor ADM 999.999 None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Effective Coverage Level 

Percent Internal 9.99 None

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level Percent equals 

an existing ADM Coverage Level then this will 

be the Effective Coverage Level Percent.

If the Effective Coverage Level Percent falls 

between existing ADM Coverage Levels then 

this will be the lower ADM Coverage Level.

If the Effective Coverage Level Percent is greater 

than the maximum ADM Coverage Level then 

this will be the highest ADM Coverage Level.

When Unit Structure Code is equal to Enterprise Unit, 'EU' or 'EP', use the following calculations for Enterprise Unit Residual Factor and Prior Year Enterprise Unit Residual Factor:

Enterprise Unit Residual 

Factor =

Round(Base Enterprise Unit Residual Factor + (Upper 

Bound Enterprise Unit Residual Factor - Lower Bound 

Enterprise Unit Residual Factor) * (Effective Coverage Level 

Percent - Floored Effective Coverage Level Percent) * 20, 3)
2/4/2015 Page 38 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Prior Year Enterprise Unit 

Residual Factor Internal 999.999 Round to 3 decimal 

places.

The cap value for the Residual Factors is the 

MAX(Residual Factor) from all coverage levels 

within the chosen unit structure

Base Enterprise Prior Year Unit 

Residual Factor ADM 999.999 None

Base Enterprise Prior Year Unit Residual Factor 

is equal to Enterprise Prior Year Unit Residual 

for Minimum of 1) Maximum available 

Coverage Level or; 2) available Coverage Level 

less than or equal to Effective Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040".

Upper Bound Prior Year 

Enterprise Unit Residual Factor ADM 999.999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the higher ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the highest ADM Coverage 

Level.

Lower Bound Prior Year 

Enterprise Unit Residual Factor ADM 999.999 None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Effective Coverage Level 

Percent Internal 9.99 None

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be the highest ADM Coverage Level.

Prior Year Enterprise Unit 

Residual Factor =

Round(Base Enterprise Prior Year Unit Residual Factor + 

(Upper Bound Prior Year Enterprise Unit Residual Factor - 

Lower Bound Prior Year Enterprise Unit Residual Factor) * 

(Effective Coverage Level Percent - Floored Effective 

Coverage Level Percent) * 20, 3)
2/4/2015 Page 39 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Whole Farm Unit Residual 

Factor Internal 999.999 Round to 3 decimal 

places.

The cap value for the Residual Factors is the 

MAX(Residual Factor) from all coverage levels 

within the chosen unit structure

Base Whole Farm Unit Residual 

Factor ADM 999.999 None

Base Whole Farm Unit Residual Factor is equal 

to Whole Farm Unit Residual for Minimum of 1) 

Maximum available Coverage Level or; 2) 

available Coverage Level less than or equal to 

Effective Coverage Level. Edit with ADM 

Coverage Level Differential, "A01040".

Upper Bound Whole Farm Unit 

Residual Factor ADM 999.999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level Percent equals 

an existing ADM Coverage Level then this will 

be based on the Effective Coverage Level 

Percent.

If the Effective Coverage Level Percent falls 

between existing ADM Coverage Levels then 

this will be based on the higher ADM Coverage 

Level.

If the Effective Coverage Level Percent is greater 

than the maximum ADM Coverage Level then 

this will be based on the highest ADM Coverage 

Level.

Lower Bound Whole Farm Unit 

Residual Factor ADM 999.999 None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Effective Coverage Level 

Percent Internal 9.99 None

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level Percent equals 

an existing ADM Coverage Level then this will 

be the Effective Coverage Level Percent.

If the Effective Coverage Level Percent falls 

between existing ADM Coverage Levels then 

this will be the lower ADM Coverage Level.

If the Effective Coverage Level Percent is greater 

than the maximum ADM Coverage Level then 

this will be the highest ADM Coverage Level.

Prior Year Whole Farm Unit 

Residual Factor Internal 999.999 Round to 3 decimal 

places.

The cap value for the Residual Factors is the 

MAX(Residual Factor) from all coverage levels 

within the chosen unit structure

When Unit Structure Code is equal to Whole Farm Unit, 'WU', use the following calculations for Whole Farm Unit Residual Factor and Prior Year Whole Farm Unit Residual Factor:

Whole Farm Unit Residual 

Factor =

Round(Base Whole Farm Unit Residual Factor + (Upper 

Bound Whole Farm Unit Residual Factor - Lower Bound 

Whole Farm Unit Residual Factor) * (Effective Coverage 

Level Percent - Floored Effective Coverage Level Percent) * 

20, 3)
2/4/2015 Page 40 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Base Whole Farm Base Prior 

Year Unit Residual Factor ADM 999.999 None

Base Whole Farm Base Prior Year Unit Residual 

Factor is equal to Whole Farm Base Prior Year 

Unit Residual for Minimum of 1) Maximum 

available Coverage Level or; 2) available 

Coverage Level less than or equal to Effective 

Coverage Level. Edit with ADM Coverage Level 

Differential, "A01040".

Upper Bound Prior Year Whole 

Farm Unit Residual Factor ADM 999.999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the higher ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the highest ADM Coverage 

Level.

Lower Bound Prior Year Whole 

Farm Unit Residual Factor ADM 999.999 None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Effective Coverage Level 

Percent Internal 9.99 None

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be the highest ADM Coverage Level.

Prior Year Whole Farm 

Unit Residual Factor =

Round(Base Whole Farm Prior Year Unit Residual Factor + 

(Upper Bound Prior Year Whole Farm Unit Residual Factor - 

Lower Bound Prior Year Whole Farm Unit Residual Factor) 

* (Effective Coverage Level Percent - Floored Effective 

Coverage Level Percent) * 20, 3)
2/4/2015 Page 41 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

The lookup/interpoloation/extrapolation 

procedure for 'Optional Unit Discount Factor, 

Basic Unit Discount Factor, and Enterprise Unit 

Discount Factor' when Trend Adjustment 

Option (TA) or Yield Exclusion Option (YE) was 

chosen and yield reflects a trend.

Unit Structure Discount Factor Internal 9.999999999 Round to 4 8 decimal 

places. Capped at 1.0

Base Coverage Level Percent 

Optional Unit Discount Factor ADM 9.999999999 None

Base Coverage Level Percent Optional Unit 

Discount Factor is equal to Percent Optional 

Discount for Minimum of 1) Maximum available 

Coverage Level or; 2) available Coverage Level 

less than or equal to Effective Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040".

Upper Bound Coverage Level 

Percent Optional Unit Discount 

Factor

ADM 9.999999999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the higher ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the highest ADM Coverage 

Level.

Lower Bound Coverage Level 

Percent Optional Unit Discount 

Factor

ADM None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Effective Coverage Level 

Percent Internal 9.99 None

=

Round(Base Coverage Level Percent Optional Unit Discount 

Factor + (Upper Bound Coverage Level Percent Optional 

Unit Discount Factor - Lower Bound Coverage Level Percent 

Optional Unit Discount Factor) * (Effective Coverage Level 

Percent - Floored Effective Coverage Level Percent) * 20, 4)

Section 19: Unit Discount Calculation 

When Unit Structure Code is equal to Optional Unit, "OU", "UA", or "UD", use the following calculation for Unit Structure Discount Factor:

Unit Structure Discount 

Factor
2/4/2015 Page 42 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be the highest ADM Coverage Level.

 

 
2/4/2015 Page 43 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Unit Structure Discount Factor Internal 9.999999999 Round to 4 decimal 

places. Capped at 1.0

Base Coverage Level Percent 

Basic Unit Discount Factor ADM 9.999999999 None

Base Coverage Level Percent Basic Unit 

Discount Factor is equal to Basic Unit Discount 

Factor for Minimum of 1) Maximum available 

Coverage Level or; 2) available Coverage Level 

less than or equal to Effective Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040".

Upper Bound Coverage Level 

Percent Basic Unit Discount 

Factor

ADM 9.999999999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the higher ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the highest ADM Coverage 

Level.

Lower Bound Coverage Level 

Percent Basic Unit Discount 

Factor

ADM None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Effective Coverage Level 

Percent Internal 9.99 None

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be the highest ADM Coverage Level.

When Unit Structure Code is equal to Basic Unit, 'BU', use the following calculation for Unit Structure Discount Factor:

Unit Structure Discount 

Factor =

Round(Base Coverage Level Percent Basic Unit Discount 

Factor + (Upper Bound Coverage Level Percent Basic Unit 

Discount Factor - Lower Bound Coverage Level Percent 

Basic Unit Discount Factor) * (Effective Coverage Level 

Percent - Floored Effective Coverage Level Percent) * 20, 4)
2/4/2015 Page 44 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Unit Structure Discount Factor Internal 9.999999999 Round to 4 decimal 

places. Capped at 1.0

Base Coverage Level Percent 

Enterprise Unit Discount Factor ADM 9.999999999 None

Base Coverage Level Percent Enterprise Unit 

Discount Factor is equal to Enterprise Unit 

Discount Factor for Minimum of 1) Maximum 

available Coverage Level or; 2) available 

Coverage Level less than or equal to Effective 

Coverage Level. Edit with ADM Coverage Level 

Differential, "A01040".

Upper Bound Coverage Level 

Percent Enterprise Unit 

Discount Factor

ADM 9.999999999 None

Based on the 'upper bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the higher ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the highest ADM Coverage 

Level.

Lower Bound Coverage Level 

Percent Enterprise Unit 

Discount Factor

ADM None

Based on the 'lower bound' Coverage Level. 

Edit with ADM Coverage Level Differential, 

"A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

based on the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

based on the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be based on the second highest ADM 

Coverage Level.

Unit Structure Discount 

Factor =

Round(Base Coverage Level Percent Enterprise Unit 

Discount Factor + (Upper Bound Coverage Level Percent 

Enterprise Unit Discount Factor - Lower Bound Coverage 

Level Percent Enterprise Unit Discount Factor) * (Effective 

Coverage Level Percent - Floored Effective Coverage Level 

Percent) * 20, 4)

When Unit Structure Code is equal to Enterprise Unit, 'EU' or 'EP', use the following calculation for Unit Structure Discount Factor:
2/4/2015 Page 45 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Effective Coverage Level 

Percent Internal 9.99 None

Floored Effective Coverage 

Level Percent Internal 9.99 None

Based on the 'floored' Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040". 

If the Effective Coverage Level equals an 

existing ADM Coverage Level then this will be 

the Effective Coverage Level.

If the Effective Coverage Level falls between 

existing ADM Coverage Levels then this will be 

the lower ADM Coverage Level.

If the Effective Coverage Level is greater than 

the maximum ADM Coverage Level then this 

will be the highest ADM Coverage Level.

 

 

 

 

 

 

 
2/4/2015 Page 46 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

The following information will be used only 

when an applicable county program does not 

exist in the county and written agreement (WA) 

specifies a Multiplicative Rate, Add-on Rate, or 

Designated Rate. This would include situations 

where a written agreement (WA) for a type or 

practice not contained in the Actuarial 

materials.

Reference Rate Internal 9.9999 None

Reference Rate ADM 9.9999 None Edit with ADM Base Rate, "A01010". 

Fixed Rate ADM 9.9999 None Edit with ADM Base Rate, "A01010". 

Written Agreement 

Multiplicative Rate Adjustment WA 9.9999 None

Prior Year Reference Rate Internal 9.9999 None

Reference Rate ADM 9.9999 None Edit with ADM Base Rate, "A01010". 

Fixed Rate ADM 9.9999 None Edit with ADM Base Rate, "A01010". 

Written Agreement 

Multiplicative Rate Adjustment WA 9.9999 None

Fixed Rate Internal 9.9999 None

Fixed Rate ADM 9.9999 None Edit with ADM Base Rate, "A01010". 

Written Agreement Add-on 

Rate WA 9.9999 None

Prior Year Fixed Rate Internal 9.9999 None

Fixed Rate ADM 9.9999 None Edit with ADM Base Rate, "A01010". 

Written Agreement Add-on 

Rate WA 9.9999 None

Prior Year Reference Rate =

(Round(Reference Rate + Fixed Rate) * Written Agreement 

Multiplicative Rate Adjustment,3) - Fixed Rate

When WA specifies a Add-on Rate:

Fixed Rate = Fixed Rate + Written Agreement Add-on Rate

Prior Year Fixed Rate = Fixed Rate + Written Agreement Add-on Rate

Written Agreement Rate Information 

Section 20: Written Agreement Rate Calculation 

When WA specifies a Multiplicative Rate:

Reference Rate = (Round(Reference Rate + Fixed Rate) * Written Agreement 

Multiplicative Rate Adjustment,3) - Fixed Rate
2/4/2015 Page 47 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Reference Rate = zero (0) Reference Rate Internal 9.9999 None

Fixed Rate Internal 9.9999 None

Designated Rate WA 9.9999 None

Prior Year Reference Rate = zero (0) Prior Year Reference Rate Internal 9.9999 None

Prior Year Fixed Rate Internal 9.9999 None

Written Agreement Designated 

Rate WA 9.9999 None

The following information will be used when 

written agreement (WA) modifies a Sub County 

Rate (High Risk or Map Rate).

Sub County Rate = Written Agreement Sub County Rate Written Agreement Sub County 

Rate WA 9.9999 None

Replace Sub County Rate if Written Agreement 

Sub County Rate is lower. Set Sub County Rate 

to zero if Written Agreement removes Sub 

County Rate.

Prior Year Fixed Rate = Designated Rate 

Section 21: Written Agreement Sub County Rate Calculation 

When WA specifies a Designated Rate:

Fixed Rate = Designated Rate 
2/4/2015 Page 48 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

CAT does not apply to Downed Rice (DRE). Only 

Unit Structure Codes 'BU and OU' apply 

regardless of the base Rice selection. Price 

Election Percent for base Rice will apply to DRE. 

Subsidy Level will be 38% for DRE regardless of 

the base Rice Unit Structure or Coverage Level. 

Insured Share can be different for DRE than 

base Rice. Insured Share will be 100%. DRE 

coverage is not available for high-risk CAT 

acreage if excluded from additional coverage 

for Base Rice. 

Premium Liability Amount Internal 9999999999 Round to whole 

number.

Dollar Amount of Insurance ADM 99999 None Edit with ADM Price, "A00810", Fixed Coverage 

Amount with insurance option = 'DC'.

Reported Acreage P11 49 99999999.99 None

Insured Share Percent P11 44 9.9999 None DRE insured share will always be 100% without 

regards to base Rice.

Price Election Percent ICE 9.9999 None From base Rice P14 record.

Liability Amount P11 91 9999999999 Round to whole 

number.

Dollar Amount of Insurance ADM 99999 None Edit with ADM Price, "A00810", Fixed Coverage 

Amount with insurance option = 'DC'.

Reported Acreage P11 49 999999.99 None

Insured Share Percent P11 44 9.9999 None DRE insured share will always be 100% without 

regards to base Rice.

Price Election Percent ICE 9.9999 None From base Rice P14 record.

Premium Liability Amount = Dollar Amount of Insurance * Reported Acreage * Insured 

Share Percent * Price Election Percent

Liability Amount = Dollar Amount of Insurance * Reported Acreage * Insured 

Share Percent * Price Election Percent

Downed Rice Endorsement (DRE) Option 'DC' 

Section 22: Liability Calculation 
2/4/2015 Page 49 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Preliminary Total Premium Internal 9999999999 Round to whole 

number.

Premium Rate ADM None Edit with ADM Option Rate, "A01060", rate with 

insurance option = 'DC'.

Total Premium Amount = Preliminary Total Premium Total Premium Amount P11 92 9999999999 Round to whole 

number.

Subsidy Amount P11 90 9999999999 Round to whole 

number.

If this record qualifies for Beginning Farmer and 

Rancher or Native Sod, see Section 24 for 

subsidy calculations.

Subsidy Percent ADM 9.999 None Edit with ADM Subsidy Percent, "A00070". Will 

always be 38% for DRE.

Producer Premium 

Amount = Total Premium Amount - Subsidy Amount Producer Premium Amount P11 93 9999999999 Round to whole number.

Base Subsidy Amount Internal 9999999999 Round to whole 

number Cupped by the standard rule of $1 if applicable.

Subsidy Percent ADM 9.999 None Edit with ADM Subsidy Percent, "A00070".

Native Sod Subsidy 

Amount = Total Premium Amount * 0.50 Native Sod Subsidy Amount Internal 9999999999 Round to whole 

number

If Applicable; else 0.

0.50 (50%).

For CAT coverage, Native Sod Subsidy Amount 

is always 0.

Producer Premium 

Amount = Total Premium Amount - Subsidy Amount Producer Premium Amount P11 93 9999999999 Round to whole number

9999999999 Round to whole 

number

Beginning Farmer Rancher Subsidy Amount.

If Applicable; else 0.

0.10 (10%).

Subsidy Amount = Base Subsidy Amount + BFR Subsidy Amount - Native Sod 

Subsidy Amount Subsidy Amount P11 90 9999999999 Round to whole 

number

Subsidy Amount cannot exceed Total Premium 

Amount. Subsidy Amount will be cupped at $0.

Section 24: Beginning Farmer and Rancher (BFR) and Native Sod (NS) Subsidy Calculations

Base Subsidy Amount = Total Premium Amount * Subsidy Percent

BFR Subsidy Amount = Total Premium Amount * 0.10 BFR Subsidy Amount Internal

Subsidy Amount = Total Premium Amount * Subsidy Percent

Section 23: Total Premium Amount, Subsidy Amount, and Producer Premium Amount

Preliminary Total 

Premium = Premium Liability Amount * Premium Rate 
2/4/2015 Page 50 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Unadjusted Liability Amount Internal 9999999999 Round to whole 

number

Coverage Level Percent P14 34 9.9999 None

Effective Coverage Level 

Percent Internal 9.9999

Premium Liability Amount Internal 9999999999 Round to whole 

number

Max Coverage Level 

Adjustment Factor Internal 999999999.99999999 Round to 8 decimals.

Unadjusted Liability Amount Internal 9999999999 Round to whole 

number

Current Year Base Rate Internal 10000000000 Round to 8 decimals.

Premium Liability Amount Internal 9999999999 Round to whole 

number

Base Rate Differential Factor ADM 9.999999999 None

Base Unit Residual Factor ADM 999.999 None

Base Optional Unit Structure 

Discount Factor ADM 9.999999999 None

Base Optional Unit Structure Discount Factor is 

equal to Optional Unit Discount Factor for 

Minimum of 1) Maximum available Coverage 

Level or; 2) available Coverage Level less than 

or equal to Effective Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040".

See Section 19 for more info.

When Unit Structure code is Basic Unit, "BU":

ROUND(1.00/ Current Year Base Rate,8) – 

ROUND(Unadjusted Liability Amount/(Current Year Base 

Rate * Premium Liability Amount),8) + 

ROUND(ROUND(Base Rate Differential Factor * Base Unit 

Residual Factor * Base Basic Unit Structure Discount Factor 

* Unadjusted Liability Amount,8)/Premium Liability 

Amount,8)

Base Basic Unit Structure 

Discount Factor ADM 9.999999999 None

Base Basic Unit Structure Discount Factor is 

equal to Basic Unit Discount Factor for 

Minimum of 1) Maximum available Coverage 

Level or; 2) available Coverage Level less than 

or equal to Effective Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040".

See Section 19 for more info.

When the total planted acres for the unit is 0 

(all acres are prevented planted) set to 1.00.

Base Enterprise Unit Structure 

Discount Factor ADM 9.999999999 None

Base Enterprise Unit Structure Discount Factor 

is equal to Enterprise Unit Discount Factor for 

Minimum of 1) Maximum available Coverage 

Level or; 2) available Coverage Level less than 

or equal to Effective Coverage Level. Edit with 

ADM Coverage Level Differential, "A01040".

See Section 19 for more info.

When the total planted acres for the unit is 0 

(all acres are prevented planted) set to 1.00.

Base Enterprise Unit Residual 

Factor ADM 999.999 None

Base Enterprise Unit Residual Factor is equal to 

Enterprise Unit Residual for Minimum of 1) 

Maximum available Coverage Level or; 2) 

available Coverage Level less than or equal to 

Effective Coverage Level. Edit with ADM 

Coverage Level Differential, "A01040".

Unit Structure Discount Factor Internal 9.99999999 None

Capped at 1.0

See Section 19 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Base Whole Farm Unit Residual 

Factor ADM 999.999 None

Base Whole Farm Unit Residual Factor is equal 

to Whole Farm Unit Residual for Minimum of 1) 

Maximum available Coverage Level or; 2) 

available Coverage Level less than or equal to 

Effective Coverage Level. Edit with ADM 

Coverage Level Differential, "A01040".

Section 25: Yield Exclusion Current Year Base Premium Rate Calculations (only use when the Effective Coverage Level for the record exceeds the highest coverage level for the offer in the ADM)

Unadjusted Liability 

Amount =

(Coverage Level Percent/Effective Coverage Level Percent) * 

Premium Liability Amount

Max Coverage Level 

Adjustment Factor =

 When Unit Structure Code is equal to Optional Unit, 

"OU", "UA" &"UD::

ROUND(1.00/ Current Year Base Rate,8) – 

ROUND(Unadjusted Liability Amount/(Current Year Base 

Rate * Premium Liability Amount),8) + 

ROUND(ROUND(Base Rate Differential Factor * Base Unit 

Residual Factor * Base Optional Unit Structure Discount 

Factor * Unadjusted Liability Amount,8)/Premium Liability 

Amount,8)

When Unit Structure code is Enterprise Unit, "EU" & "EP":

ROUND(1.00/ Current Year Base Rate,8) – 

ROUND(Unadjusted Liability Amount/( Current Year Base 

Rate * Premium Liability Amount),8) + 

ROUND(ROUND(Base Rate Differential Factor * Base 

Enterprise Unit Residual Factor * Base Enterprise Unit 

Structure Discount Factor * Unadjusted Liability 

Amount,8)/Premium Liability Amount,8)

When Unit Structure code is Whole Farm Unit "WU":

ROUND(1.00/ Current Year Base Rate,8) – 

ROUND(Unadjusted Liability Amount/( Current Year Base 

Rate * Premium Liability Amount),8) + 

ROUND(ROUND(Base Rate Differential Factor * Base Whole 

Farm Unit Residual Factor * Unit Structure Discount Factor 

* Unadjusted Liability Amount,8)/Premium Liability 

Amount,8)
2/4/2015 Page 51 of 51

Exhibit Name: Premium Calculation

Exhibit Number: P11-1, Plan 01, 02, 03 Reinsurance Year: 2015

Record Name: Acreage Version: Comment

Record Code: P11 Release Date: 2/5/2015

Insurance Plan Code 01 Yield Protection 02 Revenue Protection

0011 Wheat 0021 Cotton 0075 Peanuts

Commodity Code 0015 Canola 0041 Corn 0078 Sunflowers

0018 Rice 0043 Popcorn 0067 Dry Peas 0081 Soybeans

0091 Barley

Calculations

Field 

Name

Record 

Number

Field 

Number

Field

 Format

Field 

Rounding Rules

0051 Grain Sorghum

 

03 Revenue Protection with Harvest Price Exclusion 

0047 Dry Beans

Marginal rate Adjustment Yield 

Exclusion Proration Marginal 

Adjustment Rate Factor

Internal 9.99999999 Round to 8 decimals.

Max Coverage Level 

Adjustment Factor Internal 999999999.99999999 Round to 8 decimals.

Rate Differential Factor ADM 9.999999999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 17 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Unit Residual Factor ADM 999.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Unit Structure Discount Factor Internal 9.99999999 None

Capped at 1.0

See Section 19 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

When Unit Structure code is Enterprise Unit, "EU" & "EP":

Max Coverage Level Adjustment Factor /(Rate Differential 

Factor * Enterprise Unit Residual Factor * Unit Structure 

Discount Factor)

Enterprise Unit Residual Factor ADM 9.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Enterprise Unit, 

'EU'.

When Unit Structure code is Whole Farm Unit, "WU":

Max Coverage Level Adjustment Factor /(Rate Differential 

Factor * Whole Farm Unit Residual Factor * Unit Structure 

Discount Factor)

Whole Farm Unit Residual 

Factor ADM 9.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Whole Farm Unit, 

'WU'.

Current Year Base Premium 

Rate Internal 9999999999.99999999 Round to 8 decimals.

Rate Differential Factor ADM 9.999999999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 17 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion).

Unit Residual Factor ADM 999.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Optional Unit, 

"OU", "UA", "UD", or Basic Unit, 'BU'.

Yield Exclusion Proration 

Marginal Rate Adjustment 

Factor

Internal 9999999999.99999999 Round to 8 decimals.

=

When Unit Structure code is Enterprise Unit, "EU" & "EP":

Round(Current Year Base Rate * Rate Differential Factor * 

Enterprise Unit Residual Factor, 8) * MIN(Yield Exclusion 

Proration Marginal Rate Adjustment Factor, 1.00 0.99)

Enterprise Unit Residual Factor ADM 9.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Enterprise Unit, 

'EU'.

=

When Unit Structure code is Whole Farm Unit, "WU":

Round(Current Year Base Rate * Rate Differential Factor * 

Whole Farm Unit Residual Factor, 8) * MIN(Yield Exclusion 

Proration Marginal Rate Adjustment Factor, 1.00 0.99)

Whole Farm Unit Residual 

Factor ADM 9.999 None

Edit with ADM Coverage Level Differential, 

"A01040".

See Section 18 for Option Code "TA" (Trend 

Adjustment) and "YE" (Yield Exclusion) where 

Unit Structure Code equal to Whole Farm Unit, 

'WU'.

Max Coverage Level Adjustment Factor /(Rate Differential 

Factor * Unit Residual Factor * Unit Structure Discount 

Factor)

Current Year Base 

Premium Rate 

=

 When Unit Structure Code is equal to Optional Unit, 

"OU", "UA", "UD", or Basic Unit, "BU":

Round(Current Year Base Rate * Rate Differential Factor * 

Unit Residual Factor, 8) * MIN(Yield Exclusion Proration 

Marginal Rate Adjustment Factor, 1.00 0.99)

Yield Exclusion Proration 

Marginal Rate Adjustment 

Factor

=
2/4/2015 AIP Test Deployment Release Notes

Yield Exclusion – Update:

 This release patches the known issue in the rollout of the 

Yield Exclusion calculation/validation on the P15. 

Following the release, AIP‟s should correctly calculate 

Approved Yields based on CIH instructions when the number 

of excluded yields brings the APH database below the 

required 4 years of history. Additionally, the same 

protections afforded Yield Trend are also in affect for 

Yield Exclusion as it relates to the Adjusted Yield. If 

Yield Exclusion results in an Approved Yield that is LESS 

THAN the Adjusted Yield, the AIP‟s should set the Approved 

Yield EQUAL to the Adjusted Yield on their submission. This 

implementation completes all known issues concerning Yield 

Exclusion in PASS. 

D00054: 

 CR 36379 - Modified 2015 Commodity Code 0075 rows from 

Insurance Plan Code 90 to Insurance Plan Code 01, 02, 03.

D00066: 

 CR 36379 - Modified 2015 Commodity Code 0075 rows from 

Insurance Plan Code 90 to Insurance Plan Code 01, 02, 03.

D00068: 

 CR 36379 - Modified 2015 Commodity Code 0075 rows from 

Insurance Plan Code 90 to Insurance Plan Code 01, 02, 03.

D00077: 

 CR 36379 - Modified 2015 Commodity Code 0075 rows from 

Insurance Plan Code 90 to null.

D00080: 

 CR 36379 - Modified 2015 Commodity Code 0075 rows from 

Insurance Plan Code 90 to Insurance Plan Code 01, 02, 03.

D00101:

 CR 40345 - Added PIC 415 for PL for 2015.

D00129: 

 CR 36379 - Modified 2015 Commodity Code 0075 Maximum 

Replant Guarantee Per Acre Amount to 95.

P11: 
 CR 36379 - Implemented Peanut Revenue program on the 2015 

P11 record type. The following P11 rules were modified as 

part of this CR: 5244, 5276, 5278, 5283, 5284, 5289, 5396, 

5691, 6623, 6911, 7011, 7026, 7267, 7269, 8137, 8485, 8489, 

8491, 8492, 8493, 8498, 8499, 8500, 8517, 8518, 8519, 8520, 

8521, 8522, 8523, 8540, 8541, 9092, 9093, 9094, 9098, 9099, 

9100, 9918, 9919, 10771, 10772, 10773, 10810, 10811, 10836, 

10860, 12057, 12064, 12129, 12130, 12132, 12133, 16270, 

16271, 16272, 16276, 16277, 16278, 16279, 19605, 26218, 

38714, 45444, 45445, 52110, 76726, 77772, 77773, 77777, 

77778, and 77781. Please refer to the Appendix III and 

Peanut Revenue White Paper for details of the Peanut 

Revenue program.

P11A: 

 CR 36379 - Implemented Peanut Revenue program on the 2015 

P11A record type. Four new fields were added to the P11A. 

Those fields are as follows: Contract Liability Record 

Flag, Reported Pounds, Contract Price, and Projected Price. 

The following P11A rules were modified as part of this CR: 

52448, 76711, 76712, 76713, 76714, 76715, 76716, 76717, 

76718, 76719, 76720, 76721, 76722, 76723, and 76724. 

Please refer to the Appendix III and Peanut Revenue White 

Paper for details of the Peanut Revenue program.

P21: 

 CR 36379 - Implemented Peanut Revenue program on the 2015 

P21 record type. The following P21 rules were modified as 

part of this CR: 7507, 7605, 7672, 7673, 7684, 7685, 7686, 

7736, 7740, 9577, 9654, 9911, 10137, 19288, 20950, 20951, 

27224, 27225, 45465, 45466, 52272, and 52275. Please refer 

to the Appendix III and Peanut Revenue White Paper for 

details of the Peanut Revenue program.

E11: 

 CR 40294 - This CR implements five new requirements for 

Yield Exclusion functionality in the Corporate Calculation

Web Service. First, the new Unadjusted Liability Amount, 

Maximum Coverage level Adjustment Factor, and Marginal Rate 

Adjustment Factor calculations will only apply when 

Effective Coverage Level Percent is greater than the 

Maximum Coverage Level Percent. Second, when Total Planted 

Acreage is zero (all acres are Prevented Planted) then use 

a value of 1.000 for Base Basic Unit Structure Discount 

Factor and Base Enterprise Unit Structure Discount Factor. 

Third, do not use Coverage Type Code to look up Maximum 

Coverage Level Percent. When looking up Base, Lower Bound, 
and Upper Bound Unit Structure Discount Factor and Unit 

Residual Factor, if a record doesn‟t exist for the given 

Coverage Type Code (i.e. C for CAT) then look for the A for 

Buy-Up record. Fourth, change all references from Yield 

Exclusion Proration Factor to Marginal Rate Adjustment 

Factor. Fifth, in the Current Year Base Premium Rate 

calculation, change the minimum of the Marginal Rate 

Adjustment Factor and 0.99 to 1.00.

P11: 

 CR 40294 - This CR implements five new requirements for 

Yield Exclusion functionality in PASS. First, the new 

Unadjusted Liability Amount, Maximum Coverage level 

Adjustment Factor, and Marginal Rate Adjustment Factor 

calculations will only apply when Effective Coverage Level 

Percent is greater than Maximum Coverage Level Percent. 

Second, when Total Planted Acreage is zero (all acres are 

Prevented Planted) then use a value of 1.000 for Base Basic 

Unit Structure Discount Factor and Base Enterprise Unit 

Structure Discount Factor. Third, do not use Coverage Type 

Code to look up Maximum Coverage Level Percent. When 

looking up Base, Lower Bound, and Upper Bound Unit 

Structure Discount Factor and Unit Residual Factor, if a 

record doesn‟t exist for the given Coverage Type Code (i.e. 

C for CAT) then look for the A for Buy-Up record. Fourth, 

change all references from Yield Exclusion Proration Factor 

to Marginal Rate Adjustment Factor. Fifth, in the Current 

Year Base Premium Rate calculation, change the minimum of 

the Marginal Rate Adjustment Factor and 0.99 to 1.00.

P10: 

 CR 40345 - Added PIC 415 for PL for 2015 to the IcePic 

D00101 and IceAipState D10001 tables.

P14: 

 CR 36474 – Modified an internal rule to set an internal 

flag to correct the 3586 error on P09 record where the WA 

Number is being added after the fund designation cutoff 

date. Changes will apply for all years 2011 forward to 

allow the WA Number to be added after the Fund Designation 

Cutoff date providing there is no change to the Fund 

Designation Flag.

P14: 

 CR 37395 - Added new rule 73458 for 2015 SCO and STAX 

plans. For SCO/STAX, the policy must be buy up coverage 

(Coverage Type Code = „A‟) even though the base policy is 
CAT coverage. For SCO plans 31, 32, 33 and STAX plans 35, 

36 rule 73458 will trip if the Coverage Type Code is not 

equal to „A‟.

P14: 

 CR 37395 - Updated rule 5706 to address an issue where the 

SCO or STAX policy is getting this error because the base 

policy has CAT coverage but the SCO or STAX policy must be 

buy up coverage.

P14: 

 CR 37395 - Modified rule 9892 for RY-2015 forward so that 

it is not running for multiple P14 records for Dry Bean 

(0047) and Dry Peas (0067) by types with the LP option by 

irrigation/non-irrigation practices. For multiple P14 

records for Dry Bean (0047) and Dry Peas (0067) by types 

with the LP option by irrigation/non-irrigation practices 

rule 72741 will apply instead. There must two P14 records 

by type for Irrigated/Non-Irrigated Practices sent by the 

Sales Closing Date and the coverage levels must be 

different by irrigation practice.

P14: 

 CR 37395 - Added new rule 74632 for 2015 SCO and STAX plans 

to reject the SCO/STAX policy if the associated base policy 

has been rejected. For SCO and/or STAX policy where the 

base policy existed, the base policy must be in „accepted‟ 

status; otherwise, reject the SCO/STAX.

P14: 

 CR 37395 – Rule 72734 was implemented RY-2015 forward for 

Commodity not by type or variety where the Commodity Code 

is not one of the following values: ('0052', '0053', 

'0034', '0054', '0047', '0067') and the Insurance Option 

Code List contains „LP‟, there must two P14 records for 

Irrigated/Non-Irrigated Practices sent by the Sales Closing 

Date and the coverage levels must be different by 

irrigation practice. This rule 72734 has been modified to 

exclude SCO or STAX policy and for the base policy where 

SCO and/or STAX policy exists. Rule 73328 will apply 

instead.

P14: 

 CR 37395 – Added new rule 73328 for SCO/STAX for RY-2015 

forward for Commodity not by type or variety where the 

Commodity Code is not one of the following values: ('0052', 
'0053', '0034', '0054', '0047', '0067') and the Insurance 

Option Code List contains „LP‟, there must two P14 records 

for Irrigated/Non-Irrigated Practices sent by the Sales 

Closing Date and the coverage levels must be different by 

irrigation practice. This rule will allow two P14 records 

by irrigated/non-irrigated practices per SCO, STAX, or base 

policy.

P14: 

 CR 37395 – Added new rule 76687 to ensure that the 

Associated Aip Insurance In Force Key must be unique within 

the same policy for SCO or STAX. There must be one and only 

one SCO or STAX P14 record pointing to a particular base 

P14 record. Multiple SCO or STAX P14 records for the same 

policy, same Associated Aip Policy Producer Key, and same 

Associated AIP Insurance In Force Key are not allowed.

P14: 

 CR 37395 – Added new rule 76688 to ensure that the 

Associated Aip Policy Producer Key and Associated Aip 

Insurance In Force Key on the P14 record must be populated 

for STAX if the STAX policy is found to have a 

base/companion policy. They can only be empty (NULL) if the 

STAX is a standalone policy.

P14: 

 CR 37395 – For ARPI plans 04, 05, 06 with multiple types 

and practices, there must be a one to one match of STAX 

P14's to ARPI base/companion P14. Added new rule 76689 to 

validate the base policy to the STAX policy. For base 

policy under ARPI plan 04, 05, or 06 with multiple types 

and practices, if the STAX policy (plan 35 or 36) exists, 

then there must be a one to one match by Type by Practice 

of STAX P14 record to APRI base/companion P14 record. Added 

new rule 76690 to validate the STAX policy to the base 

policy. For STAX policy (plan 35 or 36), if the base policy 

is ARPI plan 04, 05, or 06 with multiple types and 

practices, then there must be a one to one match by Type by 

Practice of STAX P14 record to APRI base/companion P14 

record.

P14: 

 CR 37395 – Added new rule 76710 to ensure that if the 

base/companion policy has the LP option, then the LP option 

must also be on the SCO policy.

P15A: 
 CR 38727 - This CR improves performance of the Skip Row 

Code and Skip Row Width validations against the Skip Row 

ICE “D00039” on the P15A and P11. The validation is now 

split into two rules, one for Cotton 0021 and 0022, and one 

for Corn 0041.

P11: 

 CR 38727 - This CR improves performance of the Skip Row 

Code and Skip Row Width validations against the Skip Row 

ICE “D00039” on the P15A and P11. The validation is now 

split into two rules, one for Cotton 0021 and 0022, and one 

for Corn 0041.