2025 LPRA Appendix II 07-01-24 

APPENDIX II 

PLAN OF OPERATIONS 

The Plan of Operations (Plan) filed by the Company must contain the information stated herein and 

the Company must certify the accuracy and completeness of the Plan. Information, documents, or 

forms, are to be identified in the Plan as Exhibits to correspond with each section and paragraph. The 

Company must file all Exhibits required herein annually, and, as necessary, file any addition or 

revision to specific Exhibits during the reinsurance year. Any Exhibit not filed when required may 

delay approval of the Plan. The Company may be required to provide additional information as may 

be necessary to clarify or provide further detail in support of the Company’s or MGA’s financial or 

operational capacity. 

SECTION I. INSURANCE COMPANY GENERAL 

(a) The name, address, phone number, web site address, and tax identification number of 

the Company. (Note: If the Company’s Plan is approved, information from this Exhibit 

other than tax identification number will be released on RMA’s public web site.) 

(b) The names, address, and tax identification numbers of all PICs and, upon request, a 

copy of agreements between the Company, or its MGA, and PICs. 

(c) If the Company elects to use an MGA: 

(1) The name, phone number, address, web site address, and tax identification 

number of the MGA; (Note: If the Company’s Plan is approved, information 

from this Exhibit other than tax identification number will be released on 

RMA’s public web site.) 

(2) A copy of all agreements between the MGA and the Company that relates to 

eligible livestock price insurance contracts reinsured under this Agreement; and 

(3) A letter from an officer of the Company that empowers the entity identified in 

subparagraph (c)(1) to act as the MGA for the Company for the reinsurance 

year. The officer must be listed in the Company’s Annual Statement filed with 

the State in which the Company is domiciled and have the authority to act on 

behalf of the Company. 

SECTION II. CERTIFICATIONS 

The Company shall provide a certification statement referencing each item in this section, signed by 

the person authorized to sign the Agreement on behalf of the Company, unless otherwise specified. 

(a) In accordance with section I of Appendix I, the Company shall submit its certification 

regarding procurement integrity. 

1 
2025 LPRA Appendix II 07-01-24 

(b) In accordance with section II of Appendix I, the Company shall submit its certification 

regarding a drug free workplace. 

(c) In accordance with section III of Appendix I, the Company shall complete and submit 

OMB Form LLL, Disclosure of Lobbying Activities, and specify the period of time to 

which such completed form applies. 

(d) In accordance with section IV(o). of the Agreement, the Company shall submit its 

certification regarding compliance with discrimination laws. 

(e) The Company shall submit its certification that the Company, its MGA as applicable, 

its affiliates, and its PICs are properly licensed under the insurance laws or regulations 

of all States in which the Company sells and services eligible livestock price 

insurance contracts reinsured under this Agreement. 

(f) The Company shall submit its certification regarding the Company’s ability to meet its 

obligations under the current and any prior Agreement, as applicable. 

(g) The Company shall submit its certification regarding non-disclosure, as specified in 

section XV(a)(9) of Appendix I. 

(h) The Company shall submit its certification that the information required by US Federal 

Contractor Registration (www.sam.gov) has been provided. This information will be 

used to process payments. 

(i) The Company shall submit its certification that any agent cancellation notifications 

will provide the affected agent/agency 60 days written notice, or the period of notice 

required by state law, whichever is greater, prior to the first sales closing date of the 

agent/agencies book of business. AIPs shall provide RMA written notice 30 days prior 

to sending the agent/agency written notice. 

SECTION III. FINANCIAL INFORMATION 

(a) Upon specific request by FCIC, the Company must provide the following: 

(1) The Statutory Annual Statement for the most recent reporting year. 

(2) The Statutory Quarterly Statements for the most recent quarter and throughout 

the reinsurance year, within 10 days after such statements are filed with the 

State. 

(3) The Statutory Management Discussion and Analysis, within 10 days of making 

the filings in subparagraph (c). 

(4) Actuarial Opinion of Reserves for the most recent reporting year, by June 1 

preceding the start of the reinsurance year. 

2 
 

 

2025 LPRA Appendix II 07-01-24 

(5) Insurance Regulatory Information System (IRIS) Ratios. 

(6) The Statutory Insurance Expense Exhibit. 

(b) The Company must provide the following: 

(1) If prepared in the normal course of business, annual audited GAAP financial 

statements for the previous reporting year, by June 1 preceding the start of the 

reinsurance year. 

(2) If prepared in the normal course of business, Quarterly GAAP financial 

statements throughout the reinsurance year, within 45 days of the end of each 

quarter. 

(3) If prepared in the normal course of business, annual Securities and Exchange 

Commission filings (i.e. 10K), if applicable, within 30 days of making such 

filings. 

(4) If prepared in the normal course of business, quarterly Securities and Exchange 

Commission filings (i.e. 10Q) within the reinsurance year, if applicable, within 

30 days of making such filings. 

(5) Controls or management recommendations received from an independent 

auditor regarding the Company, by June 1 preceding the start of the reinsurance 

year. 

(6) The most recent State Insurance Department Examination Report, within 30 

days of receipt by the Company of such report. 

(c) If an MGA is designated, the MGA must provide the following: 

(1) Annual audited GAAP financial statements for the previous calendar or fiscal 

year, as applicable, by June 1 preceding the start of the reinsurance year. 

(2) Quarterly GAAP financial statements throughout the reinsurance year, within 

45 days of the end of each quarter. 

(3) If prepared in the normal course of business, annual Securities and Exchange 

Commission filings (i.e. 10K), within 30 days of making such filings. 

(4) If prepared in the normal course of business, Quarterly Securities and Exchange 

Commission filings (i.e. 10Q) within the reinsurance year, within 30 days of 

making such filings. 

(5) Internal controls or management recommendations received from an 

independent auditor regarding the MGA, by June 1 preceding the start of the 

reinsurance year. 

3 
2025 LPRA Appendix II 07-01-24 

(d) The Company must provide an explanation for any ratio falling outside the 

requirements of 7 C.F.R. §§ 400.162. 

(e) Upon request the Company shall provide a description of all financial relationships that 

pertain to crop insurance business reinsured under this Agreement. 

(f) {Reserved} 

(g) {Reserved} 

(h) The Company shall submit Total Expense Reports, only for business under the LPRA. 

Reports shall itemize total expenses for all eligible livestock price insurance contracts 

reinsured by FCIC, be prepared according to the National Association of Insurance 

Commissioners Annual Statement Instructions as specified in the Total Expense 

Template, and be completed for the: 

(1) Previous reinsurance year’s actual data certified by a financial officer, 

authorized by the Company, as being in compliance with FCIC procedures; 

(2) Current reinsurance year’s estimated data; and 

(3) Upcoming reinsurance year’s projected data. 

(i) Posted reserves for which estimated liability exceeds five percent of policyholder 

surplus for: 

(1) All open contingent liabilities; and 

(2) All pending arbitration, mediation, or litigation. 

(j) Upon request, the Company, and MGA if applicable, shall provide one or more of the 

following: 

(1) Actual and estimated cash flow documentation; 

(2) Copies of all line of credit agreements with financial institutions used to fund 

any expenses, including amounts due FCIC; or 

(3) Any other financial information related to the Company or the MGA that would 

assist FCIC in determining the financial capacity to perform under the terms of 

this Agreement. 

4 
2025 LPRA Appendix II 07-01-24 

SECTION IV. INSURANCE OPERATIONS 

The Company’s Plan shall include: 

(a) The name, title, mailing address, e-mail address, office telephone numbers, and fax 

telephone numbers of the officer or employee authorized by the Company to sign and 

certify the Monthly Settlement Report. Any changes regarding the officer or employee 

shall be provided to FCIC in writing prior to the submission of the next Monthly 

Settlement Report. 

(b) The names, titles, mailing addresses, e-mail addresses, office telephone numbers, and 

fax telephone numbers of at least two officers or employees authorized by the 

Company, and two officers or employees authorized by the MGA, if an MGA is 

designated by the Company, as managers of the eligible livestock price insurance 

contracts reinsured under the Agreement. Each person will act as liaison or contact 

between the Company and FCIC regarding this Agreement. 

(c) The names, mailing addresses, e-mail addresses, office telephone numbers, and fax 

telephone numbers of the office of the Company, or any entity, that qualifies as a 

service provider and a description of the services it provides. 

(d) The names, mailing addresses, e-mail addresses, office telephone numbers, and fax 

telephone numbers of all regional offices and service centers operated by the Company 

or its MGA that provides a service related to eligible livestock price insurance 

contracts reinsured under this Agreement and a description of the services they 

provide. 

(e) An organizational chart showing the names and positions of individuals performing the 

following functions with respect to Federal crop insurance operations: chief executive 

officer, chief operations officer, chief financial officer, and the highest ranking 

individuals responsible for information technology, underwriting, claims, quality 

control, training and development, sales and marketing, compliance, and reinsurance. If 

an individual performs more than one of the foregoing functions, the chart shall so 

indicate. Any changes to the information contained in this chart must be reported 

within 30 days to FCIC in writing. 

(f) The name and address of the Company or MGA, if applicable, and the bank that will 

make Electronic Funds Transfer payments to FCIC for the Company. 

(g) The name, street address, city, county, state, country, city code, county code, state code, 

country code, (codes can be obtained from http://www.nist.gov/itl and 

http://www.itl.nist.gov/itl) and Congressional District for the organization to whom 

payments from FCIC should be remitted for amounts due on Monthly and Annual 

Settlement reports. 

5 
2025 LPRA Appendix II 07-01-24 

(h) The Training and Performance Evaluation Plan (TPEP) and the Training and 

Performance Evaluation Report (TPER) required in Appendix IV. The TPEP will be 

approved if all elements identified in Appendix IV are contained therein. Approval of 

the TPEP in the Plan of Operations is not a determination of the sufficiency of the 

Company’s training and evaluation program. 

(i) The Quality Control Plan required in Appendix IV. The Quality Control Plan will be 

approved if all elements identified in Appendix IV are contained therein. Approval of 

the Quality Control Plan in the Plan of Operations is not a determination of the 

sufficiency of the Company’s quality controls. 

(j) With respect to section II(a)(5) of the Agreement: 

(1) The Company shall review its contract arrangements with any affiliate that is 

also a cooperative or trade association (or any affiliate that, in turn, has a 

contractual arrangement with a cooperative or trade association) to determine 

whether the cooperative or trade association seeks to qualify for payments to 

producers under section 508(b)(5)(B) of the Act (7 U.S.C. § 1508 (b)(5)(B)). 

If a cooperative or trade association seeks to qualify under section 508(b)(5)(B) 

of the Act, the Company shall submit the items listed below and receive 

written FCIC approval before the cooperative or trade association will be 

deemed to qualify under section 508(b)(5)(B) of the Act. 

(A) The names, addresses, and telephone numbers of each cooperative 

association or trade association with which the Company or its affiliates 

intends to enter into a licensing or other financial agreement or contract 

authorized by sections 508(b)(5)(B), or has entered into such 

agreements; 

(B) A copy of the agreement or contract with the cooperative association or 

trade association and a list of the states where the cooperative 

association or trade association will return all or part of the CAT 

administrative fee received from the Company to its producers; and 

(C) For each State listed in subparagraph (B), a letter from the State 

Insurance Department stating whether the payment of all or a portion of 

the CAT administrative fees on behalf of producers is in compliance 

with the rebating laws of such State. 

(2) For those cooperative or trade associations previously determined by FCIC to 

have qualified under section 508(a)(9)(B)(iii) of the Act, the Company must 

provide a current certification from an officer of the cooperative or trade 

association that it will make any payments to its producers during the 

reinsurance year under the same terms and conditions under which it received 

original approval from FCIC. 

6 
2025 LPRA Appendix II 07-01-24 

(l) E-Business Implementation Plan: The Company must include the following 

information to demonstrate compliance with the Freedom to E-File Act and section 508 

of the Rehabilitation Act (29 U.S.C. § 794(d)). 

(1) The process the Company will use to provide and receive electronically all 

required forms and other information concerning the Federal crop insurance 

program. The Company must provide a description of: 

(A) The process the Company will use to allow producers to file 

electronically all paperwork required for participation in the program. 

(B) The type of electronic signature that will be used by producers. 

(C) The name, address and e-mail address for one contact person with the 

vendor being used to provide electronic signatures. 

(D) The security measures the Company will use to protect the confidential 

nature of the data and information submitted by producers from being 

reviewed, revised or otherwise used by unauthorized persons. A thirdparty certification of security measures must be obtained from a 

recognized security certification firm and must be provided. 

(E) The process the Company will use to document revisions to data and 

information submitted by producers. 

(F) The storage, backup and retention procedures being used by the 

Company for electronically filed documents. Provide the name, address, 

and phone number for one contact person for the Company who 

manages the storage and backup procedures for the Company. 

(2) The names, URL's, facsimile numbers, and mailing addresses of each location 

where producers may electronically access and file the paperwork required for 

participation in the program. 

(3) Describe the directions being provided with respect to how to access the 

information and forms, properly completing and submitting them; meeting 

filing deadlines; obtaining user ID and password, etc. 

(4) The online responsibilities of the crop insurance agent to each producer who 

files or retrieves required paperwork electronically with the Company. 

(5) The process for obtaining consent from the producer to electronically conduct 

crop insurance business on a partial or complete basis with the Company. 

(6) Provide the procedures a producer must use to withdraw consent to 

electronically conduct crop insurance business on a partial or complete basis 

with the Company. 

7 
2025 LPRA Appendix II 07-01-24 

(7) Provide the procedures that a producer must use to request a paper copy of an 

electronic record. 

(8) The statement of the required hardware and software needed by a producer to 

access, obtain, and retain electronic documents from the Company. 

(m) A general description of the Company’s Information Technology architecture and 

operating environment (e.g., hardware and software) to establish operating capacity and 

compatibility with RMA systems, including whether these systems are managed inhouse or through service providers, and the names of any such service providers. The 

description should, at a minimum, include the types and major version numbers of 

operating systems and databases; major programming languages and software products; 

and the name and major version number, if applicable, of any Company developed 

system that interacts with RMA systems, including a general description of the network 

architecture and security capabilities of such systems and industry standards or 

methodologies used for data exchange and software development. 

(n) A complete description of the process the Company will use to retain all records 

relative to eligible livestock price insurance contracts reinsured under this Agreement 

(e.g. applications, summaries of coverage, claims of loss, etc.). 

(1) The description shall include the office addresses and telephone numbers of the 

locations where such records are retained. 

(2) If records are retained by sales agencies or sales agents, the Company must 

report those records’ location(s) in accordance with Appendix III. 

(3) The description shall include a certification that the Company has in place the 

security measures sufficient to ensure the confidentiality, integrity, and 

availability of any records in a manner consistent with FISMA. 

(4) If records are kept electronically, the description shall include the processes and 

procedures for the electronic storage and retrieval of such records, including locations 

of the principal and backup server locations. 

(o) If requested by FCIC, any information related to the Company or MGA that would 

assist FCIC in determining the operational capacity to perform under the terms of this 

Agreement. 

(p) The following information regarding intended business decreases, agent/agency 

contract terminations, and agent/agency compensation reductions. 

(1) A summary of your intensions to decrease business for the 2025 reinsurance 

year, including location, crop, and plan of insurance. 

(2) A list of agent/agencies whose contract has been or will be terminated for the 

2025 reinsurance year including location. 

8 
 

2025 LPRA Appendix II 07-01-24 

(3) A list of agent/agencies whose compensation has been or will be decreased 

for the 2025 reinsurance year, including location and revised compensation 

terms. 

SECTION V. FCIC REINSURANCE BUSINESS PLAN 

The Plan shall include: 

(a) The maximum reinsurable net book premium volume for which the Company requests 

reinsurance. (This may be more than the total provided for item (V)(b)). 

(b) Estimates of the net book premium, by insurance plan, to be designated in the 

Commercial Fund and the Private Market Fund, within each State for the reinsurance 

year. 

(c) A declaration of the percent of the net book premiums and associated liability for 

ultimate net losses the Company will cede to FCIC in the Commercial Fund and Private 

Market Fund in each State designated in accordance with section V(b). 

(1) Selling and servicing eligible livestock price insurance contracts in a State for 

which no declaration has been made by the Company under this subsection will 

result in the automatic designation of a retention of 100 percent net book 

premium and associated liability for ultimate net losses for such State. 

(2) In the case of the Company acquiring another AIP, the Company merging with 

another AIP, or the Company being acquired by another AIP, and the 

percentage declarations for any State made under section V(c) are different 

between the Company and the other AIP, the Commercial Fund retention 

percentage for the combined net book premiums and associated liability in such 

States will be deemed by FCIC to be the higher percentage. 

(d) A declaration as to the Company’s intention to place a portion of its net liability (after 

FCIC reinsurance) in the commercial reinsurance market and/or to use private market 

instruments. 

(1) Commercial Reinsurance Market 

(i) The company shall submit, within 10 days of its receipt of the executed 

reinsurance documentation, a copy of the reinsurance treaties issued to 

the Company with a description of the type of reinsurance, attachment 

points and limits, aggregate limits, minimum deposit, and premium 

rates, and other applicable terms; and 

(ii) The percent subscribed by each reinsurer to each treaty, or binder, and 

the names of each reinsurer, intermediary, or broker. 

9 
2025 LPRA Appendix II 07-01-24 

(2) Private Market Instruments 

(i) A description of the private market instruments the Company intends to 

use. 

(ii) Name, address, and phone number of the Company personnel 

responsible for managing the purchase and redemption of private market 

instruments. 

(iii) Name, address, and phone number of the intermediary/broker 

responsible for purchasing the private market instruments on behalf of 

the Company. 

(iv) The Company’s administrative guidelines and conditions for private 

market instrument purchasing and redemption. 

SECTION VI. RISK ASSESSMENT AND CONTINGENCY PLAN 

The risk assessment shall consist of, at a minimum, the following: 

(a) A copy of the latest maximum probable loss risk assessment, whether prepared by or on 

behalf of the Company. The assessment must detail the magnitude and frequencies of 

the risks assessed and include a description of the methodology used. 

(b) For each of the risks listed in subsection (c): 

(1) An estimate of the probability of occurrence; 

(2) A rationale for the estimate; 

(3) An assessment of the impact on the Company; and 

(4) A contingency plan for how the Company will be able to meet the obligations 

under the Agreement should the event described by such risk occur. The plan 

must describe: 

(A) How the Company will ensure that sufficient resources will be available 

to continue operations and service eligible livestock price insurance 

contracts for current and any previous reinsurance years, as applicable; 

(B) How the Company would meet its obligations for continuity of 

indemnity payments to producers, to accurately calculate premium and 

indemnities, to bill premium timely, and to prevent data corruption; 

10 
2025 LPRA Appendix II 07-01-24 

(C) If the Company uses an MGA identify how the Company will obtain or 

retain sufficient financial and operational capacity to manage a delivery 

system through resources other than those currently provided by the 

MGA; 

(D) How the Company will ensure that sufficient cash resources will be 

retained to continue servicing operations and meet all requirements of 

the Agreement; 

(E) How the Company will ensure that it retains sufficient expertise in crop 

insurance sales, underwriting, loss adjustment, quality control, data 

processing, and all other facets of crop insurance sales and service to 

continue operations until all requirements of the Agreement have been 

met; and 

(F) The physical security of current and backup systems; how backup 

systems will be deployed in the event they are needed; an estimate as to 

how long before normal operations may be expected to resume in the 

event the backup system is needed as the primary operational system; 

and how personally identifiable information will be protected in a 

transition from primary to backup systems. 

(c) Risks: 

(1) Crop insurance expenses exceed the A&O subsidy provided by FCIC. 

(2) Underwriting gains are insufficient to offset any expense deficit identified in 

paragraph (1). 

(3) Policyholder surplus decreases more than ten percent in any calendar year. 

(4) A significant interruption occurs in computer hardware or software that affects 

operations or data transfer capabilities (such as due to a computer virus, security 

breach, communications failure, etc.). 

(5) A rating agency determines the Company’s ability to meet its current 

obligations is marginal and that its financial condition is vulnerable. 

(6) Lines of credit or other financial arrangements become unavailable or is 

inadequate to meet cash flow needs. 

(7) Commercial reinsurance becomes unavailable or its cost rises (or ceding 

commissions received decline) significantly. 

(8) If the Company uses an MGA or service providers, the MGA or service 

provider: 

(A) Is no longer able to perform the requirements of its agreement with the 

Company; 

11 
2025 LPRA Appendix II 07-01-24 

(B) No longer has the financial or operational capacity to enable the 

Company to comply with the requirements of the Agreement; or 

(C) Becomes ineligible to participate in the Federal crop insurance program. 

(9) Any other material threat or risk that the Company may be aware of or have 

prior knowledge of that should be considered in the selling and servicing of 

eligible livestock price insurance contracts reinsured under the Agreement. 

12