II 

115TH CONGRESS 

1ST SESSION S. 1025 

To reform the Federal Crop Insurance Act and reduce Federal spending 

on crop insurance. 

IN THE SENATE OF THE UNITED STATES 

MAY 3, 2017 

Mr. FLAKE (for himself and Mrs. SHAHEEN) introduced the following bill; 

which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry 

A BILL 

To reform the Federal Crop Insurance Act and reduce 

Federal spending on crop insurance. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Assisting Family Farmers through Insurance Reform 

6 Measures Act’’ or the ‘‘AFFIRM Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Adjusted gross income and per person limitations on share of insurance 

premiums paid by Corporation. 


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Sec. 3. Cap on reimbursements for administrative and operating expenses of 

crop insurance providers. 

Sec. 4. Renegotiation of Standard Reinsurance Agreement. 

Sec. 5. Cap on overall rate of return for crop insurance providers. 

Sec. 6. Prohibition on premium subsidy for harvest price policies. 

Sec. 7. Crop insurance premium subsidies disclosure in the public interest. 

1 SEC. 2. ADJUSTED GROSS INCOME AND PER PERSON LIMI2 TATIONS ON SHARE OF INSURANCE PRE3 MIUMS PAID BY CORPORATION. 

4 Section 508(e)(1) of the Federal Crop Insurance Act 

5 (7 U.S.C. 1508(e)(1)) is amended— 

6 (1) by striking ‘‘For the purpose’’ and inserting 

7 the following: 

8 ‘‘(A) PAYMENT AUTHORITY.—Subject to 

9 subparagraphs (B) and (C), for the purpose’’; 

10 and 

11 (2) by adding at the end the following: 

12 ‘‘(B) ADJUSTED GROSS INCOME LIMITA13 TION.—The Corporation shall not pay a part of 

14 the premium for additional coverage for any 

15 person or legal entity that has an average ad16 justed gross income (as defined in section 

17 1001D(a) of the Food Security Act of 1985 (7 

18 U.S.C. 1308–3a(a))) that is greater than 

19 $250,000. 

20 ‘‘(C) PER PERSON LIMITATION.—The Cor21 poration shall not pay more than $40,000 for 


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1 any reinsurance year to any person or legal en2 tity for premiums under this section.’’. 

3 SEC. 3. CAP ON REIMBURSEMENTS FOR ADMINISTRATIVE 

4 AND OPERATING EXPENSES OF CROP INSUR5 ANCE PROVIDERS. 

6 Section 508(k)(4) of the Federal Crop Insurance Act 

7 (7 U.S.C. 1508(k)(4)) is amended by adding at the end 

8 the following: 

9 ‘‘(G) ADDITIONAL CAP ON REIMBURSE10 MENTS.— 

11 ‘‘(i) IN GENERAL.—Notwithstanding 

12 subparagraphs (A) through (F), the total 

13 amount of reimbursements for administra14 tive and operating costs for the 2018 rein15 surance year for all types of policies and 

16 plans of insurance shall not exceed 

17 $900,000,000. 

18 ‘‘(ii) ADJUSTMENT.—For the 2019 re19 insurance year and each subsequent rein20 surance year, the dollar amount in effect 

21 pursuant to clause (i) shall be increased by 

22 the inflation factor established for the ad23 ministrative and operating costs limitation 

24 in the 2011 Standard Reinsurance Agree25 ment.’’. 


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1 SEC. 4. RENEGOTIATION OF STANDARD REINSURANCE 

2 AGREEMENT. 

3 Section 508(k)(8) of the Federal Crop Insurance Act 

4 (7 U.S.C. 1508(k)(8)) is amended by striking subpara5 graph (F). 

6 SEC. 5. CAP ON OVERALL RATE OF RETURN FOR CROP IN7 SURANCE PROVIDERS. 

8 Section 508(k)(3) of the Federal Crop Insurance Act 

9 (7 U.S.C. 1508(k)(3)) is amended— 

10 (1) by striking ‘‘(3) SHARE OF RISK.—The’’ 

11 and inserting the following: 

12 ‘‘(3) RISK.— 

13 ‘‘(A) SHARE OF RISK.—The’’; and 

14 (2) by adding at the end the following: 

15 ‘‘(B) LIMITATION ON AVERAGE RATE OF

16 RETURN.—The target average rate of return for 

17 reinsured companies for the 2018 reinsurance 

18 year and each subsequent reinsurance year shall 

19 be 8.9 percent of retained premiums.’’. 

20 SEC. 6. PROHIBITION ON PREMIUM SUBSIDY FOR HARVEST 

21 PRICE POLICIES. 

22 Section 508(e) of the Federal Crop Insurance Act (7 

23 U.S.C. 1508(e)) is amended by adding at the end the fol24 lowing: 

25 ‘‘(9) PROHIBITION ON PREMIUM SUBSIDY FOR

26 HARVEST PRICE POLICIES.—Notwithstanding any 


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1 other provision of law, beginning with the 2018 rein2 surance year, the Corporation shall not pay any 

3 amount of premium subsidy in the case of a policy 

4 or plan of insurance that is based on the actual mar5 ket price of an agricultural commodity on the date 

6 of harvest.’’. 

7 SEC. 7. CROP INSURANCE PREMIUM SUBSIDIES DISCLO8 SURE IN THE PUBLIC INTEREST. 

9 Section 502(c)(2) of the Federal Crop Insurance Act 

10 (7 U.S.C. 1502(c)(2)) is amended— 

11 (1) by redesignating subparagraphs (A) and 

12 (B) as subparagraphs (C) and (D) respectively; and 

13 (2) by inserting before subparagraph (C) (as so 

14 redesignated) the following: 

15 ‘‘(A) DISCLOSURE IN THE PUBLIC INTER16 EST.—Notwithstanding paragraph (1) or any 

17 other provision of law, except as provided in 

18 subparagraph (B), the Secretary shall on an 

19 annual basis make available to the public— 

20 ‘‘(i)(I) the name of each individual or 

21 entity that obtained a federally subsidized 

22 crop insurance, livestock, or forage policy 

23 or plan of insurance during the previous 

24 reinsurance year; 


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1 ‘‘(II) the amount of premium subsidy 

2 received by the individual or entity from 

3 the Corporation; and 

4 ‘‘(III) the amount of any Federal por5 tion of indemnities paid in the event of a 

6 loss for that reinsurance year for each pol7 icy associated with that individual or enti8 ty; and 

9 ‘‘(ii) for each private insurance pro10 vider, a description by the name of the pri11 vate insurance provider of— 

12 ‘‘(I) the underwriting gains 

13 earned through participation in the 

14 federally subsidized crop insurance 

15 program; and 

16 ‘‘(II) the amount paid under this 

17 subtitle for— 

18 ‘‘(aa) administrative and op19 erating expenses; 

20 ‘‘(bb) any Federal portion of 

21 indemnities and reinsurance; and 

22 ‘‘(cc) any other purpose. 

23 ‘‘(B) LIMITATION.—The Secretary shall 

24 not disclose under subparagraph (A) informa25 tion relating to individuals and entities covered 


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1 by a catastrophic risk protection plan offered 

2 under section 508(b).’’. 

Æ 


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