Appendix 1

The proposed A&O; rates recognize that premiums, and thus, A&O; reimbursements, increase dramatically at higher coverage levels. For example, the premium (and current A&O; payment) for an 85% policy is 60% greater than that for a 75% policy, yet A&O; expenses are only 25% higher given relative loss frequencies. For this reason, RMA focused on the 80% and 85% coverage levels for much of the A&O; reduction.

In the tables below, A&O; payments for the 2004 corn APH (category - All Other), CRC (category - Revenue, including GRIP with the Harvest Price Option), and GRP (category - Group Risk, including GRIP without the Harvest Price Option) plans of insurance in Black Hawk County, Iowa are illustrated. A&O; payments for coverage levels of 75% and below are quite similar between the current and proposed A&O; rate schedules. Further, A&O; payments for the 80% and 85% (and higher) coverage levels are still much greater than for the 75% coverage level, despite the reduction in A&O; rates for these higher coverages.

Expense Reimbursements: Comparison of Current and Proposed SRA Payment Terms for
APH and Revenue Plans of Insurance

Coverage Level %		APH Expense Payment		CRC Expense Payment

	Premium	Current	Proposed	Current	Proposed
$/policy
50	$52.50	$12.79	$12.63	$11.01	$10.86
55	$56.60	$13.87	$13.70	$11.94	$11.77
60	$63.60	$15.51	$15.32	$13.36	$13.17
65	$72.20	$17.69	$17.47	$15.23	$15.02
70	$83.10	$20.36	$20.11	$17.53	$17.28
75	$100.00	$24.50	$24.20	$21.10	$20.80
80	$121.00	$29.65	$26.26	$25.53	$22.63
85	$145.60	$35.67	$30.58	$30.72	$26.35

Expense Reimbursements: Comparison of Current and Proposed SRA Payment Terms for
GRP Plan of Insurance


	Coverage Level %	Premium	Current Expense Payment	Proposed Expense Payment
$/policy
70	$69.23	$15.72	$15.51
75	$100.00	$22.70	$22.40
80	$130.77	$29.68	$26.28
85	$169.23	$38.42	$32.83
90	$230.77	$52.38	$44.77


	Privacy & Security \| Nondiscrimination Statement \| Document Accessibility \| Credits
	Unauthorized attempts to upload or change information on this service are strictly prohibited and may be punishable under the Computer Fraud and Abuse Act of 1986 (Public Law 99-474) and the National Information Infrastructure Protection Act.