PREMIUM SCHEDULE FOR ADDITIONAL COVERAGE.

SEC. 101. PREMIUM SCHEDULE FOR ADDITIONAL COVERAGE. (a) Expected Market Price.—Section 508(c) of the Federal Crop Insurance Act (7 U.S.C. 1508(c)) is amended by striking paragraph (5) and inserting the following: “(5) Expected market price.— “(A) Establishment or approval.—For the purposes of this title, the Corporation shall establish or approve the price level (referred to in this title as the ‘expected market price’) of each agricultural commodity for which insurance is offered. “(B) General rule.—Except as otherwise provided in subparagraph (C), the expected market price of an agricultural commodity shall be not less than the projected market price of the agricultural commodity, as determined by the Corporation. 114 STAT. 361 “(C) Other authorized approaches.—The expected market price of an agricultural commodity— “(i) may be based on the actual market price of the agricultural commodity at the time of harvest, as determined by the Corporation; “(ii) in the case of revenue and other similar plans of insurance, may be the actual market price of the agricultural commodity, as determined by the Corporation; “(iii) in the case of cost of production or similar plans of insurance, shall be the projected cost of producing the agricultural commodity, as determined by the Corporation; or “(iv) in the case of other plans of insurance, may be an appropriate amount, as determined by the Corporation.”. (b) Premium Amounts.—Section 508(d) of the Federal Crop Insurance Act (7 U.S.C. 1508(d)) is amended— (1) in paragraph (2), by striking subparagraphs (B) and (C) and inserting the following: “(B) In the case of additional coverage equal to or greater than 50 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount of the premium shall— “(i) be sufficient to cover anticipated losses and a reasonable reserve; and “(ii) include an amount for operating and administrative expenses, as determined by the Corporation, on an industry-wide basis as a percentage of the amount of the premium used to define loss ratio.”; and (2) by adding at the end the following: “(3) Performance-based discount.—The Corporation may provide a performance-based premium discount for a producer of an agricultural commodity who has good insurance or production experience relative to other producers of that agricultural commodity in the same area, as determined by the Corporation.”. (c) Payment Schedule.—Section 508(e)(2) of the Federal Crop Insurance Act (7 U.S.C. 1508(e)(2)) is amended— (1) in the matter preceding the subparagraphs, by striking “The amount” and inserting “Subject to paragraph (4), the amount”; and (2) by striking subparagraphs (B) and (C) and inserting the following: “(B) In the case of additional coverage equal to or greater than 50 percent, but less than 55 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of— “(i) 67 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and 114 STAT. 362 “(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses. “(C) In the case of additional coverage equal to or greater than 55 percent, but less than 65 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of— “(i) 64 percent of the amount of the premium established under subsection (d)(2)B)(i) for the coverage level selected; and “(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses. “(D) In the case of additional coverage equal to or greater than 65 percent, but less than 75 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of— “(i) 59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and “(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses. “(E) In the case of additional coverage equal to or greater than 75 percent, but less than 80 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of— “(i) 55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and “(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses. “(F) In the case of additional coverage equal to or greater than 80 percent, but less than 85 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of— “(i) 48 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and “(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses. “(G) Subject to subsection (c)(4), in the case of additional coverage equal to or greater than 85 percent of 114 STAT. 363 the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of— “(i) 38 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and “(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.”. (d) Temporary Prohibition on Continuous Coverage.—Section 508(e) of the Federal Crop Insurance Act (7 U.S.C. 1508(e)) is amended by striking paragraph (4) and inserting the following: “(4) Temporary prohibition on continuous coverage.—Notwithstanding paragraph (2), during each of the 2001 through 2005 reinsurance years, additional coverage under subsection (c) shall be available only in 5 percent increments beginning at 50 percent of the recorded or appraised average yield.”. (e) Premium Payment Disclosure.—Section 508(e) of the Federal Crop Insurance Act (7 U.S.C. 1508(e)) is amended by adding at the end the following: “(5) Premium payment disclosure.—Each policy or plan of insurance under this title shall prominently indicate the dollar amount of the portion of the premium paid by the Corporation.”. (f) Conforming Amendment.—Section 508(g)(2)(D) of the Federal Crop Insurance Act (7 U.S.C. 1508(g)(2)(D)) is amended by striking “(as provided in subsection (e)(4))”.