NAMA Shortcuts
Member Directory
Best of NAMA 2015
Upcoming Events
Chapters
Agri-Marketing Conf
More NAMA












FCSIC BOARD OF DIRECTORS DECREASES INSURANCE PREMIUMS FOR FARM CREDIT BANKS
Source: Farm Credit System Insurance Corporation news release

The Farm Credit System Insurance Corporation board of directors voted today to set the insurance premium assessment rate for Farm Credit System (System) banks at 15 basis points of their adjusted insured debt for 2017. Last October, the board notified the System, for prudent planning purposes, that the insurance premium would likely be 20 basis points for 2017.

The board also announced the continued assessment of the 10-basis-point risk surcharge on nonaccrual loans and other-than-temporarily impaired investments.

"The board decided to decrease the premium rate on adjusted insured debt because preliminary reports indicate that insured debt increased approximately 6 percent during 2016, and this increase was lower than anticipated. With last year's premium rate of 16 basis points for the first half of the year and 18 basis points for the second half of the year, we have made good progress toward the statutory target," said Jeffery S. Hall, Chairman of the FCSIC board of directors.

"At year-end 2016, insured debt was approximately $257.9 billion, up by $14.7 billion from $243.2 billion at year-end 2015," Mr. Hall said.

Twice a year, the FCSIC board reviews the insurance premium rate and makes adjustments, if necessary, to maintain the secure base amount, which is 2 percent of the adjusted insured debt outstanding at System banks. According to preliminary results, the unallocated Farm Credit Insurance Fund level was 1.97 percent of adjusted insured debt outstanding, or $73 million below the 2 percent secure base amount.

The board's premium review is based on the following factors:
An assessment of the current level of the Insurance Fund and the projected growth of insured obligations
The likelihood of any potential Insurance Fund losses
The financial condition of the System banks and associations
The outlook for the agricultural economy
Any risks in the financial environment

"It is anticipated that with a 15-basis-point premium rate, System banks will be able to grow their insured debt up to 8 percent in 2017, and FCSIC will still make progress toward the 2 percent secure base amount. FCSIC will review premium rates again in June 2017," Mr. Hall said.

In addition to setting premiums, the board of directors voted to adopt a policy statement on insurance premiums and a policy statement on the insurance of assets.

FCSIC is managed by a three-member board of directors. In addition to Chairman Hall, Dallas P. Tonsager and Kenneth A. Spearman serve as members of the board.


Search News & Articles





















Proudly associated with:
American Business Media Canadian Agri-Marketing Association National Agri-Marketing Association
Agricultural Relations Council National Association of Farm Broadcasters American Agricultural Editors' Association Livestock Publications Council
All content © 2017, Henderson Communications LLC. | User Agreement