Create a STAX Coverage

All Reinsurance Years

STAX can be added as a stand-alone policy or as a related coverage on a companion policy. However, the steps for each are different. The process for adding STAX to a companion policy requires an additional step to link the STAX coverage and the companion policy. Also, when adding STAX to a companion policy, it is restricted as follows:

• STAX-RP can only be linked to a related coverage plan of “YP (01)”, “RP (02)”, “AYP (04)”, or “ARP (05)”.
• STAX-RPHPE can only be linked to a related coverage plan of “RPHPE (03)” or “ARPHPE (06)”.

The following two sub-sections discuss the new fields and requirements for adding STAX. Many of the user interface changes that occurred from STAX are included in this section. Additional STAX interface changes not discussed here are included in “Other Interface Changes”. For more detailed information on adding a new policy or coverage, see "Add a New MPCI Policy" and see "Add a Coverage to a Policy".

STAX can be added as a stand-alone policy or as a coverage on a companion policy. The System will allow two or more STAX coverages to exist on the same policy for the same RY/State/County/Crop when the:

• Type/Practice combination is different on each coverage, and
• Plan Codes for all STAX coverages are the same.

Regardless of whether you are creating a stand-alone STAX policy or adding it to a companion policy, the fields displayed are similar. For each of the following fields, make the necessary selection for the STAX coverage in addition to the selections you would make for a standard coverage:

a. County: Select the county the coverage is being created for.
b. Crop Name: Select the crop the coverage is being created for. The crops available are dependent on those available in the actuarials for the State/County.
c. Crop Plan: Select either “STAX-RP” or “STAX-RPHPE”. The System will validate your selection and refresh the page to show these additional STAX fields: Area Loss Trigger, Coverage Range, Protection Factor, and Related Coverage,
d. Type and Practice: These fields function the same as when creating other coverages; however, for STAX- RP (035) and STAX-RPE (36), the selection of Type and Practice is only required when different Area Loss Triggers, Coverage Ranges, and/or Protection Factors are elected by Type and Practice for the plans. If Type/Practice are not indicated, the System will default the Protection Factor (described in “f” below) to the lowest available for the crop.

**e-g: The System will allow different Area Loss Triggers, Coverage Ranges, and/or Protection Factors for each unique Type and Practice on the policy.**
e. Area Loss Trigger: From this dropdown, select the coverage level to include on the coverage. Depending on the allowable options for the State/County, your options may be: “90”, “85”, “80”, and “75”.
f. Coverage Range: From this dropdown, select the range which represents the amount of the expected area revenue the Insured wants covered by STAX. Depending on the Area Loss Trigger selected, STAX may provide coverage for up to 20% of the expected area revenue, so your coverage range options may include: “0”, “5”, “10”, “15”, or “20”.

NOTE: "0" will only be available if Type and Practice fields are populated on the selected STAX (Plan 35 or 36) coverage record and the selected Area Loss Trigger is "90%".

If there is a related companion policy, the Coverage Range value must be taken into account as follows:
• If the related companion policy has a Plan Code of 01, 02, or 03, the STAX Coverage Range plus the Coverage Level elected on the base coverage cannot exceed the Area Loss Trigger for the same Type/Practice on the STAX coverage.

EXAMPLE

If the YP (01) base coverage has a Coverage Level of 75% and the related STAX-RP (35) coverage has a Coverage Range of 20% and an Area Loss Trigger of 90%, then 75% + 20%= 95%. Since 95% is greater than the Area Loss Trigger of 90%, the Coverage Range on the STAX coverage must be reduced to 15% to be accepted by RMA (75 + 15 = 90, which is the same as the Area Loss Trigger on the STAX coverage).

• If the related companion policy has a Plan Code of 04, 05, or 06, the STAX Coverage Range cannot exceed the limit established in the STAX SPOI for the Protection Factor selected on the related base coverage.

EXAMPLE 

A Bailey County, Texas AYP (04) base coverage has a Protection Factor of 110% and the related STAX-RP (35) coverage has a Coverage Range of 20% and an Area Loss Trigger of 90%. Since the AYP Protection Factor of 110% is greater than the Protection Factor limit of 96% contained in the STAX SPOI, the Coverage Range must be reduced to 5% for the STAX coverage to be accepted.

If STAX is a stand-alone or companion policy, the Coverage Range value must be taken into account.
g. Protection Factor: In the Protection Factor box, type the protection factor percentage for the Practice/Type or use the arrows to change the default value. The available values are from 80-120%, in 1-point increments.

NOTE: If Type/Practice is not indicated on the coverage, the Protection Factor will default to the lowest available for the crop.

h. Related Coverage: If the STAX coverage is related to an underlying policy, then mark the Related Coverage checkbox. Marking this checkbox will display the Select Related Coverage dropdown so the STAX coverage and related companion policy can be linked together. This topic is covered in “2. Link a Related Companion Policy to a STAX Coverage”. If the base coverage is later canceled, this checkbox will be removed by the System and the companion policy becomes a stand-alone policy.

NOTE: If the companion policy has already been flagged as having a Related STAX Coverage, then in the Select Related Coverage dropdown, the companion coverage will be available for selection.

If there’s a related companion policy, the STAX coverage needs to be linked to it per RMA. To do this, you must edit first the companion policy and then the STAX coverage.

Editing the Companion Policy

1. After the STAX coverage has been created, edit the base coverage on the companion policy (On the Coverages tab of the policy, select the County hyperlink of the base coverage to open the View Coverage page > on the View Coverage page, click Edit to open the Maintain Coverage page).
2. On the Maintain Coverage page, in the Coverage Information section, mark the Related STAX Coverage checkbox. A note displays: “Related STAX Coverage must exist for the same crop on the same policy.”

NOTE: If the related coverage is later canceled, this checkbox will be removed by the System.

3. Click Save & Exit to return to the Coverages tab.

Editing the STAX Coverage

4. After the companion policy has been edited to include the Related STAX Coverage checkbox, then edit the STAX coverage (On the Coverages tab of a policy, select the County hyperlink of the STAX coverage to open the View Coverage page > on the View Coverage page, click Edit to open the Maintain Coverage page).
5. On the Maintain Coverage page, in the Coverage Information section, from the Select Related Coverage dropdown, select the base coverage to link to the STAX coverage.

NOTE: This dropdown is only displayed if the Related Coverage checkbox is marked on the base coverage.

6. Click Save & Exit to return to the Coverages tab. The STAX coverage is now linked to the companion policy. The System automatically creates the STAX detail lines based on the base coverage detail lines. For zero coverage STAX, the System will create the STAX detail lines but automatically mark them as "Uninsurable" and apply a Non-premium Acreage Code of “E”.