[Federal Register Volume 64, Number 108 (Monday, June 7, 1999)]
[Rules and Regulations]
[Pages 30214-30229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13983]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 407
RIN 0563-AB06
Group Risk Plan of Insurance
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the
Group Risk Plan of Insurance Common Policy Basic Provisions and Crop
Provisions for Barley, Corn, Cotton, Forage, Sorghum, Peanuts,
Soybeans, and Wheat, to add regulations to provide for the operation of
an alternative risk management tool to be known as the Group Risk Plan
of Insurance (GRP). This plan will insure against the widespread loss
of production of certain crops in a county. It is intended primarily
for use by those producers whose yields tend to follow the county
average yield. GRP pays only when the average yield of the entire
county drops below the expected county yield for the insured crop as
set by FCIC. Payment is based on the percentage of decline in a county
or area wide yield below the insured's trigger yield. The insured need
not have a loss to collect an indemnity. Alternately, the insured may
have a loss and not collect an indemnity.
EFFECTIVE DATE: July 7, 1999.
FOR FURTHER INFORMATION CONTACT: William Klein, Insurance Management
Specialist, Research and Development, Product Development Division,
Federal Crop Insurance Corporation, United States Department of
Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816)
926-7730.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
The Office of Management and Budget (OMB) has determined this rule
to be significant for the purposes of Executive Order 12866 and,
therefore, has been reviewed by OMB.
Cost-Benefit Analysis
A Cost-Benefit Analysis has been completed and is available to
interested persons at the address listed above. In summary, the
analysis finds that the expected benefits of this action outweighs the
costs. Clarification of the provisions and administrative changes that
simplify program operations will benefit producers, FCIC, and insurance
providers.
Paperwork Reduction Act of 1995
Under the provisions of the Paperwork Reduction Act of 1995 (44
U.S.C. chapter 35), the collections of information in this rule have
previously been approved by the Office of Management and Budget (OMB)
under control number 0563-0053 through April 30, 2001. This rule will
replace the pilot Group Risk Plan of Insurance Common Policy Basic
Provisions and the crop provisions for Barley, Corn, Cotton, Forage,
Sorghum, Peanuts, Soybeans, and Wheat. Therefore, the amendment set
forth in this rule does not revise the content or alter the frequency
of the information collection cleared under the above referenced
docket.
Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995, (UMRA),
establishes requirements for Federal agencies to assess the effects of
their regulatory actions on State, local, and tribal governments and
the private sector. This rule contains no Federal mandates (under the
regulatory provisions of Title II of UMRA) for
[[Page 30215]]
State, local, and tribal governments or the private sector. Therefore,
this rule is not subject to the requirements of sections 202 and 205 of
UMRA.
Executive Order 12612
It has been determined under section 6(a) of Executive Order 12612,
Federalism, that this rule does not have sufficient federalism
implications to warrant the preparation of a Federalism Assessment. The
provisions contained in this rule will not have a substantial direct
effect on States or their political subdivisions or on the distribution
of power and responsibilities among the various levels of government.
Regulatory Flexibility Act
This regulation will not have a significant impact on a substantial
number of small entities. The effect of this regulation on small
entities will be no greater than on larger entities. Under the GRP
program, an insured is required to complete an application and an
acreage report. Neither a notice of loss nor a claim for indemnity are
required, since a loss is based on the county average yield falling
below the expected county yield.
The amount of work required of the insurance companies and
representatives of FCIC delivering and servicing these policies will
not increase from the amount of work currently required to deliver
previous policies to which this regulation applies. In fact, this
action reduces the paperwork burden and there is a lessor impact on the
insured and the reinsured company because the yield is based on
National Agricultural Statistics Service (NASS) yields rather than
individual insured's yields. Therefore, this action is determined to be
exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C.
605) and no Regulatory Flexibility Analysis was prepared.
Federal Assistance Program
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372 which require intergovernmental consultation with State and local
officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
Executive Order 12988
This rule had been reviewed in accordance with Executive Order
12988 on civil justice reform. The provisions of this rule will not
have a retroactive effect. The provisions of this rule will preempt
State and local laws to the extent such State and local laws are
inconsistent herewith. The administrative appeal provisions published
at 7 CFR part 11 must be exhausted before action for judicial review of
any determination made by FCIC may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, and safety. Therefore,
neither an Environmental Assessment nor an Environmental Impact
Statement is needed.
National Performance Review
This regulatory action is being taken as part of the National
Performance Review Initiative to eliminate unnecessary or duplicative
regulations and improve those that remain in force.
Background
On Tuesday, October 8, 1996, FCIC published a proposed rule in the
Federal Register at 61 FR 52717-52727 to add a new part 407 to chapter
IV of title 7 of the Code of Federal Regulations, Group Risk Plan of
Insurance Common Policy Basic Provisions and Crop Provisions for
Barley, Corn, Cotton, Forage, Sorghum, Peanuts, Soybeans, and Wheat.
The new provisions will be effective for the 2000 and succeeding crop
years for the Group Risk Plan of Insurance Common Policy Basic
Provisions and Crop Provisions for Barley, Corn, Cotton, Forage,
Sorghum, Peanuts, Soybeans, and Wheat Crop Provisions. These provisions
will replace the pilot program provisions currently in effect for the
1999 crop year.
Following publication of the proposed rule, the public was afforded
45 days to submit written comments and opinions. A total of 45 comments
were received from reinsured companies, an insurance service
organization, and a producer. The comments received and FCIC's
responses are as follows:
Comment: One commenter from a reinsured company recommended that
GRP either remain a pilot program for further evaluation ``since it has
not yet shown itself to be a success'' or that it be eliminated. The
commenter cited no participation for GRP barley, minimal participation
for GRP cotton, sorghum, peanuts, and wheat, and moderate interest in
corn and soybeans, particularly in the Midwestern states of Iowa,
Indiana, Minnesota, and Wisconsin. The commenter further noted that
participation had decreased for both corn and soybeans between 1995 and
1996, but did acknowledge that participation in forage production had
increased.
Response: While participation may be low for specific GRP programs
in some areas, net acres insured grew by 32 percent and total premium
grew 40 percent between 1995 and 1996. Wheat acreage, for example,
increased by 300 percent and total wheat premium increased 370 percent.
These statistics indicate a growing GRP program rather than one in
decline. FCIC believes that participation can be significantly
increased by additional changes. First, if CAT coverage is extended to
all GRP crops, significant increases in participation, similar to what
occurred with GRP forage in 1997, could occur. Secondly, there is
evidence that agents have received limited information about the
product. At recent meetings sponsored by the National Association of
Professional Agents in Iowa and Minnesota, and attended by FCIC
personnel, numerous agents stated that they had not been informed of
the benefits of the GRP program. FCIC expects increased participation
in GRP insurance programs in the future due to increased publicity,
increased agent and producer awareness of the product, and perhaps
expansion of CAT coverage. Therefore, FCIC will proceed with GRP as a
risk management tool.
Comment: A reinsured company commented that CAT coverage and
expansion of the Crop Revenue Coverage (CRC) and Income Protection (IP)
programs may attract producers that might otherwise be interested in
GRP. Secondly, expanding GRP only adds to the confusion introduced by
several plans of coverage and adds expenses at a time when it is
imperative to simplify and reduce expenses.
Response: New crop insurance programs, which includes Revenue
Insurance, are providing necessary new risk management protection for
producers, since no single insurance product meets the needs of all
producers. Further, offering a variety of insurance products should
significantly increase participation. Also, expanding GRP should not
add to the confusion, add more expenses, or increase complexity. In
fact, of all the insurance products available, GRP is the simplest,
least costly to administer, and provides potentially greater protection
for producers at a significantly reduced premium.
Comment: An insurance service organization questioned the need for
the language in Sec. 407.2 (b) which states that the contract ``* * *
may be offered directly to producers through agents of the Farm Service
Agency (FSA).''
[[Page 30216]]
Response: The provision actually states that the contract may be
offered ``directly to producers through agents of the United States
Department of Agriculture.'' This language is required as a fall back
position if coverage in some areas is not available through the private
sector.
Comment: An insurance service organization questioned language in
Sec. 407.2(c) that prohibits more than one insurance policy for a
person on the same crop, county and crop year, unless approved in
writing by FCIC. The commenter asks whether ``insurance policy'' refers
to GRP, or to other multiple peril crop insurance policies (MPCI) as
well, and if so, under what circumstances would multiple policies be
acceptable.
Response: This provision applies to all federally approved crop
insurance policies including MPCI and GRP. Since both the MPCI policy
and the GRP policy require that all acreage of the insured crop in the
county be insured under the same policy (except high risk land) the
producer is prohibited from obtaining both MPCI coverage and GRP
coverage on the same crop in the county.
Comment: An insurance service organization asked if a reinsured
company representative is included in the language in Secs. 407.6(a)(1)
and (a)(2)(i) ``an agent or employee of the Corporation.''
Response: This provision was intended to distinguish between agents
and employees of FCIC and agents and employees of the reinsured
company. For clarification, FCIC has amended the language in the
sections cited above from ``agent or employee of the Corporation'' to
``a representative of a reinsured company or FCIC.''
Comment: One commenter from an insurance service organization
recommended moving the last phrase of Sec. 407.6(a)(2)(iii), ``* * *
such insured shall be granted relief the same as if otherwise entitled
thereto,'' to a separate finishing paragraph (a)(3) and moving
``whenever'' from Sec. 407.6(a) to the beginning of Sec. 407.6(a)(1).
Response: FCIC agrees that the above cited phrase is clearer as a
separate paragraph and has accordingly redesignated it as
Sec. 407.6(a)(3). The word ``whenever'' applies to all the conditions
and, therefore, must remain at Sec. 407.6(a).
Comment: One commenter from an insurance service organization
expressed concern that the language in Sec. 407.6 (b) and (c) does not
appear to provide a level playing field since reinsured companies are
held liable for unauthorized acts of their agents, but apparently no
one pays for FCIC agent errors except the taxpayers.
Response: Under the terms of the Standard Reinsurance Agreement,
reinsured companies are responsible for any error or omission on the
part of their agents, loss adjusters, or other contractors. This
provision simply ensures that such responsibility is not waived by this
rule. The Government's oversight bodies ensure that FCIC's employees or
agents are held accountable for their acts of omission.
Comment: One commenter from an insurance service organization
expressed concern over the apparent contradiction between Secs. 407.6
and 407.7. Section 407.6(c) indicates that companies may grant relief
based on arbitration, but Sec. 407.7 states that any exceptions under
Sec. 407.6 will be ``at the sole discretion of the Corporation.''
Response: The language in Sec. 407.7 is not intended to involve
FCIC in the arbitration process between the company and insureds.
However, arbitration may not change the terms of the contract.
Therefore the language, ``at the sole discretion of the Corporation,''
remains in Sec. 407.7.
Comment: An insurance service organization commented that using the
term ``person'' in Sec. 407.8 (a), instead of ``entity'' to include
more than individuals can lead to confusion. They believe the term
could suggest that no group entities may be insured.
Response: The term ``person'' is defined in the Common Crop
Insurance Policy, Group Risk Plan of Insurance Common Policy, and other
policies insured by or approved by the Corporation. It appropriately
encompasses an individual, a partnership, an association, a
corporation, an estate, a trust, or other legal entity. Therefore, no
change has been made in the term or its use.
Comment: An insurance service organization recommended simplifying
the language in the last sentence in Sec. 407.8(a) as follows: ``The
application must be submitted to the insurance provider on or before
the applicable sales closing date on file in the insurance provider's
local office.''
Response: FCIC agrees with the recommendation and has modified the
language accordingly.
Comment: One comment from an insurance service organization
addressed extension of sales closing dates and cessation of sales due
to adverse conditions. The commenter expressed concern over the
timeliness of such notification and the vehicle by which it would be
made.
Response: The Manager of FCIC has the authority to extend fall
sales closing dates, and suspend sales under Sec. 407.8 (b). Once a
decision is made, electronic notification will be made to companies as
soon as possible. In addition, FCIC will place a notice of the extended
date in the Federal Register. Therefore, the provisions in
Sec. 407.8(b) will remain.
Comment: Several comments were received from insurance service
organizations questioning the name, inclusion, and use of the GRP
Disclaimer. One commenter suggested renaming the form, ``Acknowledgment
of Differences'' because ``disclaimer'' suggested the need to bring
flaws to the policyholder's attention. Another suggested removing the
disclaimer or using one generic form. This commenter explained that
Sec. 407.8(c) was too detailed, that the disclaimer was not part of the
application, and that GRP will no longer be a pilot program or ``new
and different.'' Another commenter questioned why the disclaimer was
not listed as part of the policy in Sec. 407.9.
Response: FCIC agrees that the name, ``Acknowledgment of
Differences,'' is more positive and has changed the form name
accordingly. FCIC disagrees, however, that the form reference should be
removed from Sec. 407.8(c). A single generic disclaimer, as suggested,
is provided as an exhibit in the revised crop year GRP procedure. The
form is needed for clarity. GRP is different from other insurance
programs in that an indemnity is triggered by a loss in the county and
not by an individual's loss. It is imperative that insureds understand
that they can sustain a loss on their crop and still not be indemnified
if the county loss does not trigger an indemnity. This acknowledgment
is not part of the policy as described in Sec. 407.9. It does not add
to or vary the terms of the policy. It merely highlights for the
insured how the GRP risk management tool differs from traditional crop
insurance. Therefore, the suggestion to list the disclaimer as part of
the policy has not been adopted.
Comment: An insurance service organization asked whether the
Proposed Rule for 1998 GRP Barley and Wheat crop provisions contains
the same language as those currently in effect for the 1997 crop year.
If the language is the same, they questioned whether the 1997 crop
provisions would remain in effect for the 1998 crop year, or would new
1998 provisions be issued.
Response: On October 8, 1996, when GRP was published as a proposed
rule, these crop provisions contained the same language as the 1997 GRP
Barley and Wheat pilot program crop
[[Page 30217]]
provisions sent out prior to June 30, 1997. The 1997 GRP Barley and
Wheat pilot program crop provisions remain in effect for the 1998 and
1999 crop years because the June 30 contract change date passed prior
to final rule publication. Consequently, these Crop Provisions, set out
in this final rule, will be effective for the 2000 crop year and will
be issued following final rule publication. These Crop Provisions
include language changes from the 1999 crop provisions under the pilot
program.
Comment: An insurance service organization noted that the opening
reference in Sec. 407.9 incorrectly cites Provision 16 as containing
continuous policy language rather than Provision 19.
Response: FCIC acknowledges the reference error. Based on
additional edits to these provisions, the reference now correctly cites
section 18.
Comment: An insurance service organization commented that the
language in Sec. 407.9 in the 3rd paragraph under ``both policies''
which states, ``You may select any dollar amount * * * by the acreage
reporting date,'' could be misunderstood by insureds to mean that this
choice may be made at acreage reporting time. They noted that this
information is more clearly provided in the sixth paragraph and asked
whether it is necessary that the language be included in both places.
Response: FCIC believes that both references to acreage planted by
the acreage reporting date are necessary. FCIC has clarified paragraph
3 to specify that the selection of the dollar amount of protection must
occur by the sales closing date and that this protection will be
provided for each acre of the crop planted on or before the acreage
reporting date and shown on the acreage report.
Comment: An insurance service organization recommended that FCIC
modify the definition for the term ``Cancellation date'' from ``prior
to that date'' to ``on or before that date'' since it is possible to
cancel a policy on the cancellation date.
Response: FCIC agrees with the recommendation and has modified the
definition accordingly.
Comment: An insurance service organization recommended that the
term ``insurance provider'' be expanded to include FSA. This makes the
policy language clearer and less wordy by eliminating the need to keep
referring to ``companies or FSA offices''.
Response: In the future FSA is not expected to deliver crop
insurance, and will only be used as a fall back if the private sector
cannot deliver the program in an area. Based on this contingency
``FSA'' has been added to the definition of ``insurance provider.''
Comment: An insurance service organization expressed concern about
language in section 3(b) of the GRP Basic Provisions which specifies
that only acreage planted to the insured crop on or before the acreage
reporting date will be insured. They are concerned about how insurance
providers will verify the acreage.
Response: Companies are required to use the same procedures
currently used to verify acreage planted on or before the final
planting date under other insurance plans.
Comment: An insurance service organization commented that the
language in section 3(d) of the GRP Basic Provisions, ``* * * we will
not insure acreage where the insured failed to follow good farming
practices'' is not necessary. They pointed out that good farming
practices are not a ``moral hazard'' for GRP since losses are
determined from the county average rather than an individual yield.
Response: Section 508(a)(3)(c) of the Federal Crop Insurance Act,
as amended (Act), provides that failure to follow good farming
practices will result in the acreage not being insurable. This
provision applies to all policies insured or reinsured by FCIC. No
change will be made in this provision.
Comment: An insurance service organization asked whether the CAT
level of coverage referenced in section 4 of the GRP Basic Provisions
and elsewhere, and currently available only for GRP forage, would be
made available on all GRP crops.
Response: There are no plans to expand CAT coverage to other GRP
crop programs for the 1999 crop year. However, the Manager of FCIC has
the authority to expand CAT coverage for any or all of the other seven
GRP crops.
Comment: An insurance service organization recommended modifying
the language in section 7(a) of the GRP Basic Provisions to refer to
``net acreage'' instead of ``all acreage'' in which you have a share,
or rearrange the various factors so it does not seem to refer to your
share in the application.
Response: The insured is required to report all acreage of each
insured crop in the county, both insurable and not insured, on or
before the acreage reporting date shown in the Special Provisions.
Therefore, FCIC has not modified this language. To prevent possible
confusion of ``share in the application,'' FCIC has moved the phrase
``in which you have a share'' to after ``for each insured crop.''
Comment: One commenter from an insurance service organization
questioned whether it mattered if acreage was planted by the acreage
reporting date, as required in section 7(a), since a GRP loss is
triggered by the county yield.
Response: The crop must be planted before acreage can be accurately
reported. Therefore, to protect the integrity of the program, this
provision has not been changed.
Comment: An insurance service organization noted that section 8 of
the GRP Basic Provisions, items (a)-(c), address the administrative
fees and when they are due. They asked whether this provision should
state that CAT and limited fees are due the first year even if zero
acres are reported.
Response: The Agricultural Research, Extension, and Education
Reform Act of 1998 was passed subsequent to the comment,. This Act
provided that the administrative fee will be due on the billing date.
Payment of an administrative fee will not be required if a bona fide
zero acreage report is filed on or before the acreage reporting date
for the crop, as specified in paragraph 8(e).
Comment: An insurance service organization noted that section 8(d)
of the GRP Basic Provisions addresses premium for limited and
additional coverage levels, and asked whether there should be some
reference to the subsidy equaling the imputed premium for CAT policies.
Response: FCIC does not believe adding imputed premium language is
necessary and may in fact add detail that would only serve to confuse
GRP policyholders.
Comment: An insurance service organization pointed out that
sections 8(f) and (g) of the GRP Basic Provisions address delinquency
and termination for non-payment of premium and asks whether there
should also be some reference in this section to the consequences of
failure to pay the administrative fees timely.
Response: FCIC agrees with the recommended change and has added new
provisions in sections 8(g) and (h).
Comment: An insurance service organization expressed concern that
the language in the proposed GRP Corn Crop Provisions provided that
sweet corn, popcorn, and hybrid seed corn may be insured through a
``written agreement'' rather than through an ``agreement in writing.''
Written agreements, referenced in section 9, have more rules and
regulations and generally must be submitted to the RSO for approval.
Companies would object to no longer having the authority to
[[Page 30218]]
approve the insuring of different kinds of corn. Response: FCIC
disagrees with the recommendation of replacing the language ``written
agreement'' with ``agreement in writing'' in the GRP Corn Crop
Provisions because an ``agreement in writing'' alters the contract, but
does not have the contractual structure and guidelines of a formal
``written agreement.'' FCIC does agree that the written agreement
requirement in both the GRP Corn and Sorghum Crop Provisions need not
require Regional Service Office (RSO) approval. Therefore, while FCIC
will leave the ``written agreement'' language in the crop provisions,
it will provide in procedure that a written agreement for adding other
types of GRP corn or sorghum to the contract be pre-approved by FCIC so
that companies will be able to approve these written agreements without
RSO approval.
Comment: An insurance service organization asked what GRP policy
provisions would be subject to change by written agreement. For
example, the current GRP handbook states that only land physically
located in the insured county is insurable. The commenter questioned
whether it will now be possible to insure land across the county line
in the same manner as MPCI (APH) policies. The commenter also asks
whether such agreements require RSO approval.
Response: All requirements that may be revised by written agreement
will specifically be provided in the provision for such requirement in
the Group Risk Plan Common Policy or the Crop Provision. Section 3 of
the proposed GRP Basic Provisions provides that, ``Crops grown on
acreage located in another county must be reported and insured
separately.'' There are no plans at this time to alter that requirement
by written agreement. Delegation of authority for approving written
agreements is set out in FCIC procedure.
Comment: An insurance service organization commented that
underwriting details do not belong in the policy but need to be
resolved before the new policies are approved and issued. They
expressed concern that the written agreement provisions may add to the
administrative paperwork and that new GRP procedures should allow
written agreements to be approved by the companies to the extent
possible.
Response: FCIC's goal is to address underwriting details in
procedure. The program must remain clean and relatively simple to
administer. Written agreements are only used to temporarily deviate
from the terms of the policy and should not pose any greater burden
than for any other policy. Section 9 of the GRP Basic Provisions,
therefore, has not been amended to allow reinsured companies to approve
written agreements.
Comment: An insurance service organization recommended that
language be added to section 13 of the GRP Basic Provisions to make it
similar to the MPCI (APH) Basic Provisions which require that all
policies be voided when more than one policy that insures the same
interest is discovered, unless the duplication is determined to be
inadvertent.
Response: FCIC agrees with the recommendations and has modified
section 13 to make it more consistent with the provisions in the MPCI
(APH) Basic Provisions. A provision has also been added to provide the
insurance provider with recourse in the event that an insured obtained
the multiple policies intentionally.
Comment: One commenter from an insurance service organization
questioned why section 15 of the GRP Basic Provisions still refers to
the Food Security Act of 1985 since producers are no longer required to
be in compliance with the Sodbuster/Swampbuster provisions of the Act.
Response: While producers are no longer required to be in
compliance with the Sodbuster/Swampbuster provisions of the Food
Security Act, the Controlled Substance provisions still apply.
Therefore, no change will be made.
Comment: An insurance service organization questioned the wisdom of
listing specific legislation in section 15 of the GRP Basic Provisions
because the references become outdated when the legislation is revised
or repealed.
Response: If one or more of the cited Acts were to be modified or
repealed, the insured person may no longer be in violation. Therefore,
FCIC does not believe that references to specific legislation poses any
problem and has not deleted the references.
Comment: An insurance service organization questioned the reasons
for minor differences in the first three and last two paragraphs of
section 15 of the GRP Basic Provisions. The commenter also questioned
whether they could be made to match exactly, with the exception of ``up
to 30 percent'' in FCIC item (b).
Response: FCIC agrees with comment and has eliminated the minor
differences in these paragraphs.
Comment: An insurance service organization noted that the title of
section 17 ``Determinations'' of the GRP Basic Provisions is
appropriate for the FCIC policy, but recommended that FCIC change the
title to ``Arbitration'' for reinsured policies, consistent with the
1995-NCIS 700B Basic Provisions.
Response: FCIC believes that the section title ``Determinations''
is appropriate for both FCIC and reinsured policies. FCIC has clarified
that all determinations under reinsured policies will be made by the
companies, and that disputes are resolved by means of arbitration.
Accordingly, FCIC will not change the title of this section but has
redesignated it section 16.
Comment: Two recommendations from an insurance service organization
involved modification of provisions in Sec. 407.12(2)(d) of the GRP
Cotton crop provisions. Because of lack of punctuation, it appeared to
read that only colored lint cotton planted into an established grass or
legume is uninsurable rather than all cotton planted in this manner.
The industry believes that the provisions would be clearer if formatted
like the MPCI (APH) cotton policies. They also asked that colored lint
cotton, for example, be made insurable by written agreement.
Response: FCIC agrees and has reformatted section 2(d) based on the
MPCI cotton policies and has provided for insurability of colored lint
cotton and other types by written agreement or when authorized by the
Special Provisions.
Comment: One commenter from an insurance service organization
expressed concern that cotton payment yields are determined
substantially later than other crops.
Response: The cotton payment yields are determined later than a
number of other GRP crops because final yields cannot be determined
until the cotton is ginned. While an earlier announcement of the cotton
payment yields is desirable, the logistics of the cotton industry
preclude it.
Comment: An insurance service organization recommended modifying
the definition of harvest in the Group Risk Plan for Forage to read,
``Removal of the forage from the field, and/or rotational grazing,''
rather than simply, ``and rotational grazing,'' to allow for those who
do one or the other but not both.
Response: FCIC disagrees with the recommendation. The present
language ``Removal of the forage from the field and rotational
grazing'' already allows for an insured who does one or the other but
not both. Therefore, no change has been made.
Comment: An insurance service organization recommended that the
Program Dates table in the Group Risk Plan for Peanuts be modified by
changing the phrase, ``and all other states,'' in the second group of
counties
[[Page 30219]]
and states to read, ``and all other states except New Mexico and
Oklahoma.'' This change is necessary because these two states have a
March 15 cancellation and termination date and, therefore, belong in
the third grouping.
Response: FCIC agrees with the comment and has revised the table
accordingly.
Comment: An individual who is both an agriculture lender and
producer commented that he did not favor the Group Risk Plan of
Insurance because of weather variability, the many differences among
producers within a county, the fact that all producers could obtain the
same amount of insurance, and that the county had to trigger before a
loss was due. CRC, on the other hand, allows a good proven producer to
insure a crop for more than a poor producer and cover both price and
yield risk.
Response: FCIC recognizes that some insurance products fit some
individual's needs better than other products. The per acre premium for
CRC insurance is considerably greater than for GRP coverage. While CRC
works well for the commenter, neighboring producers whose yields trend
with the county may find that GRP meets their insuring needs and is a
better buy for the coverage provided.
In addition to the changes described above, FCIC has moved the
contract change date for the Forage Group Risk Plan forward from June
30 to August 31. This change was based on the availability of NASS
yield data. The term ``Actuarial Table'' was replaced with ``actuarial
documents,'' for clarity and for consistency with the MPCI Common
Policy. The term ``Protection per acre'' was replaced with ``Maximum
protection per acre'' for clarity. FCIC added the following
definitions: ``additional coverage,'' ``agreement in writing,''
``catastrophic risk protection,'' ``dollar amount of protection per
acre,'' ``good farming practices,'' ``limited coverage,'' and ``MPCI,''
to section 1 for clarification.
In addition, FCIC has made the following editorial changes to the
Group Risk Plan of Insurance Basic Provisions:
1. Section 407.8(c)(4)(ii)--Modified to recognize that an MPCI
policy may or may not be available to a producer for certain crops and
counties in their region.
2. Section 407.9--Added Risk Management Agency (RMA) to the last
sentence in the first paragraph of Sec. 407.9. The additional language
recognizes establishment of the Risk Management Agency on October 1,
1996.
List of Subjects in 7 CFR Part 407
Crop Insurance, Group Risk Plan, Barley, Corn, Cotton, Forage,
Peanuts, Sorghum, Soybean, Wheat.
Final Rule
Accordingly, for the reasons set forth in the preamble, the Federal
Crop Insurance Corporation adds 7 CFR part 407 to read as follows:
PART 407--GROUP RISK PLAN OF INSURANCE REGULATIONS FOR THE 2000 AND
SUCCEEDING CROP YEARS
Sec.
407.1 Applicability.
407.2 Availability of Federal crop insurance.
407.3 Premium rates, amounts of protection, and coverage levels.
407.4 OMB control numbers.
407.5 Creditors.
407.6 Good faith reliance on misrepresentation.
407.7 The contract.
407.8 The application and policy.
407.9 Group risk plan common policy.
407.10 Group risk plan for barley.
407.11 Group risk plan for corn.
407.12 Group risk plan for cotton.
407.13 Group risk plan for forage.
407.14 Group risk plan for peanuts.
407.15 Group risk plan for sorghum.
407.16 Group risk plan for soybean.
407.17 Group risk plan for wheat.
Authority: 7 U.S.C. 1506(1), 1506(p).
Sec. 407.1 Applicability.
The provisions of this part are applicable only to those crops and
crop years for which a Crop Provision is contained in this part.
Sec. 407.2 Availability of Federal crop insurance.
(a) Insurance shall be offered under the provisions of this part on
the insured crop in counties within the limits prescribed by and in
accordance with the provisions of the Federal Crop Insurance Act, (7
U.S.C. 1501 et seq.) (the Act). The crops and counties shall be
designated by the Manager of the Federal Crop Insurance Corporation
(FCIC) from those approved by the Board of Directors of FCIC.
(b) The insurance will be offered through companies reinsured by
FCIC under the same terms and conditions as the contract contained in
this part. These contracts are clearly identified as being reinsured by
FCIC. Additionally, the contract contained in this part may be offered
directly to producers through agents of the United States Department of
Agriculture. Those contracts are specifically identified as being
offered by FCIC.
(c) No person may have in force more than one insurance policy
issued or reinsured by FCIC on the same crop for the same crop year, in
the same county, unless specifically approved in writing by FCIC.
(d) If a person has more than one contract under the Act
outstanding on the same crop for the same crop year, in the same
county, that have not been properly approved by FCIC, all such
contracts shall be voided for that crop year and the person will be
liable for the premium on all contracts, unless the person can show to
the satisfaction of FCIC that the multiple contracts of insurance were
inadvertent and without the fault of the person.
(e) If the unapproved multiple contracts of insurance are shown to
be inadvertent, and without the fault of the insured, the contract with
the earliest application will be valid and all other contracts on that
crop in the county for that crop year will be canceled. No liability
for indemnity or premium will attach to the contracts so canceled.
(f) The person must repay all amounts received in violation of this
section with interest at the rate contained in the contract (see
Sec. 407.8, paragraph 21).
(g) A person whose contract with FCIC or with a company reinsured
by FCIC under the Act has been terminated because of violation of the
terms of the contract is not eligible to obtain crop insurance under
the Act with FCIC or with a company reinsured by FCIC unless the person
can show that the termination was improper and should not result in
subsequent ineligibility.
(h) All applicants for insurance under the Act must advise the
insurance provider, in writing at the time of application, of any
previous applications for insurance or contracts of insurance under the
Act within the last 5 years and the present status of any such
applications or insurance.
Sec. 407.3 Premium rates, amounts of protection, and coverage levels.
(a) The Manager of FCIC shall establish premium rates, amounts of
protection, and coverage levels for the insured crop that will be
included in the actuarial documents on file in the insurance provider's
office. Premium rates, amounts of protection, and coverage levels may
be changed from year to year.
(b) At the time the application for insurance is made, the person
must elect an amount of protection and a coverage level from among
those contained in the actuarial documents for the crop year.
Sec. 407.4 OMB control numbers.
The information collection activity associated with this rule has
been
[[Page 30220]]
previously approved by the Office of Management and Budget (OMB) under
control number 0563-0053.
Sec. 407.5 Creditors.
An interest of a person in an insured crop existing by virtue of a
lien, mortgage, garnishment, levy, execution, bankruptcy, involuntary
transfer or other similar interest shall not entitle the holder of the
interest to any benefit under the contract.
Sec. 407.6 Good faith reliance on misrepresentation.
(a) Notwithstanding any other provision of the crop insurance
contract, an insured shall be granted relief to the extent of the
insured's detrimental reliance or the extent of the policy benefits,
whichever is less, under the following conditions:
(1) The person has entered into a contract of crop insurance under
this part;
(2) A representative of FCIC made a misrepresentation or other
erroneous action or advice;
(3) Such error concerned provisions of the insurance contract not
contained in the Group Risk Plan of Insurance Basic Provisions, the
Crop Provisions, the Federal Crop Insurance Act, or the regulations
contained in this chapter;
(4) As a result of the error, the insured:
(i) Is indebted for additional premiums; or
(ii) Has suffered a loss to a crop which is not insured or for
which the person is not entitled to an indemnity because of failure to
comply with the terms of the insurance contract, but which the person
believed to be insured, or believed the terms of the insurance contract
to have been complied with or waived; and
(5) The Manager finds that:
(i) A representative of FCIC made such misrepresentation or took
other erroneous action or gave erroneous advice;
(ii) The person reasonably and in good faith relied on such
misrepresentation, erroneous action or advice to the person's
detriment; and
(iii) To require the payment of the additional premiums or to deny
such person's entitlement to the indemnity would not be fair and
equitable.
(b) For FCIC Policies only, requests for relief under this section
must be submitted to FCIC in writing. FCIC's reviewing officers must
refer such application for relief to the Manager of FCIC for
determination as to whether to grant relief. FCIC's reviewing officers
do not have authority to grant relief under this section.
(c) For Reinsured Policies only, requests for relief under this
section must be submitted to the reinsured company in writing. The
reinsured companies shall use arbitration, in accordance with the rules
of the American Arbitration Association, under contracts for insurance
issued by them under the Act to grant relief under the same terms and
conditions as contained in this section or may establish procedures to
administratively handle relief in accordance with this section.
Granting relief under this section does not absolve the reinsured
company from liability to FCIC for unauthorized acts of its agents.
Sec. 407.7 The contract.
The insurance contract shall become effective upon the acceptance
by FCIC or the reinsured company of a complete, duly executed
application for insurance on a form prescribed or approved by FCIC. The
contract shall consist of the accepted application, Group Risk Plan of
Insurance Basic Provisions, Crop Provisions, Special Provisions,
Actuarial Table, and any amendments, endorsements, or options thereto.
Changes made in the contract shall not affect its continuity from year
to year. Except as may be allowed under Sec. 407.6, and at the sole
discretion of the Corporation, no indemnity shall be paid unless the
person complies with all terms and conditions of the contract. The
forms required under this part and by the contract are available at the
office of the insurance provider, or the local FSA office, if
applicable.
Sec. 407.8 The application and policy.
(a) Application for insurance, on a form prescribed or approved by
FCIC, must be made by any person who wishes to participate in the
program in order to cover such person's share in the insured crop as
landlord, owner-operator, tenant, or other crop ownership interest. No
other person's interest in the crop may be insured under the
application. The application must be submitted to the insurance
provider on or before the applicable sales closing date on file in the
insurance provider's local office.
(b) FCIC or the reinsured company may reject or no longer accept
applications upon the FCIC's determination that the insurance risk is
excessive. The Manager of the Corporation is authorized in any crop
year to extend the sales closing date for submitting applications for
fall planted crops, unless prohibited by law, upon determining that the
probability and severity of claims will not increase because of the
extension, by placing the extended date on file in the insurance
provider's office and publishing a notice in the Federal Register. If
adverse conditions should develop during the extended period, the
Corporation will require the insurance provider to immediately
discontinue acceptance of applications.
(c) Since this Group Risk Plan differs significantly from
traditional Multiple Peril Crop Insurance, persons who purchase the
Group Risk Plan and their crop insurance agents will be required to
execute an ``Acknowledgment of Differences'' that explains that the
terms and conditions of the Group Risk Plan are different from
traditional crop insurance in that:
(1) The Group Risk Plan indemnity payment, if any, will be made
after the Group Risk Plan premium is received;
(2) A person may have a low yield on his or her individual farm and
not receive a payment under Group Risk Plan; and
(3) A person may not have any loss of production and still collect
under the policy if a loss of production is general in the area.
(4) By executing the ``Acknowledgment of Differences,'' the insured
certifies that:
(i) He or she understands the terms of the Group Risk Plan;
(ii) An MPCI policy may be available in the county; and
(iii) Both a Group Risk Plan and a MPCI Plan cannot be purchased on
the same crop by the same insured in the same county.
Sec. 407.9 Group risk plan common policy.
The provisions of the Group Risk Plan Common Policy for the 2000
and succeeding crop years are as follows:
[FCIC policies]
Department of Agriculture
Federal Crop Insurance Corporation
Group Risk Plan Common Policy
[Reinsured policies]
(Appropriate title for insurance provider)
(This is a continuous policy. Refer to Section 18.)
[FCIC policies]
This insurance policy establishes a risk management program
developed by the Federal Crop Insurance Corporation (FCIC), an
agency of the United States Government, under the authority of the
Federal Crop Insurance Act (Act), as amended (7 U.S.C. 1501 et
seq.). All terms of the policy and rights and responsibilities of
the parties hereto are subject to the Act and all regulations under
the Act published in 7 CFR chapter IV. The provisions of this policy
may not be waived or varied in any way by the crop insurance
representative, or any other representative or employee of FCIC, the
Risk
[[Page 30221]]
Management Agency (RMA) or the Farm Service Agency (FSA). In the
event that the company cannot pay a loss, the claim will be settled
in accordance with the provisions of the policy and paid by FCIC. No
state guarantee fund will be liable to pay the loss.
Throughout this policy, ``you'' and ``your'' refer to the person
shown on the accepted application and ``we,'' ``us,'' and ``our''
refer to the Federal Crop Insurance Corporation. Unless the context
indicates otherwise, the use of the plural form of a word includes
the singular use and the singular form of the word includes the
plural.
[Reinsured policies]
This insurance policy establishes a risk management program
created by the Federal Crop Insurance Corporation (FCIC), an agency
of the United States Government, under the authority of the Federal
Crop Insurance Act (Act), as amended (7 U. S. C. 1501 et seq.).
This insurance policy is reinsured by FCIC under the provisions
of the Act. All terms of the policy and rights and responsibilities
of the parties are subject to the Act and all regulations under the
Act published in 7 CFR chapter IV, and may not be waived or varied
in any way by the crop insurance representative, any other
representative or employee of the company, any representative or
employee of FCIC, the Risk Management Agency, or the Farm Service
Agency (FSA). All provisions of State and local law in conflict with
the provisions of this policy as published in 7 CFR part 407 are
preempted and the provisions of such part will control.
Throughout this policy, ``you'' and ``your'' refer to the person
shown on the accepted application and ``we,'' ``us,'' and ``our''
refer to the reinsured company issuing this policy. Unless the
context indicates otherwise, the use of the plural form of a word
includes the singular use and the singular form of the word includes
the plural.
[Both policies]
The Group Risk Plan of Insurance (GRP) is designed as a risk
management tool to insure against widespread loss of production of
the insured crop in a county. It is primarily intended for use by
those producers whose farm yields tend to follow the average county
yield. It is possible for you to have a low yield on the acreage
that you insure and still not receive a payment under this plan.
For limited or additional coverage you may select any percent
coverage level shown on the actuarial documents. Multiplying your
coverage level percent by the expected county yield shown on the
actuarial documents gives your trigger yield. If the payment yield
that FCIC publishes for the insured crop year falls below your
trigger yield, you will receive a payment.
On or before the sales closing date, you may select any dollar
amount of protection between 60 and 100 percent (except for
Catastrophic Risk Protection (CAT) which is 55 percent) of the
maximum protection per acre shown on the actuarial documents. This
protection will be provided for each acre of the crop planted by the
acreage reporting date and shown on your acreage report (unless
otherwise provided in the crop provisions) in which you have a
share.
In accordance with the Act, FCIC will pay a portion of your
premium, as published in the actuarial documents. The premium rates,
practices, types, maximum protection per acre, and maximum subsidy
per acre are also shown on the actuarial documents.
FCIC will issue the payment yield in the calendar year following
the crop year insured. This yield will be the official estimated
yield published by the National Agricultural Statistics Service
(NASS). You will be paid if the payment yield falls below your
trigger yield. The amount of your payment per net insured acre will
be calculated by subtracting the payment yield from the trigger
yield, dividing that quantity by the trigger yield, and multiplying
that result by your protection per acre for each net acre that you
have insured.
To be eligible to participate in the Group Risk Plan of
Insurance for any crop in any county, and to receive an indemnity
thereunder, you must have an insurable interest in an insured crop
that is planted in the county shown on the approved application. The
crop must be planted for harvest and be reported to us by the
acreage reporting date. You may only purchase coverage under the
Group Risk Plan of Insurance on your net acres of the insured crop.
The insurance contract shall become effective upon the
acceptance by us of a duly executed application for insurance on our
form. Acceptance occurs when we issue a Summary of Protection to
you. The policy shall consist of the accepted application, Group
Risk Plan of Insurance Common Policy Basic Provisions, Crop
Provisions, Special Provisions, actuarial documents, and any
amendments, endorsements, or options.
Agreement To Insure
In return for your payment of the premium and your compliance
with all applicable provisions, we agree to provide risk protection
as stated in this policy. If a conflict exists among the policy
provisions, the order of priority is as follows: (1) The
Catastrophic Risk Protection Endorsement, if applicable; (2) the
Special Provisions; (3) the Crop Provisions; and (4) the Group Risk
Plan Basic Provisions, with (1) controlling (2), etc.
Terms and Conditions
Group Risk Plan of Insurance Basic Provisions
1. Definitions
Acreage report. A report required by section 7 of these Basic
Provisions that contains, in addition to other information, your
report of your share of all acreage of an insured crop in the
county, whether insurable or not insurable.
Acreage reporting date. The date contained in the Special
Provisions by which you must submit your acreage report in order to
be eligible for Group Risk Insurance.
Act. Federal Crop Insurance Act, (7 U.S.C. 1501 et seq.).
Actuarial documents. The material for the crop year which is
available for public inspection in your insurance provider's local
office, and which shows the maximum protection per acre, expected
county yield, coverage levels, premium rates, practices, program
dates, and other related information regarding crop insurance in the
county.
Additional coverage. For GRP, an amount of protection greater
than or equal to: 80 percent of the expected county yield
indemnified at 95 percent of the maximum amount of protection (80/
95); or 85 percent of the expected county yield indemnified at 90
percent of the maximum amount of protection (85/90); or 90 percent
of the expected county yield indemnified at 85 percent of the of the
maximum amount of protection (90/85). The protection is on a per
acre basis as specified in the actuarial documents for the crop,
practice, and type.
Billing date. The date, contained in the actuarial documents, by
which we will bill you for the premium and administrative fee on the
insured crop.
Cancellation date. The calendar date specified in the Crop
Provisions on which insurance for the next crop year will
automatically renew unless the policy is canceled in writing by
either you or us or terminated in accordance with policy terms.
Catastrophic risk protection. The minimum level of coverage
offered by FCIC. For GRP, an amount of protection equal to 65
percent of the expected county yield indemnified at 55 percent of
the maximum protection per acre specified in the actuarial documents
for the crop, practice, and type.
County. Any county, parish, or other political subdivision of a
state shown on your accepted application.
Crop practice. The combination of inputs such as fertilizer,
herbicide, and pesticide, and operations such as planting,
cultivation, and irrigation, used to produce the insured crop. The
insurable practices are contained in the actuarial documents.
Crop Provisions. The part of the policy that contains the
specific provisions of insurance for each insured crop.
Crop year. The period of time within which the insured crop is
normally grown and designated by the calendar year in which the crop
is normally harvested.
Dollar amount of protection per acre. The percentage of coverage
selected by you multiplied by the maximum protection per acre
specified in the actuarial documents for the crop, practice, and
type. The dollar amount of protection per acre is shown on your
Summary of Protection.
Expected county yield. The yield contained in the actuarial
documents, on which your coverage for the crop year is based. This
yield is determined using historical NASS county average yields, as
adjusted by FCIC.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
corporation within USDA.
FSA. The Farm Service Agency, an agency of the United States
Department of Agriculture, or a successor agency.
Good farming practices. The cultural practices generally in use
in the county for the crop to make normal progress toward maturity,
and are those recognized by the Cooperative State Research,
Education, and Extension Service as compatible with agronomic and
weather conditions in the county.
GRP. Group Risk Plan of Insurance.
Insurance provider. The FSA or a private insurance company
approved by FCIC which
[[Page 30222]]
provides crop insurance coverage to producers participating in any
Federal crop insurance program administered under the Act.
Limited coverage. For GRP an amount of protection greater than
or equal to 70 percent of the expected county yield indemnified at
60 percent of the maximum amount of protection (70/60) and less than
80/95, 85/90, and 90/85.
Maximum protection per acre. The highest amount of protection
specified in the actuarial documents.
MPCI. Multiple peril crop insurance, an insurance product based
on an individual yield or amount of insurance.
NASS. National Agricultural Statistics Service, an agency within
USDA, or its successor, that publishes the official United States
Government yield estimates.
Net acres. The planted acreage of the insured crop multiplied by
your share.
Payment yield. The yield determined by FCIC based on NASS yields
for each insurable crop's type and practice, as adjusted by FCIC,
and used to determine whether an indemnity will be due.
Person. An individual, partnership, association, corporation,
estate, trust, or other legal entity, and wherever applicable, a
state or a political subdivision or agency of a state.
Sales closing date. The date contained in the Special Provisions
by which an application must be filed. The last date by which you
may change your crop insurance coverage for a crop year.
Share. Your percentage of interest in the insured crop, as an
owner, operator, or tenant at the time insurance attaches. Premium
will be determined on your share as of the acreage reporting date.
However, only for the purpose of determining the amount of
indemnity, your share will not exceed your share at the acreage
reporting date or on the date of harvest, whichever is less.
Special provisions. The part of the policy that contains
specific provisions of insurance for each crop that may vary by
geographic area.
Subsidy. The portion of your premium, shown on the actuarial
documents as limited and maximum amounts per acre, that FCIC will
pay in accordance with the Act.
Summary of protection. Our statement to you of the crop insured,
dollar amount of protection per acre, premiums, and other
information obtained from your accepted application, acreage report,
and the actuarial documents.
Termination date. The calendar date contained in the Crop
Provisions upon which insurance ceases to be in effect because of
nonpayment of any amount due us under the policy, including premium
and administrative fees.
Trigger yield. The result of multiplying the expected county
yield by the coverage level percentage chosen by you. When the
payment yield falls below the trigger yield, an indemnity is due.
Type. Plants of the insured crop having common traits or
characteristics that distinguish them as a group or class, and which
are designated in the actuarial documents.
USDA. United States Department of Agriculture.
2. Insured Crop
The insured crop will be the crop shown on your accepted
application, as specified in the applicable Crop Provisions, and
must be grown on insurable acres.
3. Insured and Insurable Acreage
(a) The insurable acreage is all of the acreage of the insured
crop for which premium rates are provided by the actuarial documents
and in which you have a share and which is in the county listed in
your accepted application. The dollar amount of protection per acre,
amount of premium, and indemnity will be calculated separately for
each county, type, and practice.
(b) Only the acreage seeded to the insured crop on or before the
acreage reporting date (unless otherwise provided in the Crop
Provisions) and physically located in the county listed on your
accepted application will be insured. Crops grown on acreage
physically located in another county must be reported and insured
separately.
(c) We will not insure any crop grown on any acreage where the
crop was destroyed or put to another use during the insurance period
for the purpose of conforming with, or obtaining a payment under,
any other program administered by the USDA.
(d) We will not insure any acreage where you have failed to
follow good farming practices for the insured crop.
4. Policy Protection
(a) For catastrophic risk protection GRP policies, the dollar
amount of protection per acre will be 55 percent of the maximum
protection per acre specified on the actuarial documents for each
insured crop, practice, and type. For limited and additional
coverage GRP policies, you may select any dollar amount of
protection from 60 percent through 100 percent of the maximum
protection per acre shown on the actuarial documents for the crop,
practice, and type.
(b) The dollar amount of protection per acre, multiplied by your
net insured acreage, is your policy protection for each insured
crop, practice, and type specified in the actuarial documents.
(c) All yields are based on NASS determinations, and such
determinations for the county will be conclusively presumed to be
accurate.
5. Coverage Levels
(a) For catastrophic risk protection GRP policies, the coverage
level is shown on the actuarial documents for each insured crop,
practice, and type. For limited and additional coverage GRP
policies, you may select any percentage of coverage shown on the
actuarial documents for the crop, practice, and type.
(b) Your coverage level multiplied by the expected county yield
shown on the actuarial documents is your trigger yield. If the
payment yield published by FCIC for the insured crop, practice, and
type for the insured crop year falls below your trigger yield, you
will receive an indemnity payment.
(c) You may change the coverage level or amount of protection
for each insured crop on or before the sales closing date. Changes
must be in writing and received by us by the sales closing date.
6. Payment Calculation Factor
Your payment calculation factor will be ((your trigger
yield-payment yield) your trigger yield) for the purposes
of calculating an indemnity payment.
7. Report of Acreage and Share
(a) You must report on our form all acreage for each insured
crop in which you have a share (insurable and not insured) by
practice and type specified in the actuarial documents in each
county listed on your accepted application. This report must be
submitted each year on or before the acreage reporting date for the
insured crop contained in the actuarial documents. If you do not
submit an acreage report by the acreage reporting date, we will
determine your acreage and share or deny liability on the policy.
(b) We will not insure any acreage of the insured crop planted
after the acreage reporting date, unless otherwise provided in the
Crop Provisions.
(c) Your premium will be based on the greater of the acreage
reported on the acreage report or the acreage determined by us to be
accurate.
(d) The payment of an indemnity will be based on your insurable
acreage on the acreage reporting date.
(e) If you misrepresent or omit any information, we will revise
the premium or liability or both for each insured crop in the
county, by type and practice, to the amount we determine to be
correct.
(f) You may insure only your share of the crop, which includes
any share of your spouse and dependent children unless it is
demonstrated to our satisfaction, prior to the sales closing date,
that you and your spouse maintain completely separate farming
operations and that each spouse is the operator of his or her own
separate operation. Any commingling of any part of the operations
will cause shares of you and your spouse to be combined.
8. Administrative Fees and Annual Premium
(a) If you obtain a catastrophic risk protection GRP policy you
will pay an administrative fee:
(1) Of $60 per crop per county;
(2) Payable to the insurance provider on the billing date for
the crop.
(b) If you obtain a limited coverage GRP policy, you will pay an
administrative fee under the same terms and conditions as the
premium for the policy:
(1) Of $50 per crop per county;
(2) Not to exceed $200 per county;
(3) Up to a maximum of $600 per producer.
(4) Limited resource farmers as defined at 7 CFR 457.8 may apply
for a waiver of administrative fees for the limited coverage policy.
(c) If you obtain an additional coverage GRP policy, you will
pay an administrative fee:
(1) Of $20 per crop per county;
(2) Payable under the same terms and conditions as the premium
for the policy.
(d) For limited and additional coverage GRP policies, your
premium is determined by multiplying your policy protection by the
premium rate per hundred dollars of protection for your coverage
level contained
[[Page 30223]]
in the actuarial documents, by 0.01, and subtracting the applicable
subsidy.
(e) For catastrophic risk protection, limited, and additional
coverage GRP policies, payment of an administrative fee will not be
required if you file a bona fide zero acreage report on or before
the acreage reporting date for the crop (if you falsely file a zero
acreage report you may be subject to criminal and administrative
sanctions).
(f) The annual premium is earned and payable at the time the
insured crop is planted. For each insured crop, you will be billed
for premium and the administrative fee by the billing date specified
in the Special Provisions. Premium, administrative fee, and any
other amount owed us is due on the billing date and interest will
accrue if the premium, administrative fee, or any other amount owed
is not received by us before the first day of the month following
the premium billing date.
(g) The premium, administrative fee, and any other amount due,
plus any accrued interest, will be considered delinquent if it is
not paid on or before the termination date specified in the Crop
Provisions. This may affect your eligibility for benefits under
other USDA programs. A debt for any crop insured with us under the
authority of the Act will be deducted from any indemnity due you for
this or any other crop insured with us.
(h) Failure to pay the premium and any administrative fee due,
plus any accrued interest and penalties, by the termination date
will make you ineligible for any crop insurance under the Act for
subsequent crop years until the sales closing date after the date
the debt, including interest and penalties, is paid or satisfactory
arrangements acceptable to us for such payment are made.
9. Written Agreements
Terms of this policy which are specifically designated for the
use of written agreements may be altered by written agreement in
accordance with the following:
(a) You must apply in writing for each written agreement no
later than the sales closing date;
(b) The application for written agreement must contain all
variable terms of the contract between you and us that will be in
effect if the written agreement is not approved;
(c) If approved by us, the written agreement will include all
variable terms of the contract, including, but not limited to, crop
type or variety, the protection per acre, premium rate, and price
election; and
(d) Each written agreement will only be valid for one year. If
the written agreement is not specifically renewed the following
year, insurance coverage for subsequent crop years will be in
accordance with the printed policy.
10. Access to Insured Crop and Record Retention
We may examine the insured crop and any records relating to the
crop and this insurance at any location where such crop or such
records may be found or maintained, as often as we reasonably
require. Records relating to the planting of the insured crop and
your net acres must be retained for three years after the end of the
crop year or three years after the date of payment of the final
indemnity, whichever is later. We may extend the record retention
period beyond three years by notifying you of such extension in
writing. Failure to maintain such records will, at our option,
result in cancellation of the policy or a determination that no
indemnity is due.
11. Transfer of Coverage and Right to Indemnity
If you transfer any part of your share during the crop year, you
may transfer your coverage rights, if the transferee is eligible for
crop insurance. We will not be liable for any more than the
liability determined in accordance with your policy that existed
before the transfer occurred. The transfer of coverage rights must
be on our form and will not be effective until approved by us in
writing. Both you and the transferee are jointly and severally
liable for payment of the premium. The transferee has all rights and
responsibilities under this policy consistent with the transferee's
interest.
12. Assignment of Indemnity
You may assign to another person your right to an indemnity for
the crop year. The assignment must be on our form and will not be
effective until approved in writing by us.
13. Other Insurance
You may not obtain any other crop insurance issued under the
authority of the Act on your share of the insured crop. If we
determine that more than one policy on your share is intentional,
you may be subject to the sanctions authorized under this policy,
the Act, or any other applicable statute. If we determine that the
violation was not intentional, the policy with the earliest date of
application will be in force and all other policies will be void.
Nothing in this paragraph prevents you from obtaining other
insurance not issued under the Act.
14. Legal Action Against Us
(a) You may not bring legal action against us unless you have
complied with all of the policy provisions.
(b) If you do take legal action against us, you must do so
within 12 months of the date of denial of a claim. Suit must be
brought in accordance with the provisions of 7 U.S.C. 1508(j).
(c) Your right to recover damages (compensatory, punitive, or
other), attorney's fees, or other charges is limited or excluded by
this contract or by Federal Regulations.
[FCIC policy]
15. Restrictions, Limitations, and Amounts Due Us
(a) We may restrict the amount of acreage we will insure to the
amount allowed under any acreage limitation program established by
USDA.
(b) Violation of Federal statutes including, but not limited to,
the Act; the controlled substance provisions of the Food Security
Act of 1985; the Food, Agriculture, Conservation, and Trade Act of
1990; and the Omnibus Budget Reconciliation Act of 1993, and any
regulation promulgated thereunder, will result in cancellation,
termination, or voidance of your crop insurance contract. We will
recover any and all monies paid to you or received by you during
your period of ineligibility, and your premium will be refunded,
less an amount for expenses and handling not to exceed 20 percent of
the premium paid or to be paid by you.
(c) Our maximum liability under this policy will be limited to
the policy protection specified in section 4 of this policy. Under
no circumstances will we be liable for the payment of damages
(compensatory, punitive, or other), attorney's fees, or other
charges in connection with any claim for indemnity, whether we
approve or disapprove such indemnity.
(d) We will pay simple interest computed on the net indemnity
ultimately found to be due by us or determined by a final judgment
of a court of competent jurisdiction or a final administrative
determination from, and including, the 61st day after the date we
receive the NASS county yield estimates for the insured crop year.
Interest will be paid only if the reason for our failure to timely
pay is not due to your failure to provide information or other
material necessary for the computation or payment of the indemnity.
The interest rate will be that established by the Secretary of the
Treasury under section 12 of the Contract Disputes Act of 1978 (41
U.S.C. 611 et seq.), and published in the Federal Register.
(e) Any amount illegally or erroneously paid to you or that is
owed to us but is delinquent may be recovered by us through offset
by deducting it from any loan or payment due you under any Act of
Congress or program administered by any United States Government
Agency, or by other collection action.
(f) Interest will accrue at the rate not to exceed 1.25 percent
simple interest per calendar month, or any part thereof, on any
unpaid premium or administrative fee balance. For the purpose of
premium and administrative fee amounts due us, interest will begin
to accrue on the first day of the month following the premium
billing date specified in the Special Provisions.
(g) For the purpose of any other amounts due us, such as
repayment of indemnities found not to have been earned:
(1) Interest will start to accrue on the date that notice is
issued to you for the collection of the unearned amount;
(2) Amounts found due under this paragraph will not be charged
interest if payment is made in full within 30 days of issuance of
the notice by us;
(3) The amount will be considered delinquent if not paid within
30 days of the date the notice is issued by us;
(4) Penalties and interest will be charged in accordance with 31
U.S.C. 3717 and 4 CFR part 102; and
(5) The penalty for accounts more than 90 days delinquent is an
additional 6 percent per annum.
(h) Interest on any amount due us found to have been received by
you because of fraud, misrepresentation, or presentation by you of a
false claim will start on the date you received the amount with the
additional 6 percent penalty beginning on the 31st day after the
notice of amount due is issued to you. This interest is in addition
to any other amount found to be due under any other Federal criminal
or civil statute.
[[Page 30224]]
(i) If we determine that it is necessary to contract with a
collection agency, refer the debt to governmental collection
centers, the Department of Treasury Offset Program, or to employ an
attorney to assist in collection, you agree to pay all of the
expenses of collection.
(j) All amounts paid by you will be applied first to expenses of
collection if any, second to reduction of any penalties which may
have been assessed, then to reduction of accrued interest, and
finally, to reduction of the principal balance.
[Reinsured policy]
15. Restrictions, Limitations, and Amounts Due Us
(a) We may restrict the amount of acreage we will insure to the
amount allowed under any acreage limitation program established by
USDA.
(b) Violation of Federal statutes including, but not limited to,
the Act; the controlled substance provisions of the Food Security
Act of 1985; the Food, Agriculture, Conservation, and Trade Act of
1990; and the Omnibus Budget Reconciliation Act of 1993, and any
regulation promulgated thereunder, will result in cancellation,
termination, or voidance of your crop insurance contract. We will
recover any and all monies paid to you or received by you during
your period of ineligibility, and your premium will be refunded,
less a reasonable amount for expenses and handling not to exceed 20
percent of the premium paid or to be paid by you.
(c) Our maximum liability under this policy will be limited to
the policy protection specified in section 4 of this policy. Under
no circumstances will we be liable for the payment of damages
(compensatory, punitive, or other), attorney's fees, or other
charges in connection with any claim for indemnity, whether we
approve or disapprove such indemnity.
(d) Interest will accrue at the rate not to exceed 1.25 percent
simple interest per calendar month, or any part thereof, on any
unpaid premium or administrative fee balance. For the purpose of
premium and administrative fee amounts due us, interest will begin
to accrue on the first day of the month following the premium
billing date specified in the Special Provisions.
(e) For the purpose of any amounts due us, such as repayment of
indemnities found not to have been earned, interest will start to
accrue on the date that notice is issued to you for the collection
of the unearned amount. Amounts found due under this paragraph will
not be charged interest if payment in full is made within 30 days of
issuance of notice by us. The amount will be considered delinquent
if not paid in full within 30 days of the date the notice is issued
by us.
(f) All amounts paid will be applied first to expenses of
collection (see subsection (g) of this section) if any, second to
reduction of accrued interest, and then to reduction of the
principal balance.
(g) If we determine that it is necessary to contract with a
collection agency or to employ an attorney to assist in collection,
you agree to pay all of the expenses of collection.
(h) A portion of the amount paid to you to which you were not
entitled may be collected through administrative offset from
payments you receive from United States government agencies in
accordance with 31 U.S.C. chapter 37.
[FCIC policy]
16. Determinations
All determinations required by the policy will be made by us. If
you disagree with our determinations, you may obtain reconsideration
or you may appeal our determinations in accordance with 7 CFR part
11.
[Reinsured policy]
16. Determinations
(a) If you and we fail to agree on any factual determination,
the disagreement will be resolved in accordance with the rules of
the American Arbitration Association. Failure to agree with any
factual determination made by FCIC must be resolved through the FCIC
appeal provisions published at 7 CFR part 11.
(b) No award determined by arbitration or appeal can exceed the
amount of liability established or which should have been
established under this policy.
[Both policies]
17. Holidays and Weekends
If any date specified in this program falls on Saturday, Sunday,
or a legal Federal holiday, that date will be extended to the next
business day.
18. Life of Policy, Cancellation, and Termination
(a) This is a continuous policy and will remain in effect for
each crop year following the acceptance of the original application
until canceled by you in accordance with the terms of the policy or
terminated by operation of the terms of the policy or by us.
(b) Your application for insurance must contain all the
information required by us to insure the crop. Applications that do
not contain all social security numbers and employer identification
numbers, as applicable (except as stated herein), coverage level,
price election, crop, type, variety, or class, plan of insurance,
and any other material information required to insure the crop, are
not acceptable. If a person with a substantial beneficial interest
in the insured crop refuses to provide a social security number or
employer identification number, the amount of coverage available
under the policy will be reduced proportionately by that person's
share of the crop.
(c) After acceptance of the application, you may not cancel this
policy for the initial crop year. Thereafter, the policy will
continue in force for each succeeding crop year unless canceled or
terminated as provided below.
(d) Either you or we may cancel this policy after the initial
crop year by providing written notice to the other on or before the
cancellation date shown in the Crop Provisions.
(e) If any amount due, including premium, is not paid on or
before the termination date for the crop on which an amount is due:
(1) For a policy with the unpaid premium, the policy will
terminate effective on the termination date immediately subsequent
to the billing date for the crop year;
(2) For a policy with other amounts due, the policy will
terminate effective on the termination date immediately after the
account becomes delinquent;
(3) Ineligibility will be effective as of the date that the
policy was terminated for the crop for which you failed to pay an
amount owed and for all other insured crops with coincidental
termination dates;
(4) All other policies that are issued by us under the authority
of the Act will also terminate as of the next termination date
contained in the applicable policy;
(5) If you are ineligible, you may not obtain any crop insurance
under the Act until payment is made, you execute an agreement to
repay the debt and make the payments in accordance with the
agreement, or you file a petition to have your debts discharged in
bankruptcy;
(6) If you execute an agreement to repay the debt and fail to
timely make any scheduled payment, you will be ineligible for crop
insurance effective on the date the payment was due until the debt
is paid in full or you file a petition to discharge the debt in
bankruptcy and subsequently obtain discharge of the amounts due.
Dismissal of the bankruptcy petition before discharge will void all
policies in effect retroactive to the date you were originally
determined ineligible to participate;
(7) Once the policy is terminated, the policy cannot be
reinstated for the current crop year unless the termination was in
error;
(8) After you again become eligible for crop insurance, if you
want to obtain coverage for your crops, you must reapply on or
before the sales closing date for the crop (since applications for
crop insurance cannot be accepted after the sales closing date, if
you make any payment after the sales closing date, you cannot apply
for insurance until the next crop year); and
(9) If we deduct the amount due us from an indemnity, the date
of payment for the purpose of this section will be the date you sign
the properly executed claim for indemnity.
(10) For example, if crop A, with a termination date of October
31, 1997, and crop B, with a termination date of March 15, 1998, are
insured and you do not pay the premium for crop A by the termination
date, you are ineligible for crop insurance as of October 31, 1997,
and crop A's policy is terminated on that date. Crop B's policy is
terminated as of March 15, 1998. If you enter an agreement to repay
the debt on April 25, 1998, you can apply for insurance for crop A
by the October 31, 1998, sales closing date and crop B by the March
15, 1999, sales closing date. If you fail to make a scheduled
payment on November 1, 1998, you will be ineligible for crop
insurance effective on November 1, 1998, and you will not be
eligible unless the debt is paid in full or you file a petition to
have the debt discharged in bankruptcy and subsequently receive
discharge.
(f) If you die, disappear, or are judicially declared
incompetent, or if you are an entity other than an individual and
such entity is dissolved, the policy will terminate as of the
[[Page 30225]]
date of death, judicial declaration, or dissolution. If such event
occurs after coverage begins for any crop year, the policy will
continue in force through the crop year and terminate at the end of
the insurance period and any indemnity will be paid to the person or
persons determined to be beneficially entitled to the indemnity. The
premium will be deducted from the indemnity or collected from the
estate. Death of a partner in a partnership will dissolve the
partnership unless the partnership agreement provides otherwise. If
two or more persons having a joint interest are insured jointly,
death of one of the persons will dissolve the joint entity.
(g) We may terminate your policy if no premium is earned for 3
consecutive years.
(h) The cancellation and termination dates are contained in the
Crop Provisions.
19. Contract Changes
(a) We may change any terms and conditions of this policy from
year to year.
(b) Any changes in policy provisions, expected county yields,
maximum amounts of protection, premium rates, and program dates will
be provided by us to your local crop insurance provider not later
than the contract change date contained in the Crop Provisions. You
may view the documents or request copies from your local crop
insurance provider.
(c) You will be notified, in writing, of changes to the Basic
Provisions, Crop Provisions, and Special Provisions of this policy
not later than 30 days prior to the cancellation date for the
insured crop. Acceptance of changes will be conclusively presumed in
the absence of notice from you to change or cancel your insurance
coverage.
20. Eligibility for Other Farm Program Benefits
To remain eligible for benefits under the Agriculture Marketing
Transition Act, the conservation reserve program, or certain farm
loans, you are required to obtain at least the catastrophic level of
coverage for either GRP or any other plan of insurance that is
available in the county, for all crops of economic significance, or
execute a waiver of your rights to any emergency crop assistance on
or before the sales closing date for the crop.
An Example To Demonstrate How GRP Works
Producer A buys 90 percent coverage and selects $160 protection
per acre. Producer B buys 75 percent coverage and selects $185
protection per acre. Both producers have 100 percent share and both
plant 200 acres of a crop in the county. The expected county yield
is 45 bushels per acre. The premium rate for 90 percent coverage is
$6.14 per hundred dollars of protection and the premium rate for 75
percent coverage is $3.30 per hundred dollars of protection. The
maximum subsidy amount per acre is $3.07 and the limited subsidy
amount is $2.21 per acre.
A's trigger yield is 40.5 bushels per acre (90% x 45), and the
total premium due is $1,965 ($160 x $6.14 x 200 acres x 0.01).
Of that amount, FCIC pays $614 (200 acres x the maximum subsidy of
$3.07 per acre). A's policy protection is $32,000 ($160 x 200
acres).
B's trigger yield is 33.8 bushels per acre (75% of 45), and the
total premium due is $1,221 ($185 x $3.30 x 200 acres x 0.01).
Of that amount, FCIC pays $442 (200 acres x the limited subsidy
amount of $2.21 per acre). B's policy protection is $37,000 ( $185
x 200 acres).
Scenario 1 (likely)
FCIC issues a payment yield of 46 bushels per acre. This is
above both producers' trigger yields, so no indemnity payment is
made, even if one or both have individual yields that are below the
trigger yield.
Scenario 2 (less likely)
FCIC issues a payment yield of 38 bushels per acre. A's payment
calculation factor is 0.062 ((40.5-38)40.5). This number
multiplied by the policy protection yields an indemnity payment of
$1,984 (.062 x $32,000). B's trigger yield is less than the
payment yield, so no indemnity payment is made.
Scenario 3 (least likely)
FCIC issues a payment yield of 22 bushels per acre. A's payment
calculation factor is 0.457 ((40.5-22)40.5). The payment is
$14,624 (0.457 x $32,000). B's payment calculation factor is 0.349
((33.8-22) 33.8), and the final indemnity payment is $12,913
(0.349 x $37,000).
Sec. 407.10 Group risk plan for barley.
The provisions of the Group Risk Plan for Barley for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the barley for grain.
NASS yield. The yield calculated by dividing the NASS estimate
of the barley production in the county, by the NASS estimate of the
acres of barley in the county, as specified in the actuarial
documents. The actuarial documents will specify whether harvested or
planted acreage is used to calculate the yield used to establish the
expected county yield and calculate indemnities.
Planted acreage. Land in which the barley seed has been placed
by a machine appropriate for the insured crop and planting method,
at the correct depth, into a seedbed that has been properly prepared
for the planting method and production practice. Land on which seed
is initially spread onto the soil surface by any method and which
subsequently is mechanically incorporated into the soil in a timely
manner and at the proper depth, will also be considered planted.
2. Crop Insured
The insured crop will be all barley:
(a) Grown on insurable acreage in the county or counties listed
in the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested as grain; and
(d) Not planted into an established grass or legume,
interplanted with another crop, or planted as a nurse crop, unless
seeded at the normal rate and intended for harvest as grain.
3. Payment
(a) A payment will be made only if the payment yield for the
insured crop year is less than your trigger yield.
(b) Payment yields will be determined prior to the April 1
following the crop year.
(c) We will issue any payment to you prior to the May 1
immediately following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice
and type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS
yield may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Kit Carson, Lincoln, Elbert, El Paso, September 30......................... June 30.
Pueblo, Las Animas Counties, Colorado and
all Colorado Counties south and east
thereof; all New Mexico counties except
Taos County; Kansas; Missouri; Illinois;
Indiana; Ohio; Pennsylvania; New York;
Massachusetts; and all states south and
east thereof.
Arizona; California; and Clark and Nye October 31........................... June 30.
Counties, Nevada.
All Colorado counties except Kit Carson, March 15............................. November 30.
Lincoln, Elbert, El Paso, Pueblo, and Las
Animas Counties and all Colorado counties
south and east thereof; all Nevada
counties except Clark and Nye Counties;
Taos County, New Mexico; and all other
states except: Arizona, California, and
(except) Kansas, Missouri, Illinois,
Indiana, Ohio, Pennsylvania, New York,
and Massachusetts and all States south
and east thereof.
----------------------------------------------------------------------------------------------------------------
[[Page 30226]]
Sec. 407.11 Group risk plan for corn.
The provisions of the Group Risk Plan for Corn for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or picking corn for grain, or severing the
stalk from the land and chopping the stalk and ear for the purpose
of livestock feed.
NASS yield. The yield calculated by dividing the NASS estimate
of the corn for grain production in the county, by the NASS estimate
of the acres of corn for grain in the county, as specified in the
actuarial documents. The actuarial documents will specify whether
harvested or planted acreage is used to calculate the yield used to
establish the expected county yield and calculate indemnities.
Planted acreage. Land in which the corn seed has been placed by
a machine appropriate for the insured crop and planting method, at
the correct depth, into a seedbed that has been properly prepared
for the planting method and production practice. Broadcast and
subsequent mechanical incorporation of the corn seed is not allowed.
2. Crop Insured
(a) The insured crop will be all field corn:
(1) Grown on insurable acreage in the county listed in the
accepted application;
(2) Properly planted and reported by the acreage reporting date;
(3) Planted with the intent to be harvested as grain, silage, or
green chop; and
(4) Not planted into an established grass or legume or
interplanted with another crop.
(b) Hybrid seed corn, popcorn, sweet corn, and other specialty
corn may only be insured if a written agreement exists between you
and us. Your request to insure such crop must be in writing and
submitted to your agent not later than the sales closing date.
3. Payment
(a) A payment will be made only if the payment yield for the
insured crop year is less than your trigger yield.
(b) Payment yields will be determined prior to April 16
following the crop year.
(c) We will issue any payment to you prior to the May 16
immediately following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice
and type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS
yield may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, January 15........................... November 30.
Wilson, Karnes, Goliad, Victoria, and
Jackson Counties, Texas, and all Texas
counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, February 15.......................... November 30.
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, and Cooke
Counties, Texas, and all Texas Counties
lying south and east thereof to and
including Terrell, Crockett, Sutton,
Kimble, Gillespie, Blanco, Comal,
Guadalupe, Gonzales, De Witt, Lavaca,
Colorado, Wharton, and Matagorda
Counties, Texas.
Alabama; Arizona; Arkansas; California; February 28.......................... November 30.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; South Carolina.
All other Texas counties and all other March 15............................. November 30.
states.
----------------------------------------------------------------------------------------------------------------
Sec. 407.12 Group risk plan for cotton.
The provisions of the Group Risk Plan for Cotton for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Removal of the seed cotton from the stalk.
NASS yield. The yield calculated by dividing the NASS estimate
of upland cotton production in the county, by the NASS estimate of
the acres of upland cotton in the county, as specified in the
actuarial documents. The actuarial documents will specify whether
harvested or planted acreage is used to calculate the yield used to
establish the expected county yield and calculate indemnities.
Planted acreage. Land in which the cotton seed has been placed
by a machine appropriate for the insured crop and planting method,
at the correct depth, into a seedbed that has been properly prepared
for the planting method and production practice. Broadcast and
subsequent mechanical incorporation of the cotton seed is not
allowed.
2. Crop Insured
The insured crop will be all upland cotton:
(a) Grown on insurable acreage in the county or counties listed
in the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested; and
(d) That is not (unless allowed by the Special Provisions or by
written agreement):
(1) Colored cotton lint;
(2) Planted into an established grass or legume;
(3) Interplanted with another spring planted crop;
(4) Grown on acreage in which a hay crop was harvested in the
same calendar year unless the acreage is irrigated; or
(5) Grown on acreage on which a small grain crop reached the
heading stage in the same calendar year unless the acreage is
irrigated or adequate measures are taken to terminate the small
grain crop prior to heading and less than 50 percent of the small
grain plants reach the heading stage.
3. Payment.
(a) A payment will be made only if the payment yield for the
insured crop year is less than your trigger yield.
(b) Payment yields will be determined prior to July 16 following
the crop year.
(c) We will issue any payment to you prior to the August 16
immediately following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice
and type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS
yield may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, January 15........................... November 30.
Wilson, Karnes, Goliad, Victoria, and
Jackson Counties, Texas, and all Texas
counties lying south thereof.
Alabama; Arizona; Arkansas; California; February 28.......................... November 30.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; South Carolina;
El Paso, Hudspeth, Culberson, Reeves,
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, and Cooke
Counties, Texas, and all Texas counties
lying south and east thereof to and
including Terrell, Crockett, Sutton,
Kimble, Gillespie, Blanco, Comal,
Guadalupe, Gonzales, De Witt, Lavaca,
Colorado, Wharton, and Matagorda
Counties, Texas.
All other Texas counties and all other March 15............................. November 30.
States.
----------------------------------------------------------------------------------------------------------------
[[Page 30227]]
Sec. 407.13 Group risk plan for forage.
The provisions of the Group Risk Plan for Forage for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Removal of the forage from the field, and rotational
grazing.
NASS yield. The yield calculated by dividing the NASS estimate
of the production of hay in the county by the NASS estimate of the
acres of hay in the county, as specified in the actuarial documents.
The actuarial documents will specify whether the harvested or
planted acreage is used to calculate the yield used to establish the
expected county yield and calculate indemnities.
Planted acreage. Land seeded to forage, by a planting method
appropriate for forage, into a properly prepared seedbed.
Rotational grazing. The defoliation of the insured forage by
livestock, within a pasturing system whereby the forage field is
subdivided into smaller parcels and livestock are moved from one
area to another, allowing a period of grazing followed by a period
for forage regrowth.
2. Crop Insured
The insured crop will be the forage types shown on the Special
Provisions:
(a) Grown on insurable acreage in the county or counties listed
in the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Intended for harvest; and
(d) Not grown with another crop.
3. Insurable Acreage
In addition to section 3 of the Basic Provisions of the Group
Risk Plan Common Policy, acreage seeded to forage after July 1 of
the previous crop year will not be insurable. Acreage physically
located in another county not listed on the accepted application is
not insured under this policy.
4. Payment
(a) A payment will be made only if the payment yield for the
insured crop year is less than your trigger yield.
(b) Payment yields will be determined prior to May 1 following
the crop year.
(c) We will issue any payment to you prior to the May 31
immediately following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice
and type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS
yield may be subsequently revised.
5. Program Dates
November 30 is the Cancellation and Termination Date for all
states. The Contract Change Date is August 31 for all states.
6. Annual Premium
In lieu of section 8(g) of the Basic Provisions of the Group
Risk Plan Common Policy, the annual premium is earned and payable on
the acreage reporting date. You will be billed for premium due on
the date shown in the Special Provisions. The premium will be
determined based on the rate shown on the actuarial documents.
Sec. 407.14 Group risk plan for peanuts.
The provisions of the Group Risk Plan for Peanuts for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the peanuts.
NASS yield. The yield calculated by dividing the NASS estimate
of peanut production in the county, by the NASS estimate of the
acres of peanuts in the county, as specified in the actuarial
documents. The actuarial documents will specify whether the
harvested or planted acreage is used to calculate the yield used to
establish the expected county yield and calculate indemnities.
Planted acreage. Land in which the peanut seed has been placed
by a machine appropriate for the insured crop and planting method,
at the correct depth, into a seedbed that has been properly prepared
for the planting method and production practice.
2. Crop Insured
The insured crop will be all peanuts:
(a) Grown on insurable acreage in the county or counties listed
in the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested as peanuts; and
(d) Not interplanted with an established grass or legume or
interplanted with another crop.
3. Payment
(a) A payment will be made only if the payment yield for the
insured crop year is less than your trigger yield.
(b) Payment yields will be determined prior to June 16 following
the crop year.
(c) We will issue any payment to you prior to the July 16
immediately following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice
and type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS
yield may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak, January 15........................... November 30.
McMullen, La Salle, and Dimmit Counties,
Texas and all Texas Counties lying south
thereof.
El Paso, Hudspeth, Culberson, Reeves, February 28.......................... November 30.
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, Cooke
Counties, Texas, and all Texas counties
south and east thereof; and all other
states except New Mexico, Oklahoma, and
Virginia.
New Mexico; Oklahoma; Virginia; and all March 15............................. November 30.
other Texas Counties.
----------------------------------------------------------------------------------------------------------------
Sec. 407.15 Group risk plan for sorghum.
The provisions of the Group Risk Plan for Sorghum for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the sorghum for grain, or
severing the stalk from the land and chopping the stalk and head for
the purpose of livestock feed.
NASS yield. The yield calculated by dividing the NASS estimate
of sorghum for grain production in the county, by the NASS estimate
of the acres of sorghum for grain in the county, as specified in the
actuarial documents. The actuarial documents will specify whether
the harvested or planted acreage is used to calculate the yield used
to establish the expected county yield and calculate indemnities.
Planted acreage. Land in which the sorghum seed has been placed
by a machine appropriate for the insured crop and planting method,
at the correct depth, into a seedbed that has been properly prepared
for the planting method and production practice. Broadcast and
subsequent mechanical incorporation of the sorghum seed is not
allowed.
2. Crop Insured
(a) The insured crop will be all sorghum:
(1) Grown on insurable acreage in the county or counties listed
in the accepted application;
(2) Properly planted and reported by the acreage reporting date;
(3) Planted with the intent to be harvested as grain or silage;
and
(4) Not interplanted with an established grass or legume or
interplanted with another crop.
(b) Hybrid sorghum seed may only be insured if a written
agreement exists between you and us. Your request to insure such
crop must be in writing and submitted to your agent not later than
the sales closing date.
3. Payment
(a) A payment will be made only if the payment yield for the
insured crop year is less than your trigger yield.
[[Page 30228]]
(b) Payment yields will be determined prior to April 16
following the crop year.
(c) We will issue any payment to you prior to the May 16
immediately following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice
and type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS
yield may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, January 15........................... November 30.
Wilson, Karnes, Goliad, Victoria, and
Jackson Counties, Texas, and all Texas
counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, February 15.......................... November 30.
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, and Cooke
Counties, Texas, and all Texas counties
south and east thereof to and including
Terrell, Crockett, Sutton, Kimble,
Gillespie, Blanco, Comal, Guadalupe,
Gonzales, De Witt, Lavaca, Colorado,
Wharton, and Matagorda Counties, Texas.
Alabama; Arizona; Arkansas; California; February 28.......................... November 30.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; and South
Carolina.
All other Texas counties and all other March 15............................. November 30.
states.
----------------------------------------------------------------------------------------------------------------
Sec. 407.16 Group risk plan for soybean.
The provisions of the Group Risk Plan for Soybeans for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the soybeans.
NASS yield. The yield calculated by dividing the NASS estimate
of soybean production in the county, by the NASS estimate of the
acres of soybeans in the county, as specified in the actuarial
documents. The actuarial documents will specify whether the
harvested or planted acreage is used to calculate the yield used to
establish the expected county yield and calculate indemnities.
Planted acreage. Land in which the soybean seed has been placed
by a machine appropriate for the insured crop and planting method,
at the correct depth, into a seedbed that has been properly prepared
for the planting method and production practice. Land on which seed
is initially spread onto the soil surface by any method and which
subsequently is mechanically incorporated into the soil in a timely
manner and at the proper depth, will also be considered planted.
2. Crop Insured
The insured crop will be all soybeans:
(a) Grown on insurable acreage in the county or counties listed
in the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested as soybeans; and
(d) Not planted into an established grass or legume or
interplanted with another crop.
3. Payment
(a) A payment will be made only if the payment yield for the
insured crop year is less than your trigger yield.
(b) Payment yields will be determined prior to April 16
following the crop year.
(c) We will issue any payment to you prior to the May 16
immediately following our determination of the payment yield.
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice
and type specified on the actuarial documents.
(e) The payment will not be recalculated even though the NASS
yield may be subsequently revised.
4. Program Dates
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak, February 15.......................... November 30.
McMullen, La Salle, and Dimmit Counties,
Texas and all Texas counties lying south
thereof.
Alabama; Arizona; Arkansas; California; February 28.......................... November 30.
Florida; Georgia; Louisiana; Mississippi;
Nevada; North Carolina; South Carolina;
and El Paso, Hudspeth, Culberson, Reeves,
Loving, Winkler, Ector, Upton, Reagan,
Sterling, Coke, Tom Green, Concho,
McCulloch, San Saba, Mills, Hamilton,
Bosque, Johnson, Tarrant, Wise, and Cooke
Counties, Texas, and all Texas counties
lying south and east thereof to and
including Maverick, Zavala, Frio,
Atascosa, Karnes, De Witt, Lavaca,
Colorado, Wharton, and Matagorda
Counties, Texas.
All other Texas counties and all other March 15............................. November.
States.
----------------------------------------------------------------------------------------------------------------
November 30.
Sec. 407.17 Group risk plan for wheat.
The provisions of the Group Risk Plan for Wheat for the 2000 and
succeeding crop years are as follows:
1. Definitions
Harvest. Combining or threshing the wheat for grain.
NASS yield. The yield calculated by dividing the NASS estimate
of the wheat production in the county, by the NASS estimate of the
acres of wheat in the county, as specified in the actuarial
documents. The actuarial documents will specify whether the
harvested or planted acreage is used to calculate the yield used to
establish the expected county yield and calculate indemnities.
Planted acreage. Land in which the wheat seed has been planted
by a machine appropriate for the insured crop and planting method,
at the correct depth, into a seedbed that has been properly prepared
for the planting method and production practice. Land on which seed
is initially spread onto the soil surface by any method and which
subsequently is mechanically incorporated into the soil in a timely
manner and at the proper depth, will also be considered planted.
2. Crop Insured
The insured crop will be all wheat:
(a) Grown on insurable acreage in the county or counties listed
in the accepted application;
(b) Properly planted and reported by the acreage reporting date;
(c) Planted with the intent to be harvested as grain; and
(d) Not planted into an established grass or legume,
interplanted with another crop, or planted as a nurse crop, unless
seeded at the normal rate and intended for harvest as grain.
3. Payment
(a) A payment will be made only if the payment yield for the
insured crop year is less than your trigger yield.
(b) Payment yields will be determined prior to April 1 following
the crop year.
(c) We will issue any payment to you prior to the May 1
immediately following our determination of the payment yield.
[[Page 30229]]
(d) The payment is equal to the payment calculation factor
multiplied by your policy protection for each insured crop practice
and type specified in the actuarial documents.
(e) The payment will not be recalculated even though the NASS
yield may be subsequently revised.
----------------------------------------------------------------------------------------------------------------
State and county Cancellation and termination dates Contract change date
----------------------------------------------------------------------------------------------------------------
All Colorado counties except Alamosa, September 30......................... June 30.
Conejos, Costilla, Rio Grande, and
Saguache; all Montana counties except
Daniels and Sheridan Counties; all South
Dakota counties except Corson, Walworth,
Edmonds, Faulk, Spink, Beadle, Kingsbury,
Miner, McCook, Turner, and Yankton
Counties and all South Dakota counties
east thereof; all Wyoming counties except
Big Horn, Fremont, Hot Springs, Park, and
Washakie Counties; and all other states
except Alaska, Arizona, California,
Maine, Minnesota, Nevada, New Hampshire,
North Dakota, Utah, and Vermont..
Arizona; California; Nevada; and Utah..... October 31........................... June 30.
Alaska; Alamosa, Conejos, Costilla, Rio March 15............................. November 30.
Grande, and Saguache Counties, Colorado;
Maine; Minnesota; Daniels and Sheridan
Counties, Montana; New Hampshire; North
Dakota; Corson, Walworth, Edmunds, Faulk,
Spink, Beadle, Kingsbury, Miner, McCook,
Turner, and Yankton Counties South
Dakota, and all South Dakota counties
east thereof; Vermont; and Big Horn,
Fremont, Hot Springs, Park, and Washakie
Counties, Wyoming..
----------------------------------------------------------------------------------------------------------------
Signed in Washington, DC, on May 26, 1999.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 99-13983 Filed 6-4-99; 8:45 am]
BILLING CODE 3410-08-P
