Crop insurance
Authority to offer insurance
In general
Period
Exclusion of losses due to certain actions of producer
Exclusions
Insurance provided under this subsection shall not cover losses due to—
the neglect or malfeasance of the producer;
the failure of the producer to reseed to the same crop in such areas and under such circumstances as it is customary to reseed; or
the failure of the producer to follow good farming practices, including scientifically sound sustainable and organic farming practices.
Good farming practices determination review
Informal administrative process
Administrative review
No adverse decision
Reversal or modification
Judicial review
Right to review
Reversal or modification
Limitation on revenue coverage for potatoes
Expansion to other areas or single producers
Area expansion
Producer expansion
Dissemination of crop insurance information
Available information
The Corporation shall make available to producers through local offices of the Department—
current and complete information on all aspects of Federal crop insurance; and
a listing of insurance agents and companies offering to sell crop insurance in the area of the producers.
Use of electronic methods
Dissemination by Corporation
Submission to Corporation
Addition of new and specialty crops (including value-added crops)
Annual review
Not later than 1 year after
Research and development for a policy or plan of insurance for a commodity for which there is no existing policy or plan of insurance.
Expansion of an existing policy or plan of insurance to additional counties or States, including malting barley endorsements or contract options.
Research and development for a new policy or plan of insurance, or endorsement, for commodities with existing policies or plans of insurance, such as dollar plans.
Report
Adequate coverage for States and underserved producers
Definitions
In this paragraph:
Adequately served
Underserved producer
The term “underserved producer” means an individual (including a member of an Indian Tribe) that is—
a beginning farmer or rancher;
a veteran farmer or rancher; or
a socially disadvantaged farmer or rancher.
Review
Report
In general
Recommendations
Special provisions for cotton and rice
Premium adjustments
Prohibition
Exceptions
Subparagraph (A) does not apply with respect to—
a payment authorized under subsection (b)(5)(B);
a performance-based discount authorized under subsection (d)(3); or
a patronage dividend, or similar payment, that is paid—
by an entity that was approved by the Corporation to make such payments for the 2005, 2006, or 2007 reinsurance year, in accordance with subsection (b)(5)(B) as in effect on the day before the date of enactment of this paragraph; and
in a manner consistent with the payment plan approved in accordance with that subsection for the entity by the Corporation for the applicable reinsurance year.
Publication of violations
Publication required
Protection of privacy
Commissions
Definition of immediate family
Prohibition
No individual (including a subagent) may receive directly, or indirectly through an entity, any compensation (including any commission, profit sharing, bonus, or any other direct or indirect benefit) for the sale or service of a policy or plan of insurance offered under this subchapter if—
the individual has a substantial beneficial interest, or a member of the individual’s immediate family has a substantial beneficial interest, in the policy or plan of insurance; and
the total compensation to be paid to the individual with respect to the sale or service of the policies or plans of insurance that meet the condition described in clause (i) exceeds 30 percent or the percentage specified in State law, whichever is less, of the total of all compensation received directly or indirectly by the individual for the sale or service of all policies and plans of insurance offered under this subchapter for the reinsurance year.
Reporting
Sanctions
Applicability
In general
Prohibition
Cover crops
In general
Termination
In general
The termination of a cover crop shall be carried out according to—
guidelines established by the Secretary; or
an exception to the guidelines approved under clause (ii).
Exception to guidelines
The Corporation shall approve an exception to the guidelines under clause (i)(I) if that exception is recommended by—
the Natural Resources Conservation Service; or
an agricultural expert, as determined by the Corporation, unless the exception is determined to be unreasonable by the Corporation.
Insurability of subsequent crop
Summer fallow
Catastrophic risk protection
Coverage availability
Amount of coverage
In general
Subject to subparagraph (B)—
in the case of each of the 1995 through 1998 crop years, catastrophic risk protection shall offer a producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 60 percent of the expected market price, or a comparable coverage (as determined by the Corporation); and
in the case of each of the 1999 and subsequent crop years, catastrophic risk protection shall offer a producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 55 percent of the expected market price, or a comparable coverage (as determined by the Corporation).
Reduction in actual payment
Alternative catastrophic coverage
Beginning with the 2001 crop year, the Corporation shall offer producers of an agricultural commodity the option of selecting either of the following:
The catastrophic risk protection coverage available under paragraph (2)(A).
An alternative catastrophic risk protection coverage that—
indemnifies the producer on an area yield and loss basis if such a policy or plan of insurance is offered for the agricultural commodity in the county in which the farm is located;
provides, on a uniform national basis, a higher combination of yield and price protection than the coverage available under paragraph (2)(A); and
the Corporation determines is comparable to the coverage available under paragraph (2)(A) for purposes of subsection (e)(2)(A).
Sale of catastrophic risk coverage
In general
Catastrophic risk coverage may be offered by—
approved insurance providers, if available in an area; and
at the option of the Secretary that is based on considerations of need, local offices of the Department.
Need
Delivery of coverage
In general
Coverage by approved insurance providers
Timing of determinations
Current policies
Administrative fee
Basic fee
Payment of catastrophic risk protection fee on behalf of producers
Payment authorized
Selection of provider
Delivery of insurance
Additional coverage encouraged
Time for payment
Use of fees
In general
Limitation
Waiver of fee
In general
Coordination
Participation requirement
Limitation due to risk
Transitional coverage for 1995 crops
Simplification
Catastrophic risk protection plans
Other plans
Loss adjustment
General coverage levels
Additional coverage generally
In general
Purchase
Transfer of relevant information
Yield and loss basis options
A producer shall have the option of purchasing additional coverage based on—
an individual yield and loss basis; or
an area yield and loss basis;
an individual yield and loss basis, supplemented with coverage based on an area yield and loss basis to cover a part of the deductible under the individual yield and loss policy, as described in paragraph (4)(C); or
a margin basis alone or in combination with the coverages available under subparagraph (A) or (B).
Level of coverage
Dollar denomination and percentage of yield
Except as provided in subparagraph (C), the level of coverage—
shall be dollar denominated; and
may be purchased at any level not to exceed—
in the case of the individual yield or revenue coverage, 85 percent;
in the case of individual yield or revenue coverage aggregated across multiple commodities, 90 percent; and
in the case of area yield or revenue coverage (as determined by the Corporation), 95 percent.
Information
Supplemental coverage option
In general
Notwithstanding subparagraph (A), in the case of the supplemental coverage option described in paragraph (3)(B), the Corporation shall offer producers the opportunity to purchase coverage in combination with a policy or plan of insurance offered under this subchapter that would allow indemnities to be paid to a producer equal to a part of the deductible under the policy or plan of insurance—
at a county-wide level to the fullest extent practicable; or
in counties that lack sufficient data, on the basis of such larger geographical area as the Corporation determines to provide sufficient data for purposes of providing the coverage.
Trigger
Coverage
Subject to the trigger described in clause (ii), coverage offered under paragraph (3)(B) and clause (i) shall not exceed the difference between—
90 percent; and
the coverage level selected by the producer for the underlying policy or plan of insurance.
Ineligible crops and acres
Calculation of premium
Notwithstanding subsection (d), the premium for coverage offered under paragraph (3)(B) and clause (i) shall—
be sufficient to cover anticipated losses and a reasonable reserve; and
include an amount for operating and administrative expenses established in accordance with subsection (k)(4)(F).
Expected market price
Establishment or approval
General rule
Other authorized approaches
The expected market price of an agricultural commodity—
may be based on the actual market price of the agricultural commodity at the time of harvest, as determined by the Corporation;
in the case of revenue and other similar plans of insurance, may be the actual market price of the agricultural commodity, as determined by the Corporation;
in the case of cost of production or similar plans of insurance, shall be the projected cost of producing the agricultural commodity, as determined by the Corporation; or
in the case of other plans of insurance, may be an appropriate amount, as determined by the Corporation.
Grain sorghum price election
In general
The Corporation, in conjunction with the Secretary (referred to in this subparagraph as the “Corporation”), shall—
not later than 60 days after the date of enactment of this subparagraph, make available all methods and data, including data from the Economic Research Service, used by the Corporation to develop the expected market prices for grain sorghum under the production and revenue-based plans of insurance of the Corporation; and
request applicable data from the grain sorghum industry.
Expert reviewers
In general
Requirements
The expert reviewers under subclause (I) shall be comprised of agricultural economists with experience in grain sorghum and corn markets, of whom—
2 shall be agricultural economists of institutions of higher education;
2 shall be economists from within the Department; and
1 shall be an economist nominated by the grain sorghum industry.
Recommendations
In general
Consideration
Publication
Appropriate pricing methodology
In general
Interim methodology
Availability
Price elections
In general
Minimum price elections
Wheat classes and malting barley
Organic crops
In general
Annual report
The Corporation shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate an annual report on progress made in developing and improving Federal crop insurance for organic crops, including—
the numbers and varieties of organic crops insured;
the progress of implementing the price elections required under this subparagraph, including the rate at which additional price elections are adopted for organic crops;
the development of new insurance approaches relevant to organic producers; and
any recommendations the Corporation considers appropriate to improve Federal crop insurance coverage for organic crops.
Fire and hail coverage
State premium subsidies
Limitations on additional coverage
Administrative fee
Fee required
Use of fees; waiver
Time for payment
Premiums
Premiums required
The Corporation shall fix adequate premiums for all the plans of insurance of the Corporation at such rates as the Board determines are actuarially sufficient to attain an expected loss ratio of not greater than—
1.1 through
1.075 for the period beginning
1.0 on and after the date of enactment of that Act.
Premium amounts
The premium amounts for catastrophic risk protection under subsection (b) and additional coverage under subsection (c) shall be fixed as follows:
In the case of catastrophic risk protection, the amount of the premium established by the Corporation for each crop for which catastrophic risk protection is available shall be reduced by the percentage equal to the difference between the average loss ratio for the crop and 100 percent, plus a reasonable reserve, as determined by the Corporation.
In the case of additional coverage equal to or greater than 50 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount of the premium shall—
be sufficient to cover anticipated losses and a reasonable reserve; and
include an amount for operating and administrative expenses, as determined by the Corporation, on an industry-wide basis as a percentage of the amount of the premium used to define loss ratio.
Performance-based discount
Billing date for premiums
Payment of portion of premium by Corporation
In general
Amount of payment
Subject to paragraphs (3), (6), and (7), the amount of the premium to be paid by the Corporation shall be as follows:
In the case of catastrophic risk protection, the amount shall be equivalent to the premium established for catastrophic risk protection under subsection (d)(2)(A).
In the case of additional coverage equal to or greater than 50 percent, but less than 55 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
67 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of additional coverage equal to or greater than 55 percent, but less than 65 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
69 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of additional coverage equal to or greater than 65 percent, but less than 75 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
64 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of additional coverage equal to or greater than 75 percent, but less than 80 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
60 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of additional coverage equal to or greater than 80 percent, but less than 85 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
51 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
Subject to subsection (c)(4), in the case of additional coverage equal to or greater than 85 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—
41 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of the supplemental coverage option authorized in subsection (c)(4)(C), the amount shall be equal to the sum of—
80 percent of the additional premium associated with the coverage; and
the amount determined under subsection (c)(4)(C)(v)(II), subject to subsection (k)(4)(F), for the coverage to cover operating and administrative expenses.
Prohibition on continuous coverage
Premium payment disclosure
Enterprise and whole farm units
In general
Amount
Limitation
Nonirrigated crops
Enterprise units across county lines
The Corporation may allow a producer to establish a single enterprise unit by combining an enterprise unit with—
1 or more other enterprise units in 1 or more other counties; or
all basic units and all optional units in 1 or more other counties.
Premium subsidy for area revenue plans
Subject to paragraph (4), in the case of a policy or plan of insurance that covers losses due to a reduction in revenue in an area, the amount of the premium paid by the Corporation shall be as follows:
In the case of additional area coverage equal to or greater than 70 percent, but less than 75 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of additional area coverage equal to or greater than 75 percent, but less than 85 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of additional area coverage equal to or greater than 85 percent, but less than 90 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
49 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of additional area coverage equal to or greater than 90 percent of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
44 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
Premium subsidy for area yield plans
Subject to paragraph (4), in the case of a policy or plan of insurance that covers losses due to a loss of yield or prevented planting in an area, the amount of the premium paid by the Corporation shall be as follows:
In the case of additional area coverage equal to or greater than 70 percent, but less than 80 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of additional area coverage equal to or greater than 80 percent, but less than 90 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of—
55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
In the case of additional area coverage equal to or greater than 90 percent,1
51 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
Premium for beginning and veteran farmers or ranchers
Additional support
In general
Percentage points adjustments
The percentage points referred to in subparagraph (A) are the following:
For each of the first and second reinsurance years that a beginning farmer or rancher participates as a beginning farmer or rancher in the applicable policy or plan of insurance, 5 percentage points.
For the third reinsurance year that a beginning farmer or rancher participates as a beginning farmer or rancher in the applicable policy or plan of insurance, 3 percentage points.
For the fourth reinsurance year that a beginning farmer or rancher participates as a beginning farmer or rancher in the applicable policy or plan of insurance, 1 percentage point.
Eligibility
In general
Sales closing date
In general
Established dates
Exception
Records and reporting
To obtain catastrophic risk protection under subsection (b) or additional coverage under subsection (c), a producer shall—
provide annually records acceptable to the Secretary regarding crop acreage, acreage yields, and production for each agricultural commodity insured under this subchapter or accept a yield determined by the Corporation; and
report acreage planted and prevented from planting by the designated acreage reporting date for the crop and location as established by the Corporation.
Yield determinations
In general
Yield coverage plans
Actual production history
Assigned yield
If the producer does not provide satisfactory evidence of the yield of a commodity under subparagraph (A), the producer shall be assigned—
a yield that is not less than 65 percent of the transitional yield of the producer (adjusted to reflect actual production reflected in the records acceptable to the Corporation for continuous years), as specified in regulations issued by the Corporation based on production history requirements;
a yield determined by the Corporation, in the case of—
a producer that has not had a share of the production of the insured crop for more than two crop years, as determined by the Secretary;
a producer that produces an agricultural commodity on land that has not been farmed by the producer; or
a producer that rotates a crop produced on a farm to a crop that has not been produced on the farm; or
if the producer is a beginning farmer or rancher or veteran farmer or rancher who was previously involved in a farming or ranching operation, including involvement in the decisionmaking or physical involvement in the production of the crop or livestock on the farm, for any acreage obtained by the beginning farmer or rancher or veteran farmer or rancher, a yield that is the higher of—
the actual production history of the previous producer of the crop or livestock on the acreage determined under subparagraph (A); or
a yield of the producer, as determined in clause (i).
Area yield
Commodity-by-commodity basis
Sources of yield data
To determine yields under this paragraph, the Corporation—
shall use county data collected by the Risk Management Agency, the National Agricultural Statistics Service, or both; or
if sufficient county data is not available, may use other data considered appropriate by the Secretary.
Transitional yields for producers of feed or forage
In general
If a producer does not provide satisfactory evidence of a yield under paragraph (2)(A), the producer shall be assigned a yield that is at least 80 percent of the transitional yield established by the Corporation (adjusted to reflect the actual production history of the producer) if the Secretary determines that—
the producer grows feed or forage primarily for on-farm use in a livestock, dairy, or poultry operation; and
over 50 percent of the net farm income of the producer is derived from the operation.
Yield calculation
The Corporation shall—
for the first year of participation of a producer, provide the assigned yield under this paragraph to the producer of feed or forage; and
for the second year of participation of the producer, apply the actual production history or assigned yield requirement, as provided in this subsection.
Termination of authority
Adjustment in actual production history to establish insurable yields
Application
Election to use percentage of transitional yield
If, for one or more of the crop years used to establish the producer’s actual production history of an agricultural commodity, the producer’s recorded or appraised yield of the commodity was less than 60 percent of the applicable transitional yield, as determined by the Corporation, the Corporation shall, at the election of the producer—
exclude any of such recorded or appraised yield; and
replace each excluded yield with a yield equal to 60 percent of the applicable transitional yield; or
in the case of beginning farmers or ranchers and veteran farmers or ranchers, replace each excluded yield with a yield equal to 80 percent of the applicable transitional yield.
Election to exclude certain history
In general
Contiguous counties
Irrigation practice
Premium adjustment
Adjustment to reflect increased yields from successful pest control efforts
Situations justifying adjustment
The Corporation shall develop a methodology for adjusting the actual production history of a producer when each of the following apply:
The producer’s farm is located in an area where systematic, area-wide efforts have been undertaken using certain operations or measures, or the producer’s farm is a location at which certain operations or measures have been undertaken, to detect, eradicate, suppress, or control, or at least to prevent or retard the spread of, a plant disease or plant pest, including a plant pest (as defined in section 7759 2
The presence of the plant disease or plant pest has been found to adversely affect the yield of the agricultural commodity for which the producer is applying for insurance.
The efforts described in clause (i) have been effective.
Adjustment amount
Continued authority
In general
The Corporation shall establish—
underwriting rules that limit the decrease in the actual production history of a producer, at the election of the producer, to not more than 10 percent of the actual production history of the previous crop year provided that the production decline was the result of drought, flood, natural disaster, or other insurable loss (as determined by the Corporation); and
actuarially sound premiums to cover additional risk.
Other authority
Effect
Submission of policies and materials to Board
Authority to submit
In general
In addition to any standard forms or policies that the Board may require be made available to producers under subsection (c), a person (including an approved insurance provider, a college or university, a cooperative or trade association, or any other person) may prepare for submission or propose to the Board—
other crop insurance policies and provisions of policies; and
rates of premiums for multiple peril crop insurance pertaining to wheat, soybeans, field corn, and any other crops determined by the Secretary.
Review and submission by Corporation
In general
The Corporation shall review any policy developed under section 1522(c) of this title or any pilot program developed under section 1523 of this title and submit the policy or program to the Board under this subsection if the Corporation, at the sole discretion of the Corporation, finds that the policy or program—
subject to clause (ii), will likely result in a viable and marketable policy consistent with this subsection;
would provide crop insurance coverage in a significantly improved form; and
adequately protects the interests of producers.
Waiver for hemp
Submission of policies
Review and approval by the Board
In general
A policy, plan of insurance, or other material submitted to the Board under this subsection shall be reviewed by the Board and shall be approved by the Board for reinsurance and for sale by approved insurance providers to producers at actuarially appropriate rates and under appropriate terms and conditions if the Board determines that—
the interests of producers are adequately protected;
the proposed policy or plan of insurance will—
provide a new kind of coverage that is likely to be viable and marketable;
provide crop insurance coverage in a manner that addresses a clear and identifiable flaw or problem in an existing policy; or
provide a new kind of coverage for a commodity that previously had no available crop insurance, or has demonstrated a low level of participation or coverage level under existing coverage; and
the proposed policy or plan of insurance will not have a significant adverse impact on the crop insurance delivery system.
Consideration
In approving policies or plans of insurance, the Board shall in a timely manner—
first, consider policies or plans of insurance that address underserved commodities, including commodities for which there is no insurance;
second, consider existing policies or plans of insurance for which there is inadequate coverage or there exists low levels of participation; and
last, consider all policies or plans of insurance submitted to the Board that do not meet the criteria described in clause (i) or (ii).
Specified review and approval priorities
In reviewing policies and other materials submitted to the Board under this subsection for approval, the Board—
shall make the development and approval of a revenue policy for peanut producers a priority so that a revenue policy is available to peanut producers in time for the 2015 crop year;
shall make the development and approval of a margin coverage policy for rice producers a priority so that a margin coverage policy is available to rice producers in time for the 2015 crop year;
may approve a submission that is made pursuant to this subsection that would, beginning with the 2015 crop year, allow producers that purchase policies in accordance with subsection (e)(5)(A) to separate enterprise units by risk rating for acreage of crops in counties; and
in the case of reviewing policies and other materials relating to the production of hemp, may waive the viability and marketability requirement under subparagraph (A)(ii)(I).
Guidelines for submission and review
The Corporation shall issue regulations to establish guidelines for the submission, and Board review, of policies or other material submitted to the Board under this subsection. At a minimum, the guidelines shall ensure the following:
Confidentiality
In general
Standard of confidentiality
Application
Personal presentation
Notification of intent to disapprove
Time period
Modification of application
Authority
Time period
Explanation
Determination to approve or disapprove policies or materials
Time period
Explanation
Failure to meet deadline
Consultation
Requirement
Submission to the Board
Evaluation by the Board
Premium schedule
Payment by Corporation
In the case of a policy or plan of insurance developed and approved under this subsection or section 1522 of this title, or conducted under section 1523 of this title (other than a policy or plan of insurance applicable to livestock), the Corporation shall pay a portion of the premium of the policy or plan of insurance that is equal to—
the percentage, specified in subsection (e) for a similar level of coverage, of the total amount of the premium used to define loss ratio; and
an amount for administrative and operating expenses determined in accordance with subsection (k)(4).
Transitional schedule
Additional prevented planting policy coverage
In general
Approved insurance providers
Timing of loss
A crop loss shall be covered by the additional prevented planting coverage if—
crop insurance policies were obtained for—
the crop year the loss was experienced; and
the crop year immediately preceding the year of the prevented planting loss; and
the cause of the loss occurred—
after the sales closing date for the crop in the crop year immediately preceding the loss; and
before the sales closing date for the crop in the year in which the loss is experienced.
Adoption of rates and coverages
In general
Review of rating methodologies
Analysis of rating and loss history
Premium adjustment
Claims for losses
In general
Denial of claims
In general
Statute of limitations
Indemnification
Marketing windows
Settlement of claims on farm-stored production
Reinsurance
In general
Terms and conditions
Share of risk
Rate
In general
Except as otherwise provided in this paragraph, the rate established by the Board to reimburse approved insurance providers and agents for the administrative and operating costs of the providers and agents shall not exceed—
for the 1998 reinsurance year, 27 percent of the premium used to define loss ratio; and
for each of the 1999 and subsequent reinsurance years, 24.5 percent of the premium used to define loss ratio.
Proportional reductions
Other reductions
Time for reimbursement
Reimbursement rate reduction
Reimbursement rate for area policies and plans of insurance
Cost and regulatory reduction
Agency discretion
Plan
Renegotiation of standard reinsurance agreement
In general
Except as provided in subparagraph (B), notwithstanding section 536 of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 1506 note; Public Law 105–185) and section 148 of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1506 note; Public Law 106–224), the Corporation may renegotiate the financial terms and conditions of each Standard Reinsurance Agreement—
to be effective for the 2011 reinsurance year beginning
once during each period of 5 reinsurance years thereafter.
Exceptions
Adverse circumstances
Effect of Federal law changes
Notification requirement
Consultation
2011 reinsurance year
In general
Alternative methods
Alternatives considered under clause (i) shall include—
methods that—
are graduated and base reimbursement rates in a State on changes in premiums in that State;
are graduated and base reimbursement rates in a State on the loss ratio for crop insurance for that State; and
are graduated and base reimbursement rates on individual policies on the level of total premium for each policy; and
any other method that takes into account current financial conditions of the program and ensures continued availability of the program to producers on a nationwide basis.
Budget
In general
The Board shall ensure that any Standard Reinsurance Agreement negotiated under subparagraph (A)(ii) shall—
to the maximum extent practicable, be estimated as budget neutral with respect to the total amount of payments described in paragraph (9) as compared to the total amount of such payments estimated to be made under the immediately preceding Standard Reinsurance Agreement if that Agreement were extended over the same period of time;
comply with the applicable provisions of this subchapter establishing the rates of reimbursement for administrative and operating costs for approved insurance providers and agents, except that, to the maximum extent practicable, the estimated total amount of reimbursement for those costs shall not be less than the total amount of the payments to be made under the immediately preceding Standard Reinsurance Agreement if that Agreement were extended over the same period of time, as estimated on
in no event significantly depart from budget neutrality unless otherwise required by this subchapter.
Use of savings
Due date for payment of underwriting gains
Effective beginning with the 2011 reinsurance year, the Corporation shall make payments for underwriting gains under this subchapter on—
for the 2011 reinsurance year,
for each reinsurance year thereafter, October 1 of the following calendar year.
Additional expenses
In general
Payment amount
Definitions
In this paragraph:
Eligible contract
The term “eligible contract”—
means a crop insurance contract entered into by an approved insurance provider in an eligible State; and
does not include a contract for—
catastrophic risk protection under subsection (b);
an area-based plan of insurance or similar plan of insurance, as determined by the Corporation; or
a policy under which an approved insurance provider does not incur loss adjustment expenses, as determined by the Corporation.
Eligible State
Specialty crops
Minimum reimbursement
Beginning with the 2026 reinsurance year, and for each reinsurance year thereafter, the rate of reimbursement to approved insurance providers and agents for administrative and operating expenses with respect to crop insurance contracts covering agricultural commodities described in section 101 of the Specialty Crops Competitiveness Act of 2004 (7 U.S.C. 1621 note; Public Law 108–465) shall be equal to or greater than the percentage that is the greater of the following:
17 percent of the premium used to define loss ratio.
The percent of the premium used to define loss ratio that is otherwise applicable for the reinsurance year under the terms of the Standard Reinsurance Agreement in effect for the reinsurance year.
Other contracts
Administration
A&O inflation adjustment
In general
Special rule for 2026 reinsurance year
Administration
An increase under subparagraph (A)—
shall apply with respect to all contracts covering agricultural commodities that were subject to an increase during the period of the 2011 through 2015 reinsurance years under the enclosure referred to in that subparagraph; and
shall not be considered a renegotiation under paragraph (8)(A).
Optional coverages
Quality loss adjustment coverage
Effect of coverage
Additional quality loss adjustment
Producer option
Notwithstanding any other provision of law, in addition to the quality loss adjustment coverage available under paragraph (1), the Corporation shall offer producers the option of purchasing quality loss adjustment coverage on a basis that is smaller than a unit with respect to an agricultural commodity that satisfies each of the following:
The agricultural commodity is sold on an identity-preserved basis.
All quality determinations are made solely by the Federal agency designated to grade or classify the agricultural commodity.
All quality determinations are made in accordance with standards published by the Federal agency in the Federal Register.
The discount schedules that reflect the reduction in quality of the agricultural commodity are established by the Secretary.
Basis for adjustment
Review of criteria and procedures
Review
Procedures
Quality of agricultural commodities delivered to warehouse operators
In administering this subchapter, the Secretary shall accept, in the same manner and under the same terms and conditions, evidence of the quality of agricultural commodities delivered to—
warehouse operators that are licensed under the United States Warehouse Act (7 U.S.C. 241 et seq.);
warehouse operators that—
are licensed under State law; and
have entered into a storage agreement with the Commodity Credit Corporation; and
warehouse operators that—
are not licensed under State law but are in compliance with State law regarding warehouses; and
have entered into a commodity storage agreement with the Commodity Credit Corporation.
Special provisions for malting barley
Test weight for corn
In general
Implementation
Termination of effectiveness
Limitation on multiple benefits for same loss
In general
Exception
Crop production on native sod
Definition of native sod
In this subsection, the term “native sod” means land—
on which the plant cover is composed principally of native grasses, grasslike plants, forbs, or shrubs suitable for grazing and browsing; and
that has never been tilled, or the producer cannot substantiate that the ground has ever been tilled, for the production of an annual crop as of the date of enactment of this subsection.
Reduction in benefits
In general
First 4 crop years
Subsequent crop years
Native sod acreage that has been tilled for the production of an insurable crop after
during the first 10 years after initial tillage; and
during each of which a crop on that acreage is insured under subsection (c).
De minimis acreage exemption
Administration
Reduction
For purposes of the reduction in benefits for the acreage described in subparagraph (A)—
the crop insurance guarantee shall be determined by using a yield equal to 65 percent of the transitional yield of the producer; and
the crop insurance premium subsidy provided for the producer under this subchapter, except for coverage authorized pursuant to subsection (b)(1), shall be 50 percentage points less than the premium subsidy that would otherwise apply.
Yield substitution
Application
Coverage levels by practice
Source
(Feb. 16, 1938, ch. 30, title V, § 508, 52 Stat. 74; June 22, 1938, ch. 563, 52 Stat. 835; June 21, 1941, ch. 214, §§ 3–7, 10, 55 Stat. 255, 256; Dec. 23, 1944, ch. 713, §§ 1–3, 58 Stat. 918, 919; Aug. 1, 1947, ch. 440, §§ 1–3, 61 Stat. 718; Aug. 25, 1949, ch. 512, §§ 1–3, 63 Stat. 663; Aug. 13, 1953, ch. 431, 67 Stat. 575; Pub. L. 85–111,Notes
Editorial Notes
References in Text
Codification
Amendments
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
Effective Date of 2014 Amendment
Effective Date of 2008 Amendment
Effective Date of 2000 Amendment
Effective Date of 1998 Amendment
Effective Date of 1994 Amendment
Effective Date of 1993 Amendment
Effective Date of 1980 Amendment
Crop Insurance Coverage for Hemp
Consideration of Losses in Fiscal Year 2014 and Subsequent Fiscal Years
Expansion of Crop Insurance Pilots
Limitation on Fee for Catastrophic Risk Protection
Special Rule for 1996 Crop Year Regarding Catastrophic Risk Protection Insurance
Effective period.—
This paragraph shall apply only to the 1996 crop year.
Availability.—
During a period of not less than 2 weeks, but not more than 4 weeks, beginning on the date of enactment of this title [
Attachment.—
Insurance coverage under any policy obtained under this paragraph during the extended sales period shall not attach until 10 days after the application.
Cancellation.—
During the extended period, a producer may cancel a catastrophic risk protection policy if—
the policy is a continuation of a policy that was obtained for a previous crop year; and
the cancellation request is made before the acreage reporting date for the policy for the 1996 crop year.”
Crop Insurance Pilot Program
Coverage.—
The Secretary of Agriculture shall develop and administer a pilot project for crop insurance coverage that indemnifies crop losses due to a natural disaster such as insect infestation or disease.
Actuarial soundness.—
A pilot project under this paragraph shall be actuarially sound, as determined by the Secretary and administered at no net cost.
Duration.—
A pilot project under this paragraph shall be of two years’ duration.”
Prevented Planting
In General.—
Effective for the 1994 crop year, a producer described in subsection (b) shall receive compensation under the prevented planting coverage policy provision described in subsection (b)(1) by—
obtaining from the Secretary of Agriculture the applicable amount that is payable under the conserving use program described in subsection (b)(4); and
obtaining from the Federal Crop Insurance Corporation the amount that is equal to the difference between—
the amount that is payable under the conserving use program; and
the amount that is payable under the prevented planting coverage policy.
Eligible Producers.—
Subsection (a) shall apply to a producer who—
purchased a prevented planting policy for the 1994 crop year from the Federal Crop Insurance Corporation prior to the spring sales closing date for the 1994 crop year;
is unable to plant a crop due to major, widespread flooding in the Midwest, or excessive ground moisture, that occurred prior to the spring sales closing date for the 1994 crop year;
had a reasonable expectation of planting a crop on the prevented planting acreage for the 1994 crop year; and
participates in a conserving use program established for the 1994 crop of wheat, feed grains, upland cotton, or rice established under section 107B(c)(1)(E), 105B(c)(1)(E), 103B(c)(1)(D), or 101B(c)(1)(D), respectively, of the Agricultural Act of 1949 ([former] 7 U.S.C. 1445b–3a(c)(1)(E), 1444f(c)(1)(E), 1444–2(c)(1)(D), or 1441–2(c)(1)(D)).
Oilseed Prevented Planting Payments.—
In general.—
Effective for the 1994 crop year, a producer of a crop of oilseeds (as defined in section 205(a) of the Agricultural Act of 1949 ([former] 7 U.S.C. 1446f(a))) shall receive a prevented planting payment for the crop if the requirements of paragraphs (1), (2), and (3) of subsection (b) are satisfied.
Source of payment.—
The total amount of payments required under this subsection shall be made by the Federal Crop Insurance Corporation.
Payment.—
A payment under this section may not be made before
Report on Improving Dissemination of Crop Insurance Information
Federal Crop Insurance Commission
Loss Adjustment Obligations
should not be required to assume 100 percent of all loss adjustments in the Federal crop insurance program; and
should assume and perform the loss adjustment obligations of a reinsured company if the Corporation determines that such company’s loss adjustment performance and practices are not carried out in accordance with the applicable reinsurance agreement.”