7 USC 1508 - Crop insurance

U.S Code last checked for updates: May 02, 2024

§ 1508.

Crop insurance

(a)

Authority to offer insurance

(1)

In general

(2)

Period

(3)

Exclusion of losses due to certain actions of producer

(A)

Exclusions

Insurance provided under this subsection shall not cover losses due to—

(i)

the neglect or malfeasance of the producer;

(ii)

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

(iii)

the failure of the producer to follow good farming practices, including scientifically sound sustainable and organic farming practices.

(B)

Good farming practices determination review

(i)

Informal administrative process

(ii)

Administrative review

(I)

No adverse decision

(II)

Reversal or modification

(iii)

Judicial review

(I)

Right to review

(II)

Reversal or modification

(C)

Limitation on revenue coverage for potatoes

(4)

Expansion to other areas or single producers

(A)

Area expansion

(B)

Producer expansion

(5)

Dissemination of crop insurance information

(A)

Available information

The Corporation shall make available to producers through local offices of the Department—

(i)

current and complete information on all aspects of Federal crop insurance; and

(ii)

a listing of insurance agents and companies offering to sell crop insurance in the area of the producers.

(B)

Use of electronic methods

(i)

Dissemination by Corporation

(ii)

Submission to Corporation

(6)

Addition of new and specialty crops (including value-added crops)

(A)

Annual review

Not later than 1 year after December 20, 2018, and annually thereafter, the manager of the Corporation shall prepare, to the maximum extent practicable, based on data shared from the noninsured crop disaster assistance program established by section 7333 of this title, written agreements, or other data, and present to the Board not less than 1 of each of the following:

(i)

Research and development for a policy or plan of insurance for a commodity for which there is no existing policy or plan of insurance.

(ii)

Expansion of an existing policy or plan of insurance to additional counties or States, including malting barley endorsements or contract options.

(iii)

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.

(B)

Report

(7)

Adequate coverage for States and underserved producers

(A)

Definitions

In this paragraph:

(i)

Adequately served

(ii)

Underserved producer

The term “underserved producer” means an individual (including a member of an Indian Tribe) that is—

(I)

a beginning farmer or rancher;

(II)

a veteran farmer or rancher; or

(III)

a socially disadvantaged farmer or rancher.

(B)

Review

(C)

Report

(i)

In general

(ii)

Recommendations

(8)

Special provisions for cotton and rice

(9)

Premium adjustments

(A)

Prohibition

(B)

Exceptions

Subparagraph (A) does not apply with respect to—

(i)

a payment authorized under subsection (b)(5)(B);

(ii)

a performance-based discount authorized under subsection (d)(3); or

(iii)

a patronage dividend, or similar payment, that is paid—

(I)

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

(II)

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.

(C)

Publication of violations

(i)

Publication required

(ii)

Protection of privacy

(10)

Commissions

(A)

Definition of immediate family

(B)

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—

(i)

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

(ii)

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.

(C)

Reporting

(D)

Sanctions

(E)

Applicability

(i)

In general

(ii)

Prohibition

(11)

Cover crops

(A)

In general

(B)

Termination

(i)

In general

The termination of a cover crop shall be carried out according to—

(I)

guidelines established by the Secretary; or

(II)

an exception to the guidelines approved under clause (ii).

(ii)

Exception to guidelines

The Corporation shall approve an exception to the guidelines under clause (i)(I) if that exception is recommended by—

(I)

the Natural Resources Conservation Service; or

(II)

an agricultural expert, as determined by the Corporation, unless the exception is determined to be unreasonable by the Corporation.

(C)

Insurability of subsequent crop

(D)

Summer fallow

(b)

Catastrophic risk protection

(1)

Coverage availability

(2)

Amount of coverage

(A)

In general

Subject to subparagraph (B)—

(i)

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

(ii)

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).

(B)

Reduction in actual payment

(3)

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:

(A)

The catastrophic risk protection coverage available under paragraph (2)(A).

(B)

An alternative catastrophic risk protection coverage that—

(i)

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;

(ii)

provides, on a uniform national basis, a higher combination of yield and price protection than the coverage available under paragraph (2)(A); and

(iii)

the Corporation determines is comparable to the coverage available under paragraph (2)(A) for purposes of subsection (e)(2)(A).

(4)

Sale of catastrophic risk coverage

(A)

In general

Catastrophic risk coverage may be offered by—

(i)

approved insurance providers, if available in an area; and

(ii)

at the option of the Secretary that is based on considerations of need, local offices of the Department.

(B)

Need

(C)

Delivery of coverage

(i)

In general

(ii)

Coverage by approved insurance providers

(iii)

Timing of determinations

(iv)

Current policies

(5)

Administrative fee

(A)

Basic fee

(B)

Payment of catastrophic risk protection fee on behalf of producers

(i)

Payment authorized

(ii)

Selection of provider

(iii)

Delivery of insurance

(iv)

Additional coverage encouraged

(C)

Time for payment

(D)

Use of fees

(i)

In general

(ii)

Limitation

(E)

Waiver of fee

(i)

In general

(ii)

Coordination

(6)

Participation requirement

(7)

Limitation due to risk

(8)

Transitional coverage for 1995 crops

(9)

Simplification

(A)

Catastrophic risk protection plans

(B)

Other plans

(10)

Loss adjustment

(c)

General coverage levels

(1)

Additional coverage generally

(A)

In general

(B)

Purchase

(2)

Transfer of relevant information

(3)

Yield and loss basis options

A producer shall have the option of purchasing additional coverage based on—

(A)

(i)

an individual yield and loss basis; or

(ii)

an area yield and loss basis;

(B)

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

(C)

a margin basis alone or in combination with the coverages available under subparagraph (A) or (B).

(4)

Level of coverage

(A)

Dollar denomination and percentage of yield

Except as provided in subparagraph (C), the level of coverage—

(i)

shall be dollar denominated; and

(ii)

may be purchased at any level not to exceed 85 percent of the individual yield or 95 percent of the area yield (as determined by the Corporation).

(B)

Information

(C)

Supplemental coverage option

(i)

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—

(I)

at a county-wide level to the fullest extent practicable; or

(II)

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.

(ii)

Trigger

(iii)

Coverage

Subject to the trigger described in clause (ii), coverage offered under paragraph (3)(B) and clause (i) shall not exceed the difference between—

(I)

86 percent; and

(II)

the coverage level selected by the producer for the underlying policy or plan of insurance.

(iv)

Ineligible crops and acres

(v)

Calculation of premium

Notwithstanding subsection (d), the premium for coverage offered under paragraph (3)(B) and clause (i) shall—

(I)

be sufficient to cover anticipated losses and a reasonable reserve; and

(II)

include an amount for operating and administrative expenses established in accordance with subsection (k)(4)(F).

(5)

Expected market price

(A)

Establishment or approval

(B)

General rule

(C)

Other authorized approaches

The expected market price of an agricultural commodity—

(i)

may be based on the actual market price of the agricultural commodity at the time of harvest, as determined by the Corporation;

(ii)

in the case of revenue and other similar plans of insurance, may be the actual market price of the agricultural commodity, as determined by the Corporation;

(iii)

in the case of cost of production or similar plans of insurance, shall be the projected cost of producing the agricultural commodity, as determined by the Corporation; or

(iv)

in the case of other plans of insurance, may be an appropriate amount, as determined by the Corporation.

(D)

Grain sorghum price election

(i)

In general

The Corporation, in conjunction with the Secretary (referred to in this subparagraph as the “Corporation”), shall—

(I)

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

(II)

request applicable data from the grain sorghum industry.

(ii)

Expert reviewers

(I)

In general

(II)

Requirements

The expert reviewers under subclause (I) shall be comprised of agricultural economists with experience in grain sorghum and corn markets, of whom—

(aa)

2 shall be agricultural economists of institutions of higher education;

(bb)

2 shall be economists from within the Department; and

(cc)

1 shall be an economist nominated by the grain sorghum industry.

(iii)

Recommendations

(I)

In general

(II)

Consideration

(III)

Publication

(iv)

Appropriate pricing methodology

(I)

In general

(II)

Interim methodology

(III)

Availability

(6)

Price elections

(A)

In general

(B)

Minimum price elections

(C)

Wheat classes and malting barley

(D)

Organic crops

(i)

In general

(ii)

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—

(I)

the numbers and varieties of organic crops insured;

(II)

the progress of implementing the price elections required under this subparagraph, including the rate at which additional price elections are adopted for organic crops;

(III)

the development of new insurance approaches relevant to organic producers; and

(IV)

any recommendations the Corporation considers appropriate to improve Federal crop insurance coverage for organic crops.

(7)

Fire and hail coverage

(8)

State premium subsidies

(9)

Limitations on additional coverage

(10)

Administrative fee

(A)

Fee required

(B)

Use of fees; waiver

(C)

Time for payment

(d)

Premiums

(1)

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—

(A)

1.1 through September 30, 1998;

(B)

1.075 for the period beginning October 1, 1998, and ending on the day before the date of enactment of the Food, Conservation, and Energy Act of 2008; and

(C)

1.0 on and after the date of enactment of that Act.

(2)

Premium amounts

The premium amounts for catastrophic risk protection under subsection (b) and additional coverage under subsection (c) shall be fixed as follows:

(A)

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.

(B)

In the case of additional coverage equal to or greater than 50 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount of the premium shall—

(i)

be sufficient to cover anticipated losses and a reasonable reserve; and

(ii)

include an amount for operating and administrative expenses, as determined by the Corporation, on an industry-wide basis as a percentage of the amount of the premium used to define loss ratio.

(3)

Performance-based discount

(4)

Billing date for premiums

(e)

Payment of portion of premium by Corporation

(1)

In general

(2)

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:

(A)

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).

(B)

In the case of additional coverage equal to or greater than 50 percent, but less than 55 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—

(i)

67 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(C)

In the case of additional coverage equal to or greater than 55 percent, but less than 65 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—

(i)

64 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(D)

In the case of additional coverage equal to or greater than 65 percent, but less than 75 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—

(i)

59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(E)

In the case of additional coverage equal to or greater than 75 percent, but less than 80 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—

(i)

55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(F)

In the case of additional coverage equal to or greater than 80 percent, but less than 85 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—

(i)

48 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(G)

Subject to subsection (c)(4), in the case of additional coverage equal to or greater than 85 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of—

(i)

38 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(H)

In the case of the supplemental coverage option authorized in subsection (c)(4)(C), the amount shall be equal to the sum of—

(i)

65 percent of the additional premium associated with the coverage; and

(ii)

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.

(3)

Prohibition on continuous coverage

(4)

Premium payment disclosure

(5)

Enterprise and whole farm units

(A)

In general

(B)

Amount

(C)

Limitation

(D)

Nonirrigated crops

(E)

Enterprise units across county lines

The Corporation may allow a producer to establish a single enterprise unit by combining an enterprise unit with—

(i)

1 or more other enterprise units in 1 or more other counties; or

(ii)

all basic units and all optional units in 1 or more other counties.

(6)

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:

(A)

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—

(i)

59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(B)

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—

(i)

55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(C)

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—

(i)

49 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(D)

In the case of additional 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—

(i)

44 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(7)

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:

(A)

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—

(i)

59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(B)

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—

(i)

55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(C)

In the case of additional area coverage equal to or greater than 90 percent,1

 So in original. The comma probably should not appear.

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—

(i)

51 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and

(ii)

the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.

(8)

Premium for beginning and veteran farmers or ranchers

(f)

Eligibility

(1)

In general

(2)

Sales closing date

(A)

In general

(B)

Established dates

(C)

Exception

(3)

Records and reporting

To obtain catastrophic risk protection under subsection (b) or additional coverage under subsection (c), a producer shall—

(A)

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

(B)

report acreage planted and prevented from planting by the designated acreage reporting date for the crop and location as established by the Corporation.

(g)

Yield determinations

(1)

In general

(2)

Yield coverage plans

(A)

Actual production history

(B)

Assigned yield

If the producer does not provide satisfactory evidence of the yield of a commodity under subparagraph (A), the producer shall be assigned—

(i)

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;

(ii)

a yield determined by the Corporation, in the case of—

(I)

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;

(II)

a producer that produces an agricultural commodity on land that has not been farmed by the producer; or

(III)

a producer that rotates a crop produced on a farm to a crop that has not been produced on the farm; or

(iii)

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—

(I)

the actual production history of the previous producer of the crop or livestock on the acreage determined under subparagraph (A); or

(II)

a yield of the producer, as determined in clause (i).

(C)

Area yield

(D)

Commodity-by-commodity basis

(E)

Sources of yield data

To determine yields under this paragraph, the Corporation—

(i)

shall use county data collected by the Risk Management Agency, the National Agricultural Statistics Service, or both; or

(ii)

if sufficient county data is not available, may use other data considered appropriate by the Secretary.

(3)

Transitional yields for producers of feed or forage

(A)

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—

(i)

the producer grows feed or forage primarily for on-farm use in a livestock, dairy, or poultry operation; and

(ii)

over 50 percent of the net farm income of the producer is derived from the operation.

(B)

Yield calculation

The Corporation shall—

(i)

for the first year of participation of a producer, provide the assigned yield under this paragraph to the producer of feed or forage; and

(ii)

for the second year of participation of the producer, apply the actual production history or assigned yield requirement, as provided in this subsection.

(C)

Termination of authority

(4)

Adjustment in actual production history to establish insurable yields

(A)

Application

(B)

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—

(i)

exclude any of such recorded or appraised yield; and

(ii)

(I)

replace each excluded yield with a yield equal to 60 percent of the applicable transitional yield; or

(II)

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.

(C)

Election to exclude certain history

(i)

In general

(ii)

Contiguous counties

(iii)

Irrigation practice

(D)

Premium adjustment

(5)

Adjustment to reflect increased yields from successful pest control efforts

(A)

Situations justifying adjustment

The Corporation shall develop a methodology for adjusting the actual production history of a producer when each of the following apply:

(i)

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

(ii)

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.

(iii)

The efforts described in clause (i) have been effective.

(B)

Adjustment amount

(6)

Continued authority

(A)

In general

The Corporation shall establish—

(i)

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

(ii)

actuarially sound premiums to cover additional risk.

(B)

Other authority

(C)

Effect

(h)

Submission of policies and materials to Board

(1)

Authority to submit

(A)

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—

(i)

other crop insurance policies and provisions of policies; and

(ii)

rates of premiums for multiple peril crop insurance pertaining to wheat, soybeans, field corn, and any other crops determined by the Secretary.

(B)

Review and submission by Corporation

(i)

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—

(I)

subject to clause (ii), will likely result in a viable and marketable policy consistent with this subsection;

(II)

would provide crop insurance coverage in a significantly improved form; and

(III)

adequately protects the interests of producers.

(ii)

Waiver for hemp

(2)

Submission of policies

(3)

Review and approval by the Board

(A)

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—

(i)

the interests of producers are adequately protected;

(ii)

the proposed policy or plan of insurance will—

(I)

provide a new kind of coverage that is likely to be viable and marketable;

(II)

provide crop insurance coverage in a manner that addresses a clear and identifiable flaw or problem in an existing policy; or

(III)

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

(iii)

the proposed policy or plan of insurance will not have a significant adverse impact on the crop insurance delivery system.

(B)

Consideration

In approving policies or plans of insurance, the Board shall in a timely manner—

(i)

first, consider policies or plans of insurance that address underserved commodities, including commodities for which there is no insurance;

(ii)

second, consider existing policies or plans of insurance for which there is inadequate coverage or there exists low levels of participation; and

(iii)

last, consider all policies or plans of insurance submitted to the Board that do not meet the criteria described in clause (i) or (ii).

(C)

Specified review and approval priorities

In reviewing policies and other materials submitted to the Board under this subsection for approval, the Board—

(i)

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;

(ii)

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;

(iii)

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

(iv)

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).

(4)

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:

(A)

Confidentiality

(i)

In general

(ii)

Standard of confidentiality

(iii)

Application

(B)

Personal presentation

(C)

Notification of intent to disapprove

(i)

Time period

(ii)

Modification of application

(I)

Authority

(II)

Time period

(iii)

Explanation

(D)

Determination to approve or disapprove policies or materials

(i)

Time period

(ii)

Explanation

(iii)

Failure to meet deadline

(E)

Consultation

(i)

Requirement

(ii)

Submission to the Board

(iii)

Evaluation by the Board

(5)

Premium schedule

(A)

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—

(i)

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

(ii)

an amount for administrative and operating expenses determined in accordance with subsection (k)(4).

(B)

Transitional schedule

(6)

Additional prevented planting policy coverage

(A)

In general

(B)

Approved insurance providers

(C)

Timing of loss

A crop loss shall be covered by the additional prevented planting coverage if—

(i)

crop insurance policies were obtained for—

(I)

the crop year the loss was experienced; and

(II)

the crop year immediately preceding the year of the prevented planting loss; and

(ii)

the cause of the loss occurred—

(I)

after the sales closing date for the crop in the crop year immediately preceding the loss; and

(II)

before the sales closing date for the crop in the year in which the loss is experienced.

(i)

Adoption of rates and coverages

(1)

In general

(2)

Review of rating methodologies

(3)

Analysis of rating and loss history

(4)

Premium adjustment

(j)

Claims for losses

(1)

In general

(2)

Denial of claims

(A)

In general

(B)

Statute of limitations

(3)

Indemnification

(4)

Marketing windows

(5)

Settlement of claims on farm-stored production

(k)

Reinsurance

(1)

In general

(2)

Terms and conditions

(3)

Share of risk

(4)

Rate

(A)

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—

(i)

for the 1998 reinsurance year, 27 percent of the premium used to define loss ratio; and

(ii)

for each of the 1999 and subsequent reinsurance years, 24.5 percent of the premium used to define loss ratio.

(B)

Proportional reductions

(C)

Other reductions

(D)

Time for reimbursement

(E)

Reimbursement rate reduction

(F)

Reimbursement rate for area policies and plans of insurance

(5)

Cost and regulatory reduction

(6)

Agency discretion

(7)

Plan

(8)

Renegotiation of standard reinsurance agreement

(A)

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—

(i)

to be effective for the 2011 reinsurance year beginning July 1, 2010; and

(ii)

once during each period of 5 reinsurance years thereafter.

(B)

Exceptions

(i)

Adverse circumstances

(ii)

Effect of Federal law changes

(C)

Notification requirement

(D)

Consultation

(E)

2011 reinsurance year

(i)

In general

(ii)

Alternative methods

Alternatives considered under clause (i) shall include—

(I)

methods that—

(aa)

are graduated and base reimbursement rates in a State on changes in premiums in that State;

(bb)

are graduated and base reimbursement rates in a State on the loss ratio for crop insurance for that State; and

(cc)

are graduated and base reimbursement rates on individual policies on the level of total premium for each policy; and

(II)

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.

(F)

Budget

(i)

In general

The Board shall ensure that any Standard Reinsurance Agreement negotiated under subparagraph (A)(ii) shall—

(I)

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;

(II)

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 February 7, 2014; and

(III)

in no event significantly depart from budget neutrality unless otherwise required by this subchapter.

(ii)

Use of savings

(9)

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—

(A)

for the 2011 reinsurance year, October 1, 2012; and

(B)

for each reinsurance year thereafter, October 1 of the following calendar year.

(l)

Optional coverages

(m)

Quality loss adjustment coverage

(1)

Effect of coverage

(2)

Additional quality loss adjustment

(A)

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:

(i)

The agricultural commodity is sold on an identity-preserved basis.

(ii)

All quality determinations are made solely by the Federal agency designated to grade or classify the agricultural commodity.

(iii)

All quality determinations are made in accordance with standards published by the Federal agency in the Federal Register.

(iv)

The discount schedules that reflect the reduction in quality of the agricultural commodity are established by the Secretary.

(B)

Basis for adjustment

(3)

Review of criteria and procedures

(A)

Review

(B)

Procedures

(4)

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—

(A)

warehouse operators that are licensed under the United States Warehouse Act (7 U.S.C. 241 et seq.);

(B)

warehouse operators that—

(i)

are licensed under State law; and

(ii)

have entered into a storage agreement with the Commodity Credit Corporation; and

(C)

warehouse operators that—

(i)

are not licensed under State law but are in compliance with State law regarding warehouses; and

(ii)

have entered into a commodity storage agreement with the Commodity Credit Corporation.

(5)

Special provisions for malting barley

(6)

Test weight for corn

(A)

In general

(B)

Implementation

(C)

Termination of effectiveness

(n)

Limitation on multiple benefits for same loss

(1)

In general

(2)

Exception

(o)

Crop production on native sod

(1)

Definition of native sod

In this subsection, the term “native sod” means land—

(A)

on which the plant cover is composed principally of native grasses, grasslike plants, forbs, or shrubs suitable for grazing and browsing; and

(B)

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.

(2)

Reduction in benefits

(A)

In general

(i)

First 4 crop years

(ii)

Subsequent crop years

Native sod acreage that has been tilled for the production of an insurable crop after December 20, 2018, shall be subject to a reduction in benefits under this subchapter as described in this paragraph for not more than 4 cumulative years—

(I)

during the first 10 years after initial tillage; and

(II)

during each of which a crop on that acreage is insured under subsection (c).

(B)

De minimis acreage exemption

(C)

Administration

(i)

Reduction

For purposes of the reduction in benefits for the acreage described in subparagraph (A)—

(I)

the crop insurance guarantee shall be determined by using a yield equal to 65 percent of the transitional yield of the producer; and

(II)

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.

(ii)

Yield substitution

(3)

Application

(p)

Coverage levels by practice

(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, July 23, 1957, 71 Stat. 309; Pub. L. 86–131, Aug. 4, 1959, 73 Stat. 278; Pub. L. 88–589, Sept. 12, 1964, 78 Stat. 933; Pub. L. 96–365, title I, §§ 105, 106, 107(b), Sept. 26, 1980, 94 Stat. 1314, 1315, 1317; Pub. L. 100–387, title II, § 208(a), Aug. 11, 1988, 102 Stat. 941; Pub. L. 101–624, title XXII, §§ 2203–2205, Nov. 28, 1990, 104 Stat. 3955–3957; Pub. L. 102–237, title VI, § 601(4), (5), Dec. 13, 1991, 105 Stat. 1878; Pub. L. 103–66, title XIV, § 1403(b)(1), (2), Aug. 10, 1993, 107 Stat. 333, 334; Pub. L. 103–354, title I, § 106, Oct. 13, 1994, 108 Stat. 3183; Pub. L. 104–127, title I, §§ 193(a)(1), (2), (c), (d), (f), 195, Apr. 4, 1996, 110 Stat. 943–946; Pub. L. 105–185, title V, §§ 532, 534, June 23, 1998, 112 Stat. 581, 583; Pub. L. 105–277, div. A, § 101(a) [title VIII, § 803(a)], Oct. 21, 1998, 112 Stat. 2681, 2681–38; Pub. L. 106–113, div. B, § 1000(a)(5) [title II, §§ 205(a), 206], Nov. 29, 1999, 113 Stat. 1536, 1501A–294; Pub. L. 106–224, title I, §§ 101–103(b)(1), (c), (d), 104–107, 123, 124(a), 144–146, 161, 162, June 20, 2000, 114 Stat. 360–368, 378, 391, 392, 395; Pub. L. 107–171, title X, §§ 10001–10003, May 13, 2002, 116 Stat. 486; Pub. L. 109–97, title VII, § 780, Nov. 10, 2005, 119 Stat. 2162; Pub. L. 110–234, title XII, §§ 12003(b)–12006(a), 12007–12014(a), 12015–12020(a), 12033(c)(2)(B), May 22, 2008, 122 Stat. 1372–1381, 1405; Pub. L. 110–246, § 4(a), title XII, §§ 12003(b)–12006(a), 12007–12014(a), 12015–12020(a), 12033(c)(2)(B), June 18, 2008, 122 Stat. 1664, 2133–2142, 2167; Pub. L. 113–79, title XI, §§ 11002–11003(c), 11004–11010(a), 11011–11014(a), 11015, 11016(b), 11017(b), 11023(a), 11028(a), title XII, § 12305(b), Feb. 7, 2014, 128 Stat. 954–957, 960, 961, 963, 966, 973, 977, 988; Pub. L. 114–74, title II, § 201, Nov. 2, 2015, 129 Stat. 587; Pub. L. 114–94, div. C, title XXXII, § 32205, Dec. 4, 2015, 129 Stat. 1740; Pub. L. 115–334, title XI, §§ 11105(b)–11109(a), 11110–11114, title XII, § 12306(b)(2), Dec. 20, 2018, 132 Stat. 4921–4924, 4968.)

cite as: 7 USC 1508

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