Common Crop Insurance Regulations, Coverage Enhancement Option Provisions; Corrections, 80295 [E8-31105]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 73, Number 251 (Wednesday, December 31, 2008)]
[Rules and Regulations]
[Page 80295]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-31105]



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Federal Register / Vol. 73, No. 251 / Wednesday, December 31, 2008 / 
Rules and Regulations

[[Page 80295]]



DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 457

RIN 0563-AC15


Common Crop Insurance Regulations, Coverage Enhancement Option 
Provisions; Corrections

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule; corrections.

-----------------------------------------------------------------------

SUMMARY: This document contains corrections to the final regulation 
that was published Monday, July 28, 2008 (73 FR 43607-43611). The 
regulation pertains to the Coverage Enhancement Option.

DATES: Effective Date: December 31, 2008.

FOR FURTHER INFORMATION CONTACT: Bill Klein, Risk Management 
Specialist, Product Management, Product Administration and Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, Beacon Facility--Mail Stop 0812, PO Box 419205, Kansas 
City, MO 64141-6205, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION: 

Background

    The final regulation that is the subject of these corrections was 
intended to make permanent the Pilot Coverage Enhancement Option 
Provisions to be used in conjunction with the Common Crop Insurance 
Policy Basic Provisions and selected crop policies for ease of use and 
consistency of terms.

Need for Corrections

    As published, the final regulation contained an error that may 
prove to be misleading and needs to be clarified.
    The term ``total value of the insured crop'' defined in section 1 
of the Coverage Enhancement Option is incorrect and should read ``total 
value of the insured crop by unit.'' The term ``total value of the 
insured crop by unit'' has replaced the term ``total value of the 
insured crop'' everywhere it appears in the Coverage Enhancement 
Option. This includes in the definition of the term ``CEO dollar amount 
of insurance,'' section 7, section 8(b) and paragraphs (b) and (c) in 
the example. This change ensures liability and indemnity determinations 
are on the same basis.
    Also, in the definition of ``Total value of the insured crop by 
unit'' in section 1, the phrase ``and summing the total for all 
units,'' should be removed. This language could give the impression 
that when multiple units are involved, the value of all units should be 
added together. However, section 8 and the example are calculated on a 
unit basis so that bringing the value of other units into the 
calculation would result in an incorrect indemnity.

Crop Insurance, Coverage Enhancement Option

Correction of Publication

0
Accordingly, the 7 CFR part 457 is corrected as follows:

PART 457--COMMON CROP INSURANCE REGULATIONS

0
1. The authority citation for 7 CFR part 457 is revised to read as 
follows:

    Authority: 7 U.S.C. 1506(l) and 1506(o).


0
2. Sec.  457.172 is amended by revising in section 1 the definitions of 
``CEO dollar amount of insurance,'' ``total value of the insured 
crop,'' section 7, section 8(b), and paragraphs (b) and (c) of the 
Example to read as follows:


Sec.  457.172  Coverage Enhancement Option.

* * * * *
    1. Definitions.
* * * * *
    CEO dollar amount of insurance--The value of the additional 
insurance coverage for each unit provided by the CEO, which is 
determined by multiplying the CEO coverage level by the total value of 
the insured crop by unit and subtracting the MPCI dollar amount of 
insurance.
* * * * *
    Total value of the insured crop by unit--The value of the crop that 
is determined by dividing the MPCI dollar amount of insurance for each 
unit by the MPCI coverage level.
* * * * *
    7. If you elect CEO and a MPCI indemnity is paid on any unit, CEO 
will pay a portion of the loss not paid under the deductible of the 
MPCI policy depending on the CEO coverage level you select (For 
example, if you selected a 50 percent MPCI coverage level, selected an 
85 percent CEO coverage level, and had 60 percent loss of the insured 
crop, the total amount of indemnity paid under both the MPCI policy and 
the CEO would be equal to approximately 51 percent of the total value 
of the insured crop by unit). See the example in section 8.
* * * * *
    8. * * *
* * * * *
    (b) Determine the total value of the insured crop by unit;
* * * * *
    Example:
* * * * *
    (b) $120,000 MPCI dollar amount of insurance, divided by the MPCI 
coverage level of .50 results in $240,000 total value of the insured 
crop by unit;
    (c) $240,000 total value of the insured crop by unit multiplied by 
the CEO coverage level .85, equals $204,000, and subtracting $120,000 
MPCI dollar amount of insurance equals $84,000 CEO dollar amount of 
insurance;
* * * * *

    Signed in Washington, DC, on December 23, 2008.
Eldon Gould,
Manager, Federal Crop Insurance Corporation.
 [FR Doc. E8-31105 Filed 12-30-08; 8:45 am]
BILLING CODE 3410-08-P