Catastrophic Risk Protection Endorsement, 50929-50931 [2011-20850]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 76, Number 159 (Wednesday, August 17, 2011)]
[Proposed Rules]
[Pages 50929-50931]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-20850]


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Proposed Rules
                                                Federal Register
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This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 76, No. 159 / Wednesday, August 17, 2011 / 
Proposed Rules

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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 402

[Docket No. FCIC-11-0003]
RIN 0563-AC31


Catastrophic Risk Protection Endorsement

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Proposed rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) proposes to 
amend the Catastrophic Risk Protection Endorsement. The intended effect 
of this action is to clarify existing policy provisions and to 
incorporate changes that are consistent with those made in the Common 
Crop Insurance Policy Basic Provisions and to incorporate provisions 
regarding catastrophic risk protection coverage for area yield plans 
from the Group Risk Plan (GRP) of Insurance Basic Provisions. The 
proposed changes will be effective for the 2013 and succeeding crop 
years.

DATES: Written comments and opinions on this proposed rule will be 
accepted until close of business October 17, 2011 and will be 
considered when the rule is to be made final.

ADDRESSES: FCIC prefers that comments be submitted electronically 
through the Federal eRulemaking Portal. You may submit comments, 
identified by Docket ID No. FCIC-11-0003, by any of the following 
methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Director, Product Administration and Standards 
Division, Risk Management Agency, United States Department of 
Agriculture, P.O. Box 419205, Kansas City, MO 64133-6205.

All comments received, including those received by mail, will be posted 
without change to https://www.regulations.gov, including any personal 
information provided, and can be accessed by the public. All comments 
must include the agency name and docket number or Regulatory 
Information Number (RIN) for this rule. For detailed instructions on 
submitting comments and additional information, see https://www.regulations.gov. If you are submitting comments electronically 
through the Federal eRulemaking Portal and want to attach a document, 
we ask that it be in a text-based format. If you want to attach a 
document that is a scanned Adobe PDF file, it must be scanned as text 
and not as an image, thus allowing FCIC to search and copy certain 
portions of your submissions. For questions regarding attaching a 
document that is a scanned Adobe PDF file, please contact the RMA Web 
Content Team at (816) 823-4694 or by e-mail at 
rmaweb.content@rma.usda.gov.
    Privacy Act: Anyone is able to search the electronic form of all 
comments received for any dockets by the name of the individual 
submitting the comment (or signing the comment, if submitted on behalf 
of an association, business, labor union, etc.). You may review the 
complete User Notice and Privacy Notice for Regulations.gov at https://www.regulations.gov/#!privacyNotice.

FOR FURTHER INFORMATION CONTACT: Director, Product Administration and 
Standards Division, Risk Management Agency, United States Department of 
Agriculture, Beacon Facility, Stop 0812, Room 421, P.O. Box 419205, 
Kansas City, MO 64141-6205, telephone (816) 926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be non significant for the 
purposes of Executive Order 12866 and, therefore, it has not been 
reviewed by the OMB.

Paperwork Reduction Act of 1995

    Pursuant to the provisions of the Paperwork Reduction Act of 1995 
(44 U.S.C. chapter 35), the collections of information in this rule 
have been approved by the Office of Management and Budget (OMB) under 
control number 0563-0053.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act of 2002, 
to promote the use of the Internet and other information technologies 
to provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. This rule contains no Federal mandates (under the 
regulatory provisions of title II of the UMRA) for State, local, and 
tribal governments or the private sector. Therefore, this rule is not 
subject to the requirements of sections 202 and 205 of UMRA.

Executive Order 13132

    It has been determined under section 1(a) of Executive Order 13132, 
Federalism, that this rule does not have sufficient implications to 
warrant consultation with the States. The provisions contained in this 
rule will not have a substantial direct effect on States, or on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.

Executive Order 13175

    This rule has been reviewed in accordance with the requirements of 
Executive Order 13175, Consultation and Coordination with Indian Tribal 
Governments. The review reveals that this regulation will not have 
substantial and direct effects on Tribal governments and will not have 
significant Tribal implications.

Regulatory Flexibility Act

    FCIC certifies that this regulation will not have a significant 
economic impact on a substantial number of small entities. Program 
requirements for the Federal crop insurance program are the same for 
all producers regardless of the size of their farming operation. For 
instance, all producers are required to submit an application and 
acreage report to establish their insurance guarantees and all 
producers are required to submit a notice of loss and production 
information to determine the amount of an indemnity payment in the 
event of an insured cause of crop loss.

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Whether a producer has 10 acres or 1000 acres, there is no difference 
in the kind of information collected. To ensure crop insurance is 
available to small entities, the Federal Crop Insurance Act authorizes 
FCIC to waive collection of administrative fees from limited resource 
farmers. FCIC believes this waiver helps to ensure that small entities 
are given the same opportunities as large entities to manage their 
risks through the use of crop insurance. A Regulatory Flexibility 
Analysis has not been prepared since this regulation does not have an 
impact on small entities, and, therefore, this regulation is exempt 
from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605).

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order 12988

    This proposed rule has been reviewed in accordance with Executive 
Order 12988 on civil justice reform. The provisions of this rule will 
not have a retroactive effect. The provisions of this rule will preempt 
State and local laws to the extent such State and local laws are 
inconsistent herewith. With respect to any direct action taken by FCIC 
or to require the insurance provider to take specific action under the 
terms of the crop insurance policy, the administrative appeal 
provisions published at 7 CFR part 11 must be exhausted before any 
action against FCIC for judicial review may be brought.

Environmental Evaluation

    This action is not expected to have a significant economic impact 
on the quality of the human environment, health, or safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

Background

    FCIC proposes to amend the Catastrophic Risk Protection Endorsement 
(7 CFR part 402), to be effective for the 2013 and succeeding crop 
years. The proposed changes are as follows:
    1. FCIC proposes to revise the paragraph immediately preceding 
section 1 which refers to the order of priority in the event of a 
conflict to include the actuarial documents and the Commodity Exchange 
Price Provisions, if applicable, in the order of priority.
    2. Section 1--FCIC proposes to remove the definitions of ``approved 
yield,'' ``county,'' ``FSA,'' ``household,'' ``limited resource 
farmer,'' and ``USDA'' because these terms are already defined in the 
applicable Basic Provisions.
    FCIC also proposes to remove the definition of ``expected market 
price'' because the term is no longer applicable to any plan of 
insurance for which catastrophic risk protection coverage is available 
(e.g., the Yield Protection plan of insurance uses a projected price).
    FCIC proposes to remove the definition of ``Secretary'' because the 
term is not used in the Endorsement.
    3. Section 2--FCIC proposes to revise section 2(a)(1) to clarify 
catastrophic risk protection coverage is not available under individual 
revenue plans of insurance such as Revenue Protection and Revenue 
Protection with Harvest Price Exclusion plans of insurance.
    FCIC proposes to revise section 2(a)(2) to allow the Group Risk 
Plan of Insurance Basic Provisions, or its successor provisions, to 
elect the Catastrophic Risk Protection Endorsement. FCIC also proposes 
to clarify that catastrophic risk protection coverage is not available 
under area revenue plans of insurance such as Group Risk Income 
Protection--Harvest Price Option or Group Risk Income Protection plans 
of insurance or successor plans of insurance.
    4. Section 3--FCIC proposes to revise section 3(a) to clarify this 
section is not applicable if the policyholder elected catastrophic risk 
protection coverage under the Group Risk Plan of Insurance Basic 
Provisions (7 CFR 407.9) and Crop Provisions, or its successor 
provisions. The Group Risk Plan of Insurance Basic Provisions and Crop 
Provisions do not have unit provisions. Therefore, the unit division 
provisions in section 3 cannot be used in lieu of the unit provisions 
of the Group Risk Plan of Insurance Basic Provisions.
    5. Section 4--FCIC proposes to revise section 4(a) to allow the 
actuarial documents to revise the amount of protection offered under 
catastrophic risk protection coverage in the event this amount is 
changed in the future by Congress.
    FCIC proposes to revise section 4(a) to replace the reference to 
``expected market price'' with ``price election or projected price, as 
applicable.''
    FCIC also proposes to revise section 4(a) to include information 
regarding the amount of protection a policyholder would receive if they 
elected catastrophic risk protection coverage under the Group Risk Plan 
of Insurance Basic Provisions or successor provisions. Currently, 
section 4(a) simply contains the catastrophic risk protection amount of 
coverage for policyholders insured under the Common Crop Insurance 
Policy. The information regarding the amount of catastrophic risk 
protection coverage for area yield plans is contained in the Group Risk 
Plan of Insurance Basic Provisions because section 4(a) of the 
Endorsement allows FCIC to determine a comparable amount of coverage. 
This change will place all the provisions regarding the catastrophic 
risk protection amount of coverage in one place.
    FCIC proposes to revise section 4(b) to replace the reference to 
``expected market price'' with ``price election.''
    FCIC proposes to revise section 4(c) to replace the reference to 
``Actuarial Table or the Special Provisions'' with ``actuarial 
documents.'' With the implementation of the new information technology 
system, FCIC will no longer have actuarial tables; all the information 
previously contained in the actuarial tables will now be contained in 
the actuarial documents filed electronically on RMA's Web site.
    FCIC proposes to remove section 4(d) because information regarding 
the percentage of loss in applicable yield a policyholder must have 
suffered to be eligible for an indemnity is contained in section 4(a) 
which contains the coverage level. The amount determined by subtracting 
the coverage level from 100 percent is the amount of loss a 
policyholder must suffer before an indemnity is paid under catastrophic 
risk protection coverage.
    6. Section 6--FCIC proposes to revise sections 6(b) and 6(b)(1) to 
replace the reference to ``Special Provisions'' with ``actuarial 
documents.''
    Section 7--FCIC proposes to remove section 7(b) because undivided 
interest will no longer be available as a result of the USDA Acreage 
Crop Reporting Streamlining Initiative to establish common USDA data 
standards to support producer commodity reporting in support of USDA 
programs. FCIC also proposes to remove those provisions that suggest 
that approved insurance providers have the option to not offer 
catastrophic risk protection coverage. All approved insurance providers 
must offer catastrophic risk protection coverage for the policies they 
sell.
    7. Section 9--FCIC proposes to revise section 9 to clarify the 
price references to include projected prices, dollar amounts of 
insurance, or dollar amounts

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of protection because the term ``price election'' is not applicable to 
all plans of insurance.

List of Subjects in 7 CFR Part 402

    Crop insurance, Reporting and recordkeeping requirements.

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation proposes to amend 7 CFR part 402 as follows:

PART 402--CATASTROPHIC RISK PROTECTION ENDORSEMENT

    1. The authority citation for 7 CFR part 402 continues to read as 
follows:

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

    2. Amend Sec.  402.4 as follows:
    a. Revise introductory text preceding section 1;
    b. Remove the definitions in section 1 for ``approved yield,'' 
``county,'' ``expected market price,'' ``FSA,'' ``household,'' 
``limited resource farmer,'' ``Secretary,'' and ``USDA;''
    c. Revise section 2(a) introductory text;
    d. Revise section 3(a);
    e. Revise section 4(a);
    f. Amend section 4(b) by removing the phrase ``expected market 
price'' and adding the phrase ``price election'' in its place;
    g. Amend section 4(c) by removing the phrase ``Actuarial Table or 
the Special Provisions'' and adding the phrase ``actuarial documents'' 
in its place;
    h. Remove section 4(d);
    i. Amend section 6(b) introductory text by removing the phrase 
``Special Provisions'' and adding the phrase ``actuarial documents'' in 
its place;
    j. Amend section 6(b)(1) by removing the phrase ``Special 
Provisions'' and adding the phrase ``actuarial documents'' in its 
place;
    k. Revise section 7; and
    l. Amend section 9 by adding the phrase ``, projected prices, 
dollar amounts of insurance, or dollar amounts of protection'' after 
the phrase ``multiple price elections'' in the two instances that it 
appears.
    The revised text reads as follows:


Sec.  402.4  Catastrophic Risk Protection Endorsement Provisions.

* * * * *
    If a conflict exists among the policy provisions; the order of 
priority is: (1) This Endorsement; (2) the Special Provisions; (3) any 
other Actuarial Documents except the Special Provisions; (4) the 
Commodity Exchange Price Provisions, if applicable; and (5) any of the 
policies specified in section 2, with (1) controlling (2), etc.
* * * * *
    2. Eligibility, Life of Policy, Cancellation, and Termination.
    (a) You must have one of the following policies in force to elect 
this Endorsement:
    (1) The Common Crop Insurance Policy Basic Provisions (7 CFR 457.8) 
and applicable Crop Provisions (Catastrophic risk protection coverage 
is not available under individual revenue plans of insurance such as 
the Revenue Protection and Revenue Protection with Harvest Price 
Exclusion plans of insurance);
    (2) The Group Risk Plan of Insurance Basic Provisions (7 CFR 407.9) 
and applicable Crop Provisions, or its successor provisions, if 
available for catastrophic risk protection coverage (Catastrophic risk 
protection coverage is not available under area revenue plans of 
insurance such as Group Risk Income Protection--Harvest Price Option or 
Group Risk Income Protection plans of insurance or successor plans of 
insurance); or
    (3) Other crop policy only if catastrophic risk protection coverage 
is provided in the applicable crop policy.
* * * * *
    3. Unit Division.
    (a) This section is in lieu of the unit provisions specified in the 
applicable crop policy and is not applicable if you are insured under 
the Group Risk Plan of Insurance Basic Provisions (7 CFR 407.9) and 
applicable Crop Provisions, or its successor provisions.
* * * * *
    4. Insurance Guarantees, Coverage Levels, and Prices for 
Determining Indemnities.
    (a) Unless otherwise specified in the actuarial documents, 
catastrophic risk protection coverage will offer protection equal to:
    (1) Fifty percent (50%) of your approved yield indemnified at 
fifty-five percent (55%) of the price election or projected price, as 
applicable, if you are insured under the Common Crop Insurance Policy 
Basic Provisions (7 CFR 457.8) and applicable Crop Provisions;
    (2) Sixty-five percent (65%) of the expected county yield 
indemnified at forty-five percent (45%) of the maximum protection per 
acre if you are insured under the Group Risk Plan of Insurance Basic 
Provisions (7 CFR 407.9) and applicable Crop Provisions, or its 
successor provisions; or
    (3) A comparable coverage as established by FCIC for other crop 
policies only if catastrophic risk protection coverage is provided in 
the applicable crop policy.
* * * * *
    7. Insured Crop.
    (a) The crop insured is specified in the applicable crop policy, 
however notwithstanding any other policy provision requiring the same 
insurance coverage on all insurable acreage of the crop in the county, 
if you purchase additional coverage for a crop, you may separately 
insure acreage under catastrophic risk protection coverage that has 
been designated as ``high-risk'' land by FCIC, provided that you 
execute a High-Risk Land Exclusion Option and obtain a catastrophic 
risk protection coverage policy with the same approved insurance 
provider on or before the applicable sales closing date.
    (b) You will be required to pay a separate administrative fee for 
both the additional coverage policy and the catastrophic risk 
protection coverage policy.
* * * * *

    Signed in Washington, DC, on August 10, 2011.
William J. Murphy,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2011-20850 Filed 8-16-11; 8:45 am]
BILLING CODE 3410-08-P