Area Risk Protection Insurance Regulations and Area Risk Protection Insurance Crop Provisions, 38483-38531 [2013-15222]

Agencies

• DEPARTMENT OF AGRICULTURE
• Federal Crop Insurance Corporation

[Federal Register Volume 78, Number 123 (Wednesday, June 26, 2013)]
[Rules and Regulations]
[Pages 38483-38531]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-15222]



[[Page 38483]]

Vol. 78

Wednesday,

No. 123

June 26, 2013

Part III





Department of Agriculture





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Federal Crop Insurance Corporation





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7 CFR Part 407





Area Risk Protection Insurance Regulations and Area Risk Protection 
Insurance Crop Provisions; Final Rule

Federal Register / Vol. 78 , No. 123 / Wednesday, June 26, 2013 / 
Rules and Regulations

[[Page 38484]]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 407

[Docket No. FCIC-11-0002]
RIN 0563-AC25


Area Risk Protection Insurance Regulations and Area Risk 
Protection Insurance Crop Provisions

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the 
Area Risk Protection Insurance (ARPI) Basic Provisions, ARPI Barley 
Crop Insurance Provisions, ARPI Corn Crop Insurance Provisions, ARPI 
Cotton Crop Insurance Provisions, ARPI Forage Crop Insurance 
Provisions, ARPI Grain Sorghum Crop Insurance Provisions, ARPI Peanut 
Crop Insurance Provisions, ARPI Soybean Crop Insurance Provisions, and 
ARPI Wheat Crop Insurance Provisions to provide area yield protection 
and area revenue protection. These provisions will replace the Group 
Risk Plan (GRP) provisions in 7 CFR part 407, which includes the: GRP 
Basic Provisions, GRP Barley Crop Provisions, GRP Corn Crop Provisions, 
GRP Cotton Crop Provisions, GRP Forage Crop Provisions, GRP Peanut Crop 
Provisions, GRP Sorghum Crop Provisions, GRP Soybean Crop Provisions, 
and GRP Wheat Crop Provisions. The ARPI provisions will also replace 
the Group Risk Income Protection (GRIP) Basic Provisions, the GRIP Crop 
Provisions, and the GRIP-Harvest Revenue Option (GRIP-HRO). The GRP and 
GRIP plans of insurance will no longer be available. The intended 
effect of this action is to offer producers a choice of Area Revenue 
Protection, Area Revenue Protection with the Harvest Price Exclusion, 
or Area Yield Protection, all within one Basic Provision and the 
applicable Crop Provisions. This will reduce the amount of information 
producers must read to determine the best risk management tool for 
their operation and will improve the provisions to better meet the 
needs of insureds. The changes will apply for the 2014 and succeeding 
crop years.

DATES: This rule is effective June 26, 2013.

FOR FURTHER INFORMATION CONTACT: Tim Hoffmann, 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 Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated a ``significant regulatory 
action'' although not economically significant, under section 3(f) of 
Executive Order 12866. Accordingly, the rule has been reviewed by the 
Office of Management and Budget.

Benefit-Cost Analysis

    A Benefit-Cost Analysis has been completed and a summary is shown 
below; the full analysis may be viewed on https://www.regulations.gov. 
In summary, the analysis finds that changes in the rule will have an 
expected savings of $705,722 to the government in administration of the 
Federal Crop Insurance program; a cost of slightly over $488,255 to 
producers; and a cost of slightly over $1 million to insurance 
providers.
    Combining area yield protection (protection for production losses 
only) and area revenue protection (protection against loss of revenue 
caused by low prices, low yields, or a combination of both) within one 
Basic Provisions and the applicable Crop Provisions will minimize the 
quantity of documents needed to describe the contract between the 
insured and the insurance provider. An insured benefits because he or 
she will not receive several copies of largely duplicative material as 
part of the insurance contracts for crops insured under different plans 
of insurance. Insurance providers benefit because there is no need to 
maintain inventories of similar materials. Handling, storing and 
mailing costs are reduced to the extent that duplication of Basic or 
Crop Provisions is eliminated. Benefits accrue due to avoided costs 
(resources employed for duplicative effort), which are intangible in 
nature. These changes will increase the efficiency of the insurance 
provider by eliminating the need to maintain and track separate forms, 
and by eliminating the potential for providing an incorrect set of 
documents to an insured by inadvertent error.
    The GRIP plan of insurance currently uses a market-price discovery 
method to determine prices. This rule uses this same method for 
determining prices for both area revenue protection and area yield 
protection. The benefits of this action primarily accrue to FCIC, which 
will no longer be required to make two estimates of the respective 
market price for these crops. Insurance providers benefit because they 
no longer will be required to process two releases of the expected 
market price for a crop year. Insureds also benefit because the price 
at which they may insure the crops included under GRP yield protection 
should more closely approximate the market value of any loss in yield 
that is subject to an indemnity, and insureds will not have to analyze 
potential differences in price in deciding between area revenue or area 
yield protection. There are essentially no direct costs for this change 
since the market-price price discovery mechanism already exists and is 
in use for the GRIP plan of insurance. All required data is available 
and similar calculations are currently being made.
    These changes will simplify administration of the crop insurance 
program, reduce the quantity of documents and electronic materials 
prepared and distributed, better define the terms of coverage, provide 
greater clarity, and reduce the potential for waste, fraud, and abuse.

Paperwork Reduction Act of 1995

    Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 
35), an information collection package was submitted to OMB for review 
at the time the proposed rule was published and assigned OMB Control 
number 0563-0083. The information collection and recordkeeping 
requirements contained in this final rule will not be effective until 
the final information collection package is approved by OMB.

E-Government Act Compliance

    FCIC is committed to complying with the E-Government Act, 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

[[Page 38485]]

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 compute 
premium amounts. 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 (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 final 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 or 7 CFR part 400, subpart J for 
the informal administrative review process of good farming practices as 
applicable, 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

    This rule finalizes the Area Risk Protection Insurance (ARPI) Basic 
Provisions, ARPI Corn Crop Insurance Provisions, ARPI Cotton Crop 
Insurance Provisions, ARPI Forage Crop Insurance Provisions, ARPI Grain 
Sorghum Crop Insurance Provisions, ARPI Peanut Crop Insurance 
Provisions, ARPI Soybean Crop Insurance Provisions, ARPI Wheat Crop 
Provisions to provide area yield protection and area revenue protection 
in one policy and to make other changes that were published by FCIC on 
July 22, 2011, as a notice of proposed rulemaking in the Federal 
Register at 76 FR 44200-44224. The public was afforded 60 days to 
submit comments after the regulation was published in the Federal 
Register.
    A total of 384 comments were received from 48 commenters. The 
commenters were producers, insurance agents, insurance providers, an 
insurance service organization, grower associations, universities, and 
other interested parties.
    The public comments received regarding the proposed rule and FCIC's 
responses to the comments are listed below (under applicable subject 
headings) identifying issues and concerns, and the changes made, if 
any, to address the comments.

Background

1. Proposed Policy
    Comment: A commenter stated, with respect to proposed policy 
changes, it is difficult to comment on proposed provisions that include 
references to information in the Special Provisions and/or actuarial 
documents not included in the proposal. The commenter recommended that 
when FCIC releases policy revisions for public examination, FCIC should 
include a sample of the anticipated Special Provisions/actuarial 
documents for review and comment. Without such information, interested 
parties cannot offer comments as meaningful as they otherwise would.
    Response: FCIC understands the commenters concerns about having 
additional information to reference to the proposed provisions. 
However, these statements provide information or exceptions to the 
provisions in the Basic Provisions or Crop Provisions that can vary by 
state and county. Therefore, it would be impractical to include all of 
these statements in the rule. Further, this rule is a combination of 
the various area plans of insurance so the Special Provision and 
actuarial document statements will be similar.
    Comment: A commenter expressed their appreciation for the 
opportunity to comment on the proposed rule to replace GRP and GRIP 
with ARPI. The commenter expressed agreement with combining these two 
policies and stated that it made sense by reducing paperwork and labor.
    Response: FCIC appreciates the support for its efforts and agrees 
combining GRP and GRIP into one program will be beneficial.
    Comment: Several commenters stated their appreciation of FCIC's 
efforts to provide an area-wide crop insurance product for the major 
crops. The commenters also stated FCIC's decision in putting yield and 
revenue protection into one basic insurance policy was a wise use of 
resources. However, the commenters expressed concern about ARPI not 
being offered in all areas where the crops insured under ARPI may be 
grown. One commenter would like ARPI available for all the major crops 
grown in Louisiana and have it

[[Page 38486]]

available for all parishes. The commenter suggested if sufficient 
information is not available to offer the policy in a given parish, 
then the area should be expanded to multiple parishes or to the crop 
reporting districts to provide coverage.
    Response: FCIC appreciates the support for its efforts. ARPI was 
written to provide FCIC with the flexibility to modify how it makes 
area plan offers in the future including on a basis beyond a single 
county, parish, etc. FCIC will continue to evaluate and consider where 
and how it expands area plans of insurance.
2. Price Determinations
    Comment: Several comments were received regarding the pricing for 
the new area plans of insurance in the Crop Exchange Price Provisions 
for ARPI (CEPP-ARPI). A commenter noted the new plans of insurance 
would use futures contract prices from commodity exchange markets, 
which are well studied and established as unbiased and efficient in 
utilizing all the information available to market participants. The 
commenter further noted a single projected price would be used in all 
three new area plans of insurance. Finally, the commenter noted the new 
area plans of insurance would use the same insurance prices for 
individual plans of insurance corresponding to the same sales closing 
date. All these changes regarding insurance prices should help simplify 
and streamline the program. The commenter would encourage FCIC to make 
use of the same CEPP for area and individual plans of insurance instead 
of maintaining two separate CEPPs, as this will eliminate the potential 
for errors or discrepancies of maintaining two CEPPs. Another commenter 
stated matching the price discovery period for area and individual 
plans for the same crop is a good idea and creates less confusion. 
Another commenter recommended adding Alabama, Florida, South Carolina, 
and Virginia to the list of states with specific dates in determining 
the cotton projected and harvest price.
    Response: The CEPP-ARPI was provided for comment as a courtesy to 
the public and is not a part of the regulation published in the Code of 
Federal Regulations. It is not subject to the formal notice and comment 
rulemaking process, and as a result, FCIC is not publishing responses 
to all of these comments in the final rule. The proposed CEPP-ARPI 
allowed for a single projected price for all area plans of insurance 
but not the same price by crop between the area plans and individual 
plans of insurance. FCIC agrees with the commenters that the use of one 
CEPP to establish a common crop price between all plans of insurance 
would be more efficient and less confusing. Instead of maintaining a 
separate CEPP for ARPI, FCIC will update the CEPP used for the Common 
Crop Insurance Policy (7 CFR 457.8) to establish pricing for both 
individual and area plans of insurance. FCIC thanks the public for 
their assistance in reviewing the CEPP and will consider all comments 
received and make appropriate changes in the CEPP. FCIC has revised the 
provisions to replace the term ``CEPP-ARPI'' with the term ``CEPP'' 
everywhere it appears in the provisions.
    Comment: A commenter stated the term ``price'' as it relates to the 
volume of the contract should be renamed ``contract volume.'' This 
verbiage is much easier for a producer to understand. When a producer 
selects a coverage level of 85 percent and a price of 150 percent, what 
he is really doing is selecting 85 percent coverage on 180 bushels per 
acre in a county that has a base yield of 120. Allowing these contracts 
to be uniform will reduce the error rate of the agency and reduce 
producer confusion.
    Response: FCIC is unsure of what provisions the commenter is 
referencing, as ``price'' is not a defined term. The projected price 
and harvest price are based off futures contract of commodity exchange 
markets. Producers cannot select more than 100 percent of the price. 
FCIC presumes that the commenter is referring to the protection factor 
of 120 percent. However, this is not a price election, nor does it 
change the deductible or trigger for an indemnity. It is simply a means 
to allow producers to better tailor the coverage to their individual 
risk. FCIC is unsure of what the commenter meant when stating, 
``Allowing these contracts to be uniform will reduce the error rate of 
the agency'' and, therefore, FCIC cannot respond to this suggestion. No 
changes have been made.
3. Barley and Peanuts
    Comment: Several comments were received regarding FCIC's decisions 
to not provide ARPI coverage for barley and peanuts. Commenters 
understand that producers have shown a preference for individual crop 
insurance coverage but peanuts should not be excluded from ARPI. The 
commenters stated there is potential for area risk protection to be 
beneficial for producers in certain situations including producers 
without a yield history, irrigated farms, and farms whose yields track 
well with the county yield. The commenters stated area-based insurance 
is generally cheaper than individual-based insurance and with more 
education from agents then more producers would utilize it. Commenters 
believe the contract price provision for the individual yield 
protection policy gives it the upper hand over area plans. Also the 
lower commissions to agents probably discourage sales as well as the 
risk of an individual loss. Commenters stated peanut producers would 
like to have revenue insurance like cotton. Commenters stated revenue 
insurance is under investigation by a couple of producer groups to 
determine a pricing method for peanuts. A commenter believes ARPI has 
potential for coverage of peanuts, once a better pricing method is 
developed so that ARPI and the Common Crop Insurance Policy are on 
equal footing as far as price election. Another commenter stated FCIC 
should be sensitive to comments from insurance providers and producers 
concerning the proposal not to include barley and peanut coverage under 
the ARPI program. It is important for FCIC to ascertain whether or not 
there is any producer interest in ``area'' coverage for these crops. 
Another commenter stated they understand there has not been any GRP 
coverage offered on these two crops in recent years due to limited 
interest, but questions if FCIC has done an assessment or review of 
producer interests in insuring these crops under ARPI.
    Response: In response to the commenters' requests to include barley 
and peanuts under ARPI, FCIC has added ARPI Barley Crop Provisions and 
ARPI Peanut Crop Provisions to this rule.
4. Insuring Other Crops--No Written Agreements
    Comment: Several comments were received regarding FCIC's decision 
to not allow written agreements for ARPI. One commenter stated they 
have no objection in principle to simplifying area coverage by not 
including provisions allowing for written agreements. However, in order 
to judge the impact of this decision on the market, it would be 
beneficial for FCIC to provide information regarding how many written 
agreements have been requested to insure hybrid seed corn, hybrid 
sorghum seed, popcorn, sweet corn, or other specialty corn (e.g. high-
amylose, flint, flour, Indian, blue corn, wildlife-adapted, or any 
open-pollinated varieties) under the GRP and GRIP policies, and how 
many of those were approved. The commenter further stated since 
producers growing these crops will not be allowed to have area-based

[[Page 38487]]

coverage unless the crops are subsequently added under ARPI; FCIC 
should address how many producers are likely to be disadvantaged by 
this decision. The commenter questioned why is it being proposed to 
allow coverage for hybrid seed corn and hybrid sorghum seed under the 
ARPI program but not the other various types of corn that were 
previously allowed to have area coverage via the written agreement 
process. The commenter also questioned if FCIC plans to remove the GP 
Type from the Written Agreement Handbook in conjunction with this 
proposed change under the ARPI program. Another commenter questioned 
FCIC's intention to allow others crops to be insured under ARPI through 
the Special Provisions, and suggested FCIC include a reference to this 
intent in the policy. The commenter stated they would rather not see 
other crops insured under ARPI, as they believe these other crops are 
better served by individual plans of insurance.
    Response: The overall number of GRP and GRIP written agreements has 
been less than one percent of the total GRP/GRIP policies earning 
premium each year. The number of approved written agreements out of GRP 
policies was 35 of 16,750 in 2007, 42 of 20,670 in 2008, 37 of 14,704 
in 2009, 30 of 10,502 in 2010, 27 of 9,701 in 2011, and 29 of 8,822 in 
2012. The number of approved written agreements out of GRIP policies 
was 302 of 39,651 in 2007, 216 of 24,116 in 2008, 248 of 21,746 in 
2009, 189 of 17,009 in 2010, 202 of 14,306 in 2011, and 138 of 10,022 
in 2012. Crops such as hybrid seed corn and hybrid sorghum seed could 
be insurable under the ARPI Crop Provisions because the data for these 
crops is collected by the National Agricultural Statistics Service and 
is included in the yield estimates for corn and grain sorghum. The 
reference to GP Type written agreements will be removed from FCIC 
issued procedures including the Written Agreement Handbook. The ARPI 
Crop Provisions already have provisions that allow insurance for other 
crops if specified on the Special Provisions. The applicable ARPI Crop 
Provisions specify that hybrid seed corn and hybrid sorghum seed is not 
insurable under ARPI unless specified in the Special Provisions as 
insurable.
5. Calculations
    Comment: Several commenters noted the new ARPI proposed rule 
maintains the ``multiplier'' concept from GRP and GRIP so that 
producers with above average yields can get higher protection and 
renames the ``multiplier'' as ``protection factor.'' They noted the 
maximum protection factor a producer can select is reduced from 1.5 to 
1.2 in the proposed rule. Also, the proposal rule introduces a new 
concept called ``total loss factor'' (TLF) which is described as 
accounting for lower county variation compared to an individual 
producer's variation. They noted it seems that there is a single value 
for TLF for each county, and this may change county to county. The 
example in the proposed rule used 0.82 for the TLF. The preamble to the 
proposed rules states ``The combination of reducing the protection 
factor to 120 and adding a total loss factor allows for ARPI coverage 
to not appear overstated but also recognizes, at certain thresholds, a 
total loss is likely to have occurred and ultimately results in overall 
coverage with respect to premium and indemnities to be similar to that 
previously provided by GRP and GRIP.''
    The commenters stated that FCIC's reasoning in the quoted passage 
is not convincing. The commenters stated they worked through the total 
indemnity formulas (see the Appendix) and verified that reducing the 
protection factor to 1.2 would still accommodate the possibility of 
total loss in a county because the disappearing deductible feature of 
area plans is maintained in ARPI. They stated that under the existing 
GRP and GRIP policies, selecting an amount of protection higher than 
1.2 would scale up the liability, premium, and indemnity equally, so 
that the loss ratio would remain the same. Then in that situation, a 
producer had to pay higher premium to choose a protection factor higher 
than 1.2. Whereas, with a built-in TLF, the producer obtains free 
protection unless the premium rates are properly adjusted (see the 
example below). The commenters stated the proposed rule provides no 
information with regard to this issue and requested that, at a minimum, 
more transparency on the impact of introduction of TLF on premium rates 
is warranted.
    The commenters analyzed the example provided where the producer is 
assumed to choose a protection factor of 1.1 and coverage level of 75%. 
The premium rates for the parameters of the example are 0.0166 for 
ARPI, 0.0146 for ARPI-HPE, and 0.0116 for AYP. If setting TLF to 1 then 
this would be equal to GRP and GRIP, which has no TLF. The indemnities 
on this basis are shown in Table 1.

                          Table 1--The Impact of Total Loss Factor (TLF) on Indemnities
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                                                                                                     Indemnity
                                                                                                     increase
                                                                       TLF=1         TLF=0.82       (Decrease)
                                                                                                     (percent)
----------------------------------------------------------------------------------------------------------------
ARPI............................................................          20,812          26,346              27
ARPI-HPE........................................................          11,946          15,718              32
AYPI............................................................          18,216          23,968              32
----------------------------------------------------------------------------------------------------------------

    The commenters stated that from Table 1, the producer sees on 
average 30% (approximately) increase in indemnities. There is no 
information provided on how the premium rates accounted (if any) for 
that. If the producer would choose the maximum protection factor (under 
no TLF case), that is, protection factor going up from 1.1 to 1.5 (36% 
increase) while holding the coverage level at 75%, then the final 
policy protection, and therefore premium and indemnity (under TLF=1 
column above), would go up about 36%.
    The commenters stated that theoretically, under actuarially fair 
premium rates, a producer's demand for coverage with area insurance is 
the producer's beta (Bulut, Collins, Zacharias, 2011; Miranda, 1991). 
Producer's beta is defined as the correlation between the producer's 
loss and area loss multiplied by the standard deviation of farmer's 
loss divided by the standard deviation of area loss. A producer with a 
higher variation of loss relative to that of the area would demand 
higher coverage with area plan. Nevertheless, a built-in total loss 
factor provides extra coverage to every producer, ignoring the fact 
that some producers may have lower variation relative to the county 
level and would need less coverage.

[[Page 38488]]

    The commenters then stated that in order to understand the 
magnitude of premium rate adjustments (if any) due to the TLF; the 
details of the cost-benefit analysis would be useful. However, the 
analysis could not be found at the designated Web site.
    The commenters also had several fundamental concerns with the 
concept of protection factors and the TLF presented in the proposed 
rule. The commenters stated that while the limitation of the protection 
factor to a maximum of 1.20 does succeed in reducing the maximum amount 
of protection per acre as compared to the existing GRP and GRIP plans, 
the TLF counters this by the way in which it determines payouts for a 
given percentage of loss. Under existing plans, the total policy 
protection is paid out only if the county experiences a 100 percent 
loss. The deductible disappears in its entirety only when a total loss 
occurs. Under the new plans, the total policy protection is paid out 
even in cases where a total loss has not occurred. In the example in 
which the TLF is 0.82, the total policy protection is paid out when the 
percentage loss in the county equals or exceeds 82%. This is not at all 
similar to the coverage provided under GRP and GRIP.
    The commenters objected to FCIC's decision to pay out the total 
policy protection in situations in which the loss is significantly less 
than a total loss. The commenters were not convinced that this is 
either necessary or in the best interests of the program. The 
disappearing deductible feature in the current GRP and GRIP policies 
already provides more protection than is available under individual 
risk protection policies, and it should be more than sufficient to 
enable producers to design effective risk management solutions for 
their farming operations. Paying a loss equal to the total policy 
protection when 18% of the crop is still in the field and available to 
be harvested creates an opportunity for producers to profit (i.e., 
recover more than 100% of the crop's value) under the new insurance 
policy. The commenters stated this is not consistent with congressional 
intent to provide risk protection.
    The commenters further stated that, in addition, consistent with 
their objection to the 1.50 multiplier in the GRP and GRIP programs, 
they objected to the inclusion of a protection factor that permits the 
producer to potentially over-insure the crop. In the aggregate, this 
could result in total indemnity payments for a county in excess of the 
total value of the crop. Given the new requirement for the producer to 
provide his production information, this problem could be mitigated by 
requiring the producer to support his selected protection factor based 
on his yield in relation to the county yield. This shortcoming should 
be corrected prior to implementation of the new program.
    The commenters stated FCIC's justification for the total loss 
factor is that it compensates for the decreased variation in county 
yields relative to the individual producer. They found this argument 
unconvincing. The real world effect of this provision is to provide 
additional payments to producers in deminimis yield situations. If this 
is the actual rationale for making this change, then FCIC should be 
upfront about this. However, regardless of the justification for this 
change, this provision is inconsistent with the intended purpose for 
the area plan program. Area plan coverage is intended to protect 
against yield shortfalls affecting the county as a whole. As designed, 
the total loss factor provision over compensates producers for their 
loss. This will benefit each producer to a different extent, depending 
on the producer's residual yield. Some producers will, in effect, be 
compensated for harvesting the remainder of the crop, while others will 
be overcompensated for their loss. This will have unintended effects on 
production decisions. More importantly, FCIC's action to compensate 
producers for harvesting costs in deminimis yield situations 
establishes an undesirable precedent for future revisions to the 
individual risk forms of coverage.
    Appendix: Consider a total indemnity calculation for ARPI-HPE: Use 
the following notation: Q\0\: Expected County Yield, Q\1\: Final County 
Yield, P0: Projected Price, P\1\: Harvest Price, ECR: Expected County 
revenue and ECR = Q\0\ x P\0\; FCR: final county revenue and FCR Q\1\ x 
P\1\; denote the coverage choice with y, denote scale choice with z 
whose maximum is now reduced to 1.2, FPP final policy protection FPP = 
ECR x a x s x z, PF: payment factor (per acre indemnity), and TIP = FPP 
x PF total indemnity payments then TIP = FPP x PF.
    The effect of TLF shows up in the payment factor (also called per 
acre indemnity) calculation.
[GRAPHIC] [TIFF OMITTED] TR26JN13.002

Because TLF is less than 1 (FCIC takes 0.82 in their example), the 
denominator in the payment factor calculation goes down, therefore, per 
acre indemnity goes up. Note that setting TLF = 1 would give the ``no 
TLF'' case.

    Rearranging equation (1) yields
    [GRAPHIC] [TIFF OMITTED] TR26JN13.003
    
In the preceding equation, when the county loss (1 - FCR/ECR) equals 
TLF, then the payment factor (PF) would be 100%, verifying the 
definition of TLF. If the county loss is greater than TLF, the PF would 
be greater than 1. In that situation, the PF would effectively be 
capped at 1.00 since the definition of TLF states that the total 
indemnity is capped at the final policy protection. In the absence of 
TLF, that is, TLF = 1, the PF is less than 1 except the total loss case 
where the PF would be 1.
    Response: As the commenters noted FCIC proposed using a total loss 
factor of 0.82 which is used in the payment factor calculation 
expressed as (1-total loss factor) resulting in 0.18. To improve 
clarity and use a more appropriate term for its use, FCIC has changed 
the term ``total loss factor'' to be ``loss limit factor'' and will 
simplify the payment factor calculation by eliminating the (1-total 
loss factor) as the loss limit factor will be 0.18. FCIC revised the 
payment factor calculations in sections 11 and 30 of the ARPI Basic 
Provisions to reflect these changes.

[[Page 38489]]

[GRAPHIC] [TIFF OMITTED] TR26JN13.004

    In regards to the commenters concerns with the total loss factor 
providing overcompensation, FCIC designed the ARPI policy in a way that 
allowed the protection factor (formerly ``multiplier'') to be reduced 
but still provide an effective level of risk protection. An example of 
this is shown in the nearby graph. The example compares the indemnities 
for the current GRP policy and the proposed ARPI policy. The example 
assumes a 90 percent coverage level and a protection factor of 1.5 for 
GRIP and 1.2 for ARPI, the maximum allowed for either policy. This 
example represents the most common coverage choice by producers who 
purchased GRIP policies. The new loss limit factor for ARPI in this 
example is set at 0.18, meaning that the ARPI policy will pay out its 
maximum indemnity limit when the county yield or revenue falls 82 
percent below its expected county level. FCIC intends for the loss 
limit factor to be the same for all counties. As can be seen in the 
graph, any loss beyond this level no longer affects the amount paid 
out.
    In this example, both policies pay out the same amount for the same 
loss up to 82 percent. Beyond 82 percent, the indemnity payments for 
the two policies diverge with ARPI no longer paying out since the 
coverage was limited to paying no more than 120 percent of the expected 
county revenue (county expected yield times projected price) and GRIP 
increasing up to 150 percent of expected county revenue beyond a loss 
of 82 percent in a county.
    This example demonstrates how the loss limit factor enables ARPI to 
provide an equivalent amount of risk protection for most levels of loss 
as the current GRIP policy, even though the maximum protection factor 
for ARPI (1.2) is lower than for GRIP (1.5).
    County wide production losses greater than 82 percent are 
relatively rare. However, should such losses occur, the smaller maximum 
protection factor for ARPI makes it less likely than GRIP to pay an 
amount that exceeds the actual loss experienced by the producer. The 
loss limit factor for ARPI has no relation to the de minimus yield 
issue associated with individual coverage. FCIC does not recognize or 
acknowledge de minimus yield in this product or any Federally reinsured 
plan of insurance. Over the years FCIC has been asked to consider using 
a de minimus yield for individual coverage, whereby when losses reach a 
certain level any remaining production would be ignored and not 
considered as production to count and a full indemnity be paid (e.g. an 
appraisal of 5 bushels per acre or less on a wheat policy would be 
ignored and considered as if no production remained). FCIC has not 
accepted or implemented a de minimus yield in its existing policies. 
Consistent with this approach, when losses reach a certain level for 
ARPI, no further indemnity payments are made. This is why, as shown in 
the previous graph, the payout for ARPI ceases to increase beyond a 
certain point as compared to the current GRP and GRIP policies. In 
other words, rather than ignoring production to count, ARPI is doing 
the opposite. It is, in effect, paying as if the county produced at 
least 18 percent of its expected level--regardless of how little 
production there really was. While the full liability under an ARPI 
policy may be paid, FCIC disagrees that the loss limit factor provides 
the opportunity for producers to profit by paying the total policy 
protection when some of the crop is still in the field and available 
for harvest. Individual farm revenues and yields are not considered 
under ARPI and it is possible that an individual farm may experience 
reduced revenue or reduced yield and not receive an indemnity under 
ARPI. An individual's loss situation is not determined by a loss 
adjustment appraisal under area-based plans of insurance. The overall 
average production in the county determines if there is a loss 
situation and whether an indemnity is due.
    As directed by the Act, FCIC will charge premium rates for ARPI 
that are sufficient to cover expected losses plus a reasonable reserve. 
The premium rates for ARPI are expected to be generally higher than for 
GRP or GRIP. However, the higher rates will be substantially offset by 
a reduction in liability resulting from the reduced maximum allowed 
protection factor. Because of this offset, the total premium charged to 
producers for coverage under ARPI is expected to be similar to the 
former GRP and GRIP policies.
    Comment: Many commenters stated they like the changes to the policy 
with one major exception; reducing the protection factor to 120 percent 
is not a sound idea. A commenter stated many of their insured producers 
find great value in the ability to protect up to 150 percent of the 
loss. The increased yield and price protection has given producers the 
support they want when they most need it even with higher premiums. 
Another commenter said the 150 percent protection factor helps to not 
only overcome yield variability but it also helps to purchase a higher 
level of price protection. The commenters stated when a producer 
purchases a revenue based crop insurance plan they are essentially 
purchasing a crop put option. Put options do not move penny for penny 
with the underlying futures price. This concept is referred to as 
delta. A delta of 0.5 means that for every one cent the futures move, 
the put option will move 0.5 cents. To overcome the impact of delta one 
can purchase more put options or in the case of GRIP can purchase a 
higher protection factor. A protection factor of 150 percent is ideal 
whereas a maximum protection of 120 percent leaves for more limited 
options. Furthermore, as long as the policy is rated accordingly to 
accommodate the 150 percent protection factor, there is little cost 
savings by reducing the factor. Another commenter stated the GRP and 
GRIP policies are easy to understand now and the proposed changes in 
the program will allow the government the ability to manipulate 
coverage and yield

[[Page 38490]]

data and the less government involvement the better. Another commenter 
stated the 1.2 multiplier is too restrictive for the area where their 
farm yields range from 75 percent to 160 percent of the county average, 
and some producers would be underinsured. Another commenter stated 
reducing the multiplier does not seem reasonable and recommended 
leaving the multiplier at 1.5, eliminating any coverage below 90 
percent, but allowing the percentage of price down to 70 percent to 
keep it simple. Another commenter stated they are not sure if reducing 
the protection factor and adding a total loss factor improves the 
policy, and may give producers an unrealistic sense that they are 
better protected than with individual protection. Another commenter 
suggested having a higher upper limit for the protection factor of 1.3, 
which would replicate the previous GRP and GRIP programs. Several 
commenters stated the protection factor should be maintained at a 
multiplier no lower than 1.2.
    Response: FCIC agrees that as long as the insurance product is 
rated accordingly, the 150 percent protection factor was actuarially 
sound for the area plans of insurance. However, FCIC received criticism 
that 150 percent was unreasonable as a representative yield for farms, 
even the highest-producing farms, and that the amount of insurance 
appeared excessive. There were concerns that subsidy was being paid on 
an amount of insurance that appeared excessive. Additionally, there 
were concerns that use of a county average yield meant that yields 
rarely reached the very low levels. The intent of the protection factor 
in ARPI is to allow producers who have yields higher or lower than the 
county average yield to insure a yield that is representative of their 
farm as compared to the average yield, and not to replicate a put 
option by allowing various spreads of prices. FCIC understands that 
producers would like to insure their crops for the highest amounts 
possible and FCIC believes that ARPI will need to be marketed 
differently than the old area plans to show producers that while the 
product is designed differently, it will work very similar to the old 
area plans of insurance. While the new protection factor is lower, the 
indemnities paid out by ARPI will be similar to the previous area plans 
of insurance due to the loss limit factor. The inclusion of the loss 
limit factor in the ARPI policy can offset the effect of the reduced 
multiplier and provide a level of risk protection that is similar to 
that provided by the current GRP and GRIP plans of insurance. Only in 
the rare occurrence of catastrophic loss do the payments between ARPI 
and GRP/GRIP diverge significantly, with ARPI payments being limited 
such that they are less likely to exceed the actual value of loss. As 
stated above, this is not like a de minimis yield in an individual plan 
of insurance which ignores remaining production. The loss limit factor 
simply states it is not paying out any more indemnity even if the yield 
falls below 18 percent. These two new methods of calculation for the 
insurance guarantee and the loss calculation should result in the 
insurance guarantee more closely matching a realistic farm value as 
well as no longer providing coverage that pays out any more indemnity 
when county average yields drops to a certain level. The payout of 
indemnities with the new calculations should be similar to the payout 
that occurred previously when there was a 150 percent protection factor 
except that ARPI is designed to never pay out more than 120 percent of 
the expected county yield or revenue when a county has a significant 
loss. Premium rates will be adjusted accordingly for the new 
calculations. FCIC agree with the commenters to offer a 1.2 protection 
factor, and will initially offer ARPI with a protection factor range of 
.80 to 1.20. FCIC has revised section 6(b)(1) of the ARPI Basic 
Provisions to make the protection factor this range unless otherwise 
specified in the Special Provisions instead of a factor shown on the 
actuarial documents. FCIC has also revised the definition of 
``protection factor'' to remove the reference to this factor being a 
percentage from those offered in the actuarial documents.
    Comment: A commenter stated the computation factor of the yield 
selected should be similar to how the Pasture Rangeland Forage (PRF) 
coverage is done. The PRF coverage ranges from 60 percent to 150 
percent of the base values. GRIP and GRP coverage is very confusing as 
100 percent of the policy is 150 percent of the base yield, as shown by 
the ``scalar'' of 1.5 in the contract. It would be simpler if producers 
could select 60 percent to 150 percent of the base coverage depending 
on their situation, just like the PRF contract. For example, if there 
is a county yield of 120 bushels per acre. The producers could purchase 
a coverage level of 70, 75, 80, 85, or 90 percent at 60 to 150 percent 
of the base county yield. He could select any coverage on a yield of 72 
to 180 bushels per acre.
    Response: ARPI has a different design and uses different 
terminology from PRF, but ARPI as proposed already has a multiplier 
(scalar) similar to PRF. The multiplier for ARPI is called the 
protection factor and essentially allows an insured to customize their 
guarantee to be either 80 percent or 120 percent of the expected county 
yield. The multiplier for PRF is called the productivity factor and is 
a range of 60 to 150 percent of the base county value. Given the 
different ways the programs operate, one based on vegetative growth or 
rainfall, and the other based on actual county yields, FCIC has 
determined that it is more appropriate to maintain the different 
multipliers. No change has been made.
    Comment: A commenter stated that FCIC's idea to pay 100 percent of 
the loss when the yield drops to a catastrophic level is not reasonable 
as area plans of insurance rarely, if ever, get to a catastrophic 
level. The commenter further stated this is simply not a good use of 
taxpayer's money for ``free'' catastrophic coverage to be included in 
the area plans of insurance.
    Response: FCIC agrees that area yields rarely drop to catastrophic 
levels, but disagrees that ARPI provides free catastrophic coverage. 
The coverage is not ``free'' as the commenter suggests because 
producers pay the portion after subsidy of the actuarially sound 
premium for the coverage except in the case of CAT coverage where they 
pay a fee. The loss limit factor is the loss level at which the ARPI 
policy no longer provides any more coverage, which is different from 
GRP/GRIP. ARPI and GRP/GRIP if compared would both pay out 120 percent 
of the expected county yield or revenue when the county has an 82 
percent loss. The major difference is that in the GRP/GRIP policies if 
the county yield is less than 18 percent of the expect county yield 
then more indemnity is paid out beyond 120 percent all the way to 
potentially paying out 150 percent of the expected county yield or 
revenue in the rare occurrence of a total county loss. Under ARPI, even 
if the county yield falls below 18 percent, no additional indemnity is 
paid.
    Comment: A commenter asked if the total loss factor would be 
published in the actuarial documents.
    Response: FCIC has replaced the term ``total loss factor'' with the 
term ``loss limit factor'' and modified the definition to state unless 
otherwise specified in the Special Provisions the factor is .18.
6. Production Record
    Comment: Many comments were received regarding FCIC's proposal to 
require production reporting for ARPI. One commenter stated that 
requiring producers to submit an annual production report could 
potentially kill

[[Page 38491]]

the program. Another commenter stated they selected area plans of 
insurance because there is no production information required and this 
allows producers to do the best they can to maximize yields and 
prevents fraudulent activity that goes on in the individual insurance 
policies. The commenter further stated that area plans save time with 
the only reviews being for acres, which the FSA 578 summary provides 
this evidence, and not having to spend time with a loss adjuster. The 
commenter further states they strongly disapprove of the production 
reporting change since production is irrelevant to the policy, can live 
with other aspects of the proposed changes if this reduces premium, but 
the production reporting requirement could force me out of the program. 
Another commenter stated the production reporting requirement removes 
the simplification advantage of area plans, and while it may improve 
accuracy of the program, it adds undue and unprecedented burden on the 
producers and agents. Another commenter stated if such data is needed 
for program integrity then maybe ARPI coverage should not be offered. 
The commenter further states GRP/GRIP only accounted for just over five 
percent of the total crop insurance liability and production reporting 
should be voluntary and without penalty. The commenter also asked why 
FCIC is not already collecting enough yield information from individual 
plans of insurance that the need for APRI data is minimal or 
unnecessary, and improvements need to be made to non-ARPI plans of 
insurance.
    Response: The lack of data is one of the biggest barriers to being 
able to provide area insurance products and current budgetary 
situations are causing some data series to be discontinued. Without 
unbiased, sufficient, and credible data sources, it is not possible to 
provide area insurance and existing programs could be discontinued due 
to changing data availability. When NASS county yield data is 
unavailable, this creates problems for calculating final county yields 
used for determinations of loss under area plans of insurance. In order 
to assure the integrity of ARPI, production reporting will provide FCIC 
with credible data to use in the determination of insurance offers and 
for determinations of loss at the end of the insurance period. 
Including production data from producers who insure under both area and 
individual policies improves the accuracy of the county yields. This 
reporting will allow FCIC to offer and maintain the program in more 
areas than may be possible utilizing only NASS county yields. Many 
producers already keep this information on a year-to-year basis and 
many insurance providers also maintain databases containing this 
information to use when producers need their actual production history 
(APH) when changing to an individual plan of insurance. FCIC is always 
considering ways to improve the collection of data and will consider 
future improvements to production reporting for individual plans of 
insurance. No change has been made.
    Comment: Several commenters questioned the current administrative 
and operating subsidy for area plans of insurance and believe the new 
requirement of producers submitting annual production reports should 
make the administrative and operating subsidy equal to individual plans 
of insurance. The commenters asked if compensation under the 
reinsurance agreement would be adjusted to reflect this additional 
workload.
    Response: While production reporting is a new requirement for area-
based plans of insurance, FCIC believes the production reporting 
requirement will have minimal additional administrative burden for area 
plans of insurance. The administrative and operating subsidy (A&O) 
reimburses insurance providers for much more than simple data 
collection, including loss adjustment which is minimal for the area 
plans of insurance. Any compensation changes would have to be addressed 
in reinsurance negotiations between FCIC and the insurance providers, 
as the request is outside the scope of this regulation.

7 CFR Part 407

Section 407.2 Availability of Federal Crop Insurance
    Comment: Many commenters questioned the language in section 407.2 
(b) which states that, ``the contract contained in this part may be 
offered directly to producers through agents of the United States 
Department of Agriculture.'' Commenters viewed the language as implying 
that the ARPI contract could be sold by the Farm Service Agency, acting 
as agents for the United States Department of Agriculture. Commenters 
requested that this language in section 407.2 (b) either be clarified 
or removed.
    Response: FCIC has revised section 407.2 (b) and modified the 
language to reflect the decision of the Secretary to only offer 
coverage through approved insurance providers unless the Secretary 
determines that the availability of local agents is not adequate in an 
area.
Section 407.8 The Application and Policy
    Comment: A commenter asked if FCIC should issue guidelines for 
insurance contract cancellations if FCIC or insurance providers may 
cancel insurance due to determinations of excessive risk down to a farm 
level in Sec.  407.8 (b).
    Response: ARPI is area-based insurance that is not intended for 
producers who want to insure at the farm level. A single farm generally 
does not greatly influence the insurance risk for an entire county. RMA 
is not considering issuing guidelines for contract cancellation for 
area-based plans of insurance based on excessive insurance risk at the 
farm level. FCIC has revised the provisions in (b) and removed ``farm'' 
from the determinations of excessive insurance risk.
    Comment: A commenter asked if a disclaimer form would be required 
for ARPI. The commenter recommended that FCIC does not require a 
disclaimer form since the area plan concept has been in existence for a 
number of years.
    Response: FCIC did not propose and will not require a disclaimer 
form for ARPI.
Section 407.9 Area Risk protection Insurance Policy
    Comment: Several commenters noted the third paragraph states 
``Throughout this policy, `you' and `your' refer to the named insured 
shown on the accepted application . . . '' but the term ``named 
insured'' is not defined. The commenters suggested FCIC either add this 
definition, or revise the language using terms already defined. The 
commenters also recommended changing the reference to ``insurance 
company'' to ``insurance provider'' since this term is defined.
    Response: The provisions define the term ``insured'' which includes 
the phrase ``The named person as shown on the application accepted by 
us.'' FCIC agrees with the commenters and has revised the provisions to 
use the term ``insured'' anywhere the phrase ``named insured'' was used 
in the proposed provisions. FCIC also agrees with the commenters that 
the reference to ``insurance company'' should be changed to ``insurance 
provider'' since that is the term defined and used in the provisions.
    Comment: A commenter questioned number (3) of the order of priority 
for policy provisions in the Agreement to Insure section. The commenter 
stated the actuarial documents are not really a policy provision 
document and

[[Page 38492]]

questioned the validity of this item being listed in the priority list. 
The commenter also stated they do not see how this item can take 
priority over any of the actual policy provision documents that are 
issued to the producer. The commenter also pointed out this item was 
not listed in the Common Crop Insurance Policy Basic Provisions.
    Response: By definition, the actuarial documents are a part of the 
policy. FCIC has revised the Agreement to Insure section by replacing 
the phrase ``policy provisions'' with the word ``policy''. The policy 
priority has been revised to now state ``(2) Special Provisions'' and 
``(3) actuarial documents'' and is renumbered accordingly.
Section 1 Definitions
    Comment: A few commenters stated many of the defined terms in ARPI 
are also in the Common Crop Insurance Policy Basic Provisions, but some 
of the terms are defined differently in ARPI. Where possible, terms 
with the same intent and purpose should be identically defined with the 
Common Crop Insurance Policy.
    Response: FCIC agrees that most terms should be identically defined 
between the ARPI Basic Provisions and the Common Crop Insurance Policy 
Basic Provisions. However, some terms do have a different meaning under 
ARPI and are defined accordingly. FCIC has changed some definitions as 
a result of other comments to the proposed rule but no specific 
definitions were changed from this comment.
    Comment: A commenter questioned why the definition of ``actuarial 
documents'' includes the Special Provisions, when the Special 
Provisions are not an actuarial document. The commenter suggested 
removing the reference to Special Provisions from the definition.
    Response: FCIC agrees with the commenter that the Special 
Provisions are not an actuarial document and will remove the reference 
to the Special Provisions in the definition of ``actuarial documents.'' 
However, the Special Provisions and actuarial documents are both a part 
of the policy and in accordance with changes to the Agreement to insure 
section, FCIC has added language to state that the actuarial documents 
are a part of the policy. Since all parts of the policy can be found 
together, FCIC has copied the following language ``. . . and is 
available for public inspection in your agent's office and published on 
RMA's Web site'' from the definition of ``actuarial documents'' and 
added this to the end of the definition of ``Special Provisions.'' In 
addition, USDA has started an initiative called the Acreage Crop 
Reporting Streamlining Initiative (ACRSI) to simplify the acreage 
reporting process by establishing a common USDA framework for commodity 
reporting that will enable producers to report common data once. This 
will be accomplished by establishing common data standards for 
automated processes across USDA, which will simplify and reduce the 
need for producers to provide the same information at different times 
to different agencies. FCIC is working to conform to ACRSI and is 
transitioning the current actuarial offers of type and practice shown 
on the actuarial documents. FCIC is also expanding the display of types 
and practices into eight new fields. Type will now become a combination 
of four fields called commodity type, class, subclass, and intended 
use. Practice will now become a combination of four fields called 
irrigation practice, cropping practice, organic practice, and interval. 
This transition does not increase the number of actuarial offers but 
displays the types and practices in a format that better conforms to 
the common data standards of the ACRSI. As a result, FCIC removed the 
following language ``. . . practices, particular types and varieties of 
the insured crop . . .'' from the definition of ``actuarial documents'' 
and replaced with ``. . . types (commodity types, classes, subclasses, 
and intended uses), practices (irrigated practices, cropping practices, 
organic practices, intervals) of the insured crop . . .'' Any reference 
to the crop, type, or practice being shown on the ``Special 
Provisions'' has been changed everywhere in the Basic Provisions and 
Crop Provisions to the term ``actuarial documents.''
    Comment: A commenter suggested the term ``agricultural experts'' 
match the plural use of ``persons'' by revising the second sentence to 
start with ``Persons who have a personal or financial interest . . .'' 
and change the third sentence to ``For example, contracting with a 
person . . .''
    Response: FCIC agrees with the commenter and has revised the 
definition accordingly.
    Comment: A commenter asked, based on the definition of ``area,'' 
how often and on what basis would a county be replaced by another 
geographical area as specified in the actuarial documents.
    Response: As of the date of this rule, area continues to be based 
on a county. However, requests are made to expand area coverage to new 
counties where there may not be adequate data. The term ``area'' is 
defined in a way that allows FCIC the flexibility to make ARPI offers 
for a geographical area other than a county. In some situations it may 
be more actuarially appropriate for certain geographical regions to be 
divided or combined into an area other than at a county level based on 
the availability of yield data or the homogeneity of the land.
    Comment: A commenter suggested for the definition of ``area yield 
protection'' adding language to specify it does not provide protection 
against loss of revenue.
    Response: FCIC agrees and has revised the provision accordingly.
    Comment: Several commenters stated the definition of ``assignment 
of indemnity'' is essentially the same as the one in the Common Crop 
Insurance Policy Basic Provisions but is broken into two separate 
sentences and some of the words are rearranged. The commenters 
suggested, unless these changes are improvements, the definitions 
should match.
    Response: FCIC agrees and has revised the definition accordingly.
    Comment: Several commenters questioned why ARPI defines the term 
``commodity'' but uses the term ``agricultural commodity'' in numerous 
places in the policy.
    Response: FCIC intends to use the term ``commodity'' and will 
replace ``agricultural commodity'' with the term ``commodity'' 
everywhere it appears in the provisions. FCIC also will revise the 
definition of ``commodity'' to more appropriately match USDA's ACRSI 
objective of using common standardized data and terminology. In 
addition, FCIC will add and define the term ``crop'' to recognize that 
a crop is the insured commodity.
    Comment: Several commenters questioned why the definition of 
``county'' is significantly different from same term under the Common 
Crop Insurance Policy Basic Provisions, and why the language ``. . . 
acreage in a field that extends into an adjoining county if the county 
boundary is not readily discernible'' has not been included in the 
definition. The commenters explained this would allow for greater 
consistency between all plans of insurance, especially due to the new 
production reporting requirements.
    Response: The ARPI definition of ``county'' is different because of 
the need to incorporate the term ``area.'' FCIC agrees with the 
commenters and will add the following language to the end of the 
definition: ``including acreage in a field that extends into an 
adjoining county if the county boundary is not readily discernible.''
    Comment: Several commenters questioned the use of the term

[[Page 38493]]

``credible'' and said this term appears to be used only in regards to 
``data'' that is ``of sufficient quality and quantity to be 
representative of the county.'' The commenters also said ``credible'' 
is an adjective and should not be redefined from its general meaning. 
The commenters suggested changing the term to ``credible data'' and 
then define the meaning.
    Response: FCIC agrees with the commenters and will replace the term 
``credible'' with the term ``credible data'' with the same definition.
    Comment: A commenter asked since the term ``delinquent debt'' seems 
to be an important definition and many past National Appeals Division 
cases have dealt with delinquent debt, this term should be defined in 
the policy, or at a minimum a Web site link to 7 CFR part 400, subpart 
U should be provided. Another commenter stated it would seem preferable 
to provide the definition of ``delinquent debt'' rather than requiring 
the producer (and insurance provider) to look it up in the CFR. The 
commenter also said the same goes for the definitions of ``limited 
resource farmer'' and ``verifiable records.''
    Response: FCIC understands the commenters concern of referring the 
readers to another document for the definition. However, it is not 
uncommon for the Basic Provisions to contain cross references to other 
provisions in 7 CFR part 400. Further, these regulations are part of 
the policy as it is defined. Maintaining one definition of ``delinquent 
debt'' in 7 CFR part 400, subpart U and a cross reference in the Basic 
Provisions will prevent conflicts between the Basic Provisions and 
subpart U. FCIC has added the link to the Web site where the definition 
can be found. The definition of ``limited resource farmer'' contains a 
Web site address and FCIC will add the Web site to the definition of 
``verifiable records''.
    Comment: Several commenters questioned the phrase ``directly or 
indirectly'' used in place of ``financially'' in the definition of 
``disinterested third party.'' The commenters believe this terminology 
has a broader implication but the intent is not clear, and 
identification of an indirect benefit will be subjective. Another 
commenter suggested changing the phrase ``(1) That does not . . .'' to 
``(1) Who does not . . . '' to be consistent with the phrase ``(2) Who 
will not . . .'' Another commenter pointed out the term ``disinterested 
third party'' is not used in the ARPI Basic Provisions.
    Response: FCIC agrees that the term ``disinterested third party'' 
is not used in the ARPI Basic Provisions and has elected to remove the 
definition.
    Comment: A commenter stated the definition of ``dollar amount of 
insurance per acre'' indicates that the projected price will always be 
used, but fails to account for a producer who elects less than 100 
percent of the projected price. The commenter further stated this would 
also affect the policy protection computation in section 6(f) and all 
other provisions that utilize this definition.
    Response: Under ARPI, producers will not have the choice of 
selecting a percentage of the projected price. Unless a producer elects 
the catastrophic risk protection (CAT) level of coverage, one hundred 
percent of the projected price will be used in calculating the dollar 
amount of insurance per acre. If the producer elects CAT coverage 45 
percent of the projected price will be used to calculate the dollar 
amount of insurance per acre. The CAT coverage offered under ARPI is 
equivalent to the CAT coverage previously offered under the Group Risk 
Plan (GRP) which ARPI is replacing. Group coverage is required to be 
`comparable coverage' to an individual plan, for which CAT is 
statutorily defined as 50 percent of yield and 55 percent of price. RMA 
has determined that comparable area-based coverage is 65 percent of 
yield and 45 percent of price. FCIC will remove section 2(b)(4), which 
will eliminate the ability for producers to select a percentage of the 
projected price on their applications for insurance.
    Comment: A commenter questioned if the terms ``expected county 
yield'' and ``final county yield'' should reference section 15 for an 
explanation of how and who determines these yields.
    Response: FCIC agrees and has added a reference to section 15 in 
these definitions.
    Comment: A commenter stated the term ``final planting date'' in 
ARPI seems to be a different definition than what is contained in the 
Common Crop Insurance Policy Basic Provisions and is therefore 
confusing to producers. The commenter gave the example of a Common Crop 
Insurance Policy corn policy with a final planting date of May 31st and 
a 25-day late planting period, which means the late planting period 
ends June 25th. The commenter further states then for ARPI the final 
planting date would be June 25th and the CCIP final planting date would 
be May 31st for the same crop and county. Another commenter questioned 
the phrase ``generally consistent'' stating it is ambiguous and fails 
to improve the clarity of the definition. The commenter asked FCIC to 
consider deleting the phrase ``generally consistent with.'' Another 
commenter stated the final planting date is a new requirement for the 
insured crop to be planted by the final planting date in order to be 
insurable. This commenter questioned if it is FCIC's intent for the 
insurance provider to capture the actual planting date in order to 
determine if the acreage is insurable or not. The commenter stated this 
would create a large increase in workload to capture information for 
the very few situations in which the acreage might be planted after the 
last day of the normal late planting period as outlined in other 
individual reinsured policies.
    Response: FCIC defined ``final planting date'' differently because 
there is no coverage for prevented planting or and no reduction in the 
guarantee if the crop is late planting under ARPI because this is an 
area policy. However, to protect program integrity, FCIC needs to 
ensure that producers planted, and used good farming practices, with 
the expectation of making a crop. Therefore, FCIC is retaining the 
requirements to plant by the final planting date and has elected to use 
the last day of the late planting period as the final planting date. 
FCIC agrees that the phrase ``generally consistent with'' should be 
removed and has removed the entire second sentence from the definition 
of ``final planting date,'' since the first sentence is unambiguous and 
clearly defines the final planting date as the date contained in the 
actuarial documents. FCIC also revised section 8(c)(1) to specify the 
last date the insured crop was planted must be reported.
    Comment: Several commenters stated the term ``FSA serial farm 
number'' should be corrected to ``FSA farm serial number.''
    Response: FCIC has revised this term to ``FSA farm number'' since 
FSA now uses the term ``farm number'' in place of term ``farm serial 
number.''
    Comment: Several commenters stated the definition of ``insurable 
interest'' is significantly different from the same term as defined in 
the Common Crop Insurance Policy Basic Provisions. The commenters 
suggested defining ``operator'' since, as currently stated in ARPI the 
new definitions for ``disinterested third party,'' ``insurable 
interest'' and ``share'' may collectively imply that an ``operator'' 
might include a custom harvester or farm manager, both of whom would 
have at least an indirect financial interest in the crop.
    Response: FCIC agrees that the definition of ``insurable interest'' 
is

[[Page 38494]]

significantly different and has revised the definition to match the 
same term as defined in the Common Crop Insurance Policy Basic 
Provisions, which does not include a reference to ``operator.'' FCIC 
has also revised the definitions of ``share'' to be consistent with the 
Common Crop Insurance Policy Basic Provisions and removed the 
definition of ``disinterested third party'' because it is not used in 
the policy.
    Comment: Several commenters questioned the intent of the last 
sentence of the definition of ``insurance provider'' which states, ``We 
are an insurance provider.'' One commenter stated it does not appear to 
add any meaning to the definition and should be deleted. Another 
commenter questioned what the word ``we'' refers to in the last 
sentence.
    Response: The paragraph preceding the ``Agreement to Insure'' 
section at the beginning of the policy clarifies to whom ``we'' refers. 
Therefore, the last sentence in the definition of ``insurance 
provider'' is redundant and has been removed.
    Comment: Several commenters stated the term ``payment factor'' 
should not have ``Factor'' capitalized so as to be consistent with most 
other multi-word definitions.
    Response: FCIC agrees and has changed the term accordingly.
    Comment: A commenter asked if FCIC would consider expanding the 
definition of ``planted acreage.'' The commenter stated the adequacy of 
the planted acreage term may not be an issue for this proposed rule, 
but it does not fit well with all crops. For example, sugarcane and 
potatoes are planted using pieces of the sugarcane stalk or potato; 
sweet potatoes are planted with slips. The commenter suggested 
expanding the definition of planted acreage to include for example, 
``seed, vegetative plant parts, plants, trees, and other propagation 
materials '' or other suitable designations.
    Response: FCIC realizes that ARPI may be expanded in the future to 
include crops with other planting practices. Therefore, FCIC has 
revised the definition to allow other planting methods to be included 
in the Special provisions.
    Comment: Several commenters questioned the benefit of including 
good farming practice considerations in the definition of the term 
``practice.'' The commenters stated these terms are separate concepts 
with separate purposes under the policy and should be separately 
defined. A commenter questioned if the phrase ``. . . qualifying as 
good farming practices . . .'' should be moved from the first sentence 
to the second sentence. The commenter also recommended in the second 
sentence changing the phrase ``specific practices that are insured'' to 
``specific insurable practices'' and stated the phrase ``may be 
listed'' is confusing because how can an insured practice NOT be listed 
in the actuarial documents.
    Response: FCIC agrees with the commenters that the definition of 
``practice'' is problematic and has revised the definition to now state 
``Production methodologies used to produce the insured crop consisting 
of unique combinations of irrigated practice, cropping practice, 
organic practice, and interval as shown on the actuarial documents as 
insurable'' which also helps FCIC conform with the ACRSI goal of using 
common data standards across USDA. FCIC has added and defined the new 
terms ``irrigated practice,'' ``cropping practice,'' ``organic 
practice,'' and ``interval.'' Each unique combination of these four 
categories will match the original practice actuarial offer.
    Comment: A commenter recommended in the definition of ``protection 
factor'' changing the phrase ``. . . and is used . . .'' to ``and that 
is used . . .''
    Response: FCIC agrees and has changed the definition accordingly.
    Comment: A commenter asked, according to the definition of 
``replanted crop,'' is replanting required under the area plans of 
insurance if the crop is destroyed on or before the final planting 
date; i.e., good farming practice.
    Response: FCIC does not require replanting if the crop is destroyed 
on or before the final planting date.
    Comment: Several commenters stated the definition for ``share'' is 
different from the same term defined in the Common Crop Insurance 
Policy Basic Provisions, and collectively with the new definitions for 
``disinterested third party'' and ``insurable interest,'' could imply 
that an ``operator'' might include a custom harvester or farm manager, 
who could have at least an indirect financial interest in the crop. In 
addition, the commenters noted if premium is determined on the share as 
of acreage reporting date some of the policy references to ``share'' do 
not appear to be consistent in section 8.
    Response: FCIC agrees the definition of ``share'' is inconsistent 
with section 8 and has revised the definition to now state, ``Your 
insurable interest in the insured crop as an owner, operator, or 
tenant.'' This change, the deletion of ``disinterested third party, and 
the revision to the definition of ``insurable interest'' should no 
longer imply that a custom harvester or farm manager, who could have an 
indirect interest, would have an insurable interest in the crop. FCIC 
has also revised section 8 to correct other inconsistencies with the 
definition of ``share'' and to be more consistent with the Common Crop 
Insurance Policy.
    Comment: Several comments were received regarding the definition of 
``total loss factor.'' A commenter was concerned the total loss factor 
works like an increasing payment product and is unsure if the increased 
risk is properly rated. Another commenter stated even though it is 
unlikely that a county level loss will reach a level similar to the 
total loss factor of 0.82, the use of this factor would seem highly 
inappropriate for insuring grain crops and cotton. The commenter 
further stated it has never been nor should it be a practice to ignore 
potential production regardless of reduced levels of crop production 
that might remain following damage. The use of this factor also 
represents a departure from normal practice for individual yield based 
revenue products where any appraised production greater than zero is 
used to determine the indemnity. It is not employed in either of the 
current GRP and GRIP programs. If a producer wishes to elect coverage 
that recognizes zero potential (total loss), the option to purchase 
individualized protection should be elected.
    Response: As directed by the Act, FCIC will charge premium rates 
for ARPI that are sufficient to cover expected losses plus a reasonable 
reserve. The premium rates for ARPI are expected to be generally higher 
than for GRP or GRIP. However, the higher rates will be offset by a 
reduction in liability as a result of the lower protection factor which 
will result in similar premium amounts collected. FCIC does not 
understand the basis for the comments regarding the practice of 
ignoring potential production and appraised production greater than 
zero. ARPI is an area-based insurance product which does not use loss 
adjustment appraisals to determine indemnities. The overall average 
production in the county determines if there is a loss situation and 
whether an indemnity is due. The loss limit factor, combined with the 
lower maximum protection factor, makes ARPI pay as if there were an 
appraised level of production of at least 18 percent, regardless of how 
low county production actually falls.
    Comment: Several commenters stated the word ``premium'' for the 
term ``total premium'' should not be capitalized.
    Response: FCIC agrees and has revised the term accordingly.

[[Page 38495]]

    Comment: Several commenters stated that in the definition of 
``type'' the phrase ``may be listed'' is confusing because how can an 
insured type NOT be listed in the actuarial documents.
    Response: FCIC agrees with the commenters that the definition of 
``type'' may cause confusion and has revised the definition to now 
state ``Categories of the insured crop consisting of unique 
combinations of commodity type, class, subclass, and intended use as 
shown on the actuarial documents as insurable,'' which also helps FCIC 
conform with the ACRSI goal of using common data standards across USDA. 
FCIC has added and defined the new terms ``commodity type,'' ``class,'' 
``subclass,'' and ``intended use.'' Each unique combination of these 
four categories will match the original type actuarial offer.
    Comment: A commenter noted the term ``upside harvest price 
protection'' is defined but questioned if the term ``downside harvest 
price protection'' should also be defined.
    Response: It is unnecessary to define the term ``downside harvest 
price protection'' as this term is not used in the provisions. The Area 
Revenue Protection plan and Area Revenue Protection with the Harvest 
Price Exclusion plan both provide protection against loss of revenue 
due to price decline, which is equivalent to downside harvest price 
protection. No change has been made.
    Comment: Several comments were received regarding the definition of 
``verifiable records.'' One commenter suggested FCIC provide a Web site 
link of where the definition is provided. Another commenter questioned 
since ``verifiable records'' is defined, should the applicable term 
``production report'' be defined with the institution of new production 
reporting requirements in this rule. The commenter also stated section 
8 of the provisions should be clearer when the production report must 
be submitted since the Special Provisions do not contain a field for 
this date. The commenter also states the timing of the production 
reporting date is critical especially if used for determining expected 
and final county yields for current crop year loss determinations.
    Response: FCIC has added a link to the definitions in 7 CFR parts 
400, subpart G. FCIC agrees with the commenter about defining the term 
``production report'' and has added the definition to the provisions. 
In the future, the actuarial documents will contain a field for the 
date when the production report must be submitted which will be in 
advance of the date for the release of the final county yields.
    Comment: A commenter noticed the definition of ``written 
agreement'' is not included in ARPI. The commenter asked if FCIC has 
performed an analysis of how many written agreements were written on 
past GRP and GRIP policies and any effect on these insureds, as they 
would not be able to cover these acres via an area revenue type policy.
    Response: FCIC did not include a definition for ``written 
agreement'' since written agreements will not be used for ARPI. FCIC's 
analysis shows the total number of GRP and GRIP written agreements 
accounted for less than 1 percent of the total GRP and GRIP policies 
earning premium each year. Acreage for other crops such as hybrid seed 
corn, popcorn, and sweet corn can currently be insured under other 
plans of insurance offered by FCIC. FCIC may insure other crops under 
the ARPI Crop Provisions if the crop is specified on the Special 
Provisions.
Section 2 Life of the Policy, Cancellation and Termination
    Comment: Several commenters suggested consolidating the first two 
sentences of section 2(b) to minimize repetition.
    Response: FCIC agrees and has revised section 2(b) accordingly.
    Comment: A commenter stated the provisions in section 2(b)(4) imply 
that for the Area Yield Protection plan a percentage of less than 100 
percent of the projected price is allowed and asked whether this 
election applies on a crop/county basis or can it vary by crop, 
practice, or type.
    Response: FCIC will not allow a producer to select a percentage of 
the projected price and has removed section 2(b)(4). The rest of 
section 2(b) has been renumbered accordingly.
    Comment: Numerous comments were received regarding section 
2(b)(6)(i) and the language in the parenthetical phrase not matching 
the revised procedure in the 2012 Crop Insurance Handbook (CIH). 
Several commenters stated the word ``including'' suggests that ``joint 
ventures, limited liability companies, and trusts'' are considered to 
be under the ``individual . . . operating as a business'' person type, 
but they are identified as separate person types in the CIH. The 
commenters further stated the use of an employee identification number 
(EIN) is now required as opposed to the implied option indicated by 
using the word ``may'' for individuals operating as a business and for 
irrevocable trusts, and for revocable trusts if an EIN has been 
established (social security number (SSN) can be used only if there is 
no EIN for the revocable trust). The commenters also stated the phrase 
``. . . but must also provide your SSN'' is unclear that the SSN would 
be for the individual who has a substantial beneficial interest in the 
insured entity using an EIN as the identification number.
    Response: FCIC agrees and has revised the language of section 
2(b)(6)(i), which has been redesignated as section 2(b)(5)(i) because 
section 2(b)(4) has been removed, to be consistent with section 2 of 
the Common Crop Insurance Policy Basic Provisions.
    Comment: FCIC received numerous comments for section 2(c). Several 
commenters stated section 2(c)(1) begins with a reference to a singular 
``person with a substantial beneficial interest'' but later refers to 
plural ``ineligible persons with a substantial beneficial interest''. 
Several commenters suggested in section 2(c)(2) either not subdividing 
the parenthetical language into subparagraphs (i) and (ii) within the 
parentheses, or setting it up as a separate subparagraph. Several 
commenters suggested revising section 2(c)(3) for clarity. The section 
states ``Your policy will be void . . . any time that an incorrect or 
omitted SSN or EIN, provided on the application, would have allowed . . 
.'' The commenters stated since an omitted SSN or EIN would not be 
provided on the application this merits rewriting.
    Response: FCIC agrees and has revised all of section 2(c) to be 
consistent with section 2 of the Common Crop Insurance Policy Basic 
Provisions, which should address the comments and to provide more 
clarity for what happens if the application contains an incorrect SSN 
or EIN or if an SSN or EIN was omitted for the insured and a person 
with a substantial beneficial interest in the insured.
    Comment: Several commenters inquired whether section 2(f) really 
intended to allow revisions of ``any of your information'' until the 
acreage reporting date per section 2(f)(1), or even until the time a 
claim is paid per section 2(f)(2), which is quite different from the 
Common Crop Insurance Policy Basic Provisions. The commenters asked if 
this is the intent does this include all the categories of 
``information'' listed in section 2(b), or is this restricted to the 
tax identification number(s) of the insured and persons with a 
substantial beneficial interest as suggested by the reference in 
section 2(f)(3) to section 2(c)(1) and (3). A commenter also stated 
perhaps section 2(f) could be a part of section 2(c), but then why does 
section 2(c) have other penalties of not accepting or voiding the

[[Page 38496]]

policy if the tax identification number information is incorrect or not 
provided.
    Response: The intent of section 2(f) is to require the reporting of 
changes to any information on the application for persons with a 
substantial beneficial interest in the insured, including changes to 
the SSNs and EINs. FCIC has revised all of section 2(f) to be 
consistent with the Common Crop Insurance Policy Basic Provisions. FCIC 
disagrees that section 2(f) could be a part of section 2(c) since both 
sections 2(c) and 2(f) were revised to be consistent with the Common 
Crop Insurance Policy Basic Provisions and to maintain flow from 2(f) 
to 2(g).
    Comment: Several commenters suggested moving the word ``and'' from 
the end of section 2(f)(2) to the beginning of section 2(f)(3) to make 
for a proper flow from the lead-in of section 2(f).
    Response: FCIC agrees and has revised the provisions accordingly.
    Comment: Several commenters suggested in section 2(g) moving the 
comma from before the word ``is'' to after.
    Response: FCIC agrees and has revised the provisions accordingly.
    Comment: A commenter inquired if it would be possible in sections 
2(k)(2)(i)(A) and (B) to write the parenthetical statement once to 
apply in both sections instead of repeating the language each time.
    Response: Having only one parenthetical apply to both situations 
would require a substantial rewrite of the provisions. Given that this 
is a final rule, FCIC does not want to risk a rewrite that may 
inadvertently change the meaning of the provisions. Therefore, no 
change has been made.
    Comment: Several commenters noted section 2(k)(2)(ii) states ``. . 
.any indemnities paid subsequent to the termination date must be 
repaid.'' The commenters inquired if it should not instead state `` . . 
. prior to the termination date . . .''
    Response: The provision, as written, is correct. A delinquent debt 
for any policy makes a producer ineligible to obtain insurance for any 
subsequent crop year. Section 2(k)(2)(ii) addresses what happens if 
insurance had attached and an indemnity was paid for a subsequent crop 
year.
    Comment: Several commenters inquired about the provisions in 
section 2(k)(2) and (3) regarding termination of a policy due to unpaid 
premium or administrative fees and subsequently regaining eligibility. 
The commenters noted that the ARPI policy provides for only two methods 
to regain eligibility (repay the debt in full, or declare bankruptcy) 
and asked if FCIC intended to not include any provisions for the 
execution of a written payment agreement to pay amounts due. The 
commenters also noted these comparable provisions were in the GRP Basic 
Provisions and section 2(f)(2) and (3) of the Common Crop Insurance 
Policy Basic Provisions contains language for written payment 
agreements.
    Response: FCIC agrees with the commenter that eligibility may be 
regained by executing a written payment agreement. FCIC will make the 
ARPI provisions in 2(k)(2) and (3) consistent with sections 2(f)(2) and 
(3) of the Common Crop Insurance Policy Basic Provisions, and specify 
that when there has been a termination of a policy due to unpaid 
administrative fees, premiums, or other amounts due FCIC, the producer 
can regain eligibility by executing a written payment agreement and 
make payments in accordance with the agreement.
    Comment: Regarding sections 2(k)(2)(i)(D) and 2(k)(3)(ii) a 
commenter advised these two provisions should be revised to tie 
regaining eligibility to the discharge of a bankruptcy petition instead 
of the filing of a bankruptcy petition. The commenter stated that 
allowing individuals who have merely filed for bankruptcy to 
participate in the program creates a program vulnerability that should 
be stopped. Using the filing of a bankruptcy petition as the trigger 
for regaining eligibility based upon concerns that denying 
participation until discharge would violate 11 U.S.C.A. Sec.  525(a) is 
in error. Section 525(a) states, ``. . . a governmental unit may not 
deny, revoke, suspend, or refuse to renew a license, permit, charter, 
franchise, or other similar grant to, condition such a grant to, 
discriminate with respect to such a grant against, deny employment to, 
terminate the employment of, or discriminate with respect to employment 
against, a person that is or has been a debtor under this title or a 
bankrupt or a debtor under the Bankruptcy Act, or another person with 
whom such bankrupt or debtor has been associated, solely because such 
bankrupt or debtor is or has been a debtor under this title or a 
bankrupt or debtor under the Bankruptcy Act, has been insolvent before 
the commencement of the case under this title, or during the case but 
before the debtor is granted or denied a discharge, or has not paid a 
debt that is dischargeable in the case under this title or that was 
discharged under the Bankruptcy Act.'' The courts of appeals that have 
approached the question have read the statute's reach narrowly, 
focusing upon the specific language of the statute. See, e.g., Watts v. 
Pennsylvania House. Fin. Co., 876 F.2d 1090, 1093-94 (3d Cir.1989); In 
re Goldrich, 771 F.2d 28, 30 (2d Cir.1985). Watts involved an emergency 
mortgage assistance program designed by the State of Pennsylvania to 
prevent imminent mortgage foreclosures by providing for loans to 
distressed borrowers in the form of direct payments to their mortgage 
lenders, keeping their mortgages current. When plaintiff borrowers 
filed for bankruptcy, the program suspended these payments for the 
duration of the Bankruptcy Code's automatic stay. Plaintiffs contended 
this suspension violated Sec.  525(a). In response, the court of 
appeals noted that a loan from the Pennsylvania program simply was not 
a ``license, permit, charter [or] franchise,'' and that since those 
terms ``are in the nature of indicia of authority from a governmental 
unit to pursue some endeavor,'' the term ``similar grant'' should be 
given the same meaning. Watts, 876 F.2d at 1093. Similarly, the court 
in In re Goldrich concluded that Sec.  525(a) did not prohibit 
consideration of prior bankruptcies in credit decisions, since ``the 
language of section 525 may not properly be stretched so far beyond its 
plain terms.'' Goldrich, 771 F.2d at 29. The items enumerated in the 
statute--licenses, permits, charters, and franchises--are unrelated to 
insurance. They reveal that the target of Sec.  525(a) is government's 
role as a gatekeeper in determining who is authorized to pursue certain 
livelihoods. It is directed at governmental entities that might be 
inclined to discriminate against former bankruptcy debtors in a manner 
that frustrates the ``fresh start'' policy of the Bankruptcy Code, by 
denying them permission to pursue certain occupations or endeavors. The 
intent of Congress incorporated into the plain language of Sec.  525(a) 
should not be transformed by employing an expansive understanding of 
the ``fresh start'' policy to insulate a debtor from all adverse 
consequences of a bankruptcy filing or discharge. Toth v. Michigan 
State Housing Development Authority, 136 F.3d 477 (6th Cir. 1998) 
(housing authority did not violate Bankruptcy Code's antidiscrimination 
provision when it denied debtor's home improvement loan solely because 
she had received discharge within three years of application). The 
commenter further stated, if FCIC remains concerned that denying 
participation until discharge would violate 11 U.S.C.A. 525(a), the 
commenter

[[Page 38497]]

suggested that section 2(k)(2)(i)(E) must be changed to make the 
``termination date'' the date of dismissal of the bankruptcy. If 
disallowing participation during the pendency of a bankruptcy violates 
11 U.S.C.A. 525(a), which the commenter does not believe is true, then 
back dating the termination is also a violation as participation is 
denied ``during the case but before the debtor is granted or denied a 
discharge.''
    Response: FCIC disagrees with the commenter. The cases cited are 
not on point because those cases did not involve a debt owed to the 
governmental unit and the question of ineligibility because the debt 
was not timely paid. The person had been deemed ineligible because of 
the bankruptcy. Those cases involved the effects of the bankruptcy, not 
the effect of the debt. In this case, the person is ineligible because 
of the debt. Under the Bankruptcy Act since once the petition has filed 
to have debts discharged, all collection activities must be stayed. If 
there is no authority to collect the debt during the pendency of the 
bankruptcy, there is similarly no authority to make the producer 
ineligible because of the debt. If the bankruptcy petition does not 
lead to a discharge of debt, the parenthetical sentence in section 
2(k)(3)(ii) already states what happens for a dismissal of the 
bankruptcy petition before discharge.
    Comment: Several commenters noted that section 2(l) has the phrase 
``of marriage'' added when compared to the equivalent section 2(g) of 
the Common Crop Insurance Policy. The commenters stated this phrase 
appears to limit these provisions to dissolution of marriage only so 
other kinds of dissolution such as dissolution of a partnership are not 
included. The commenters presumed the phrase was in error since section 
2(l)(4) refers to if an insured entity is dissolved and section 2(l)(5) 
refers to the dissolution of the entity without either 2(l)(4) or 
2(l)(5) being restricted to a dissolved marriage.
    Response: FCIC agrees with the commenters and will remove the 
phrase ``of marriage'' since this provision is intended to include all 
legal types of dissolution.
    Comment: A commenter noted that section 2(l)(3)(ii)(A) states ``A 
new application for insurance must be submitted prior to the sales 
closing date . . .'' The commenter suggested replacing the phrase 
``prior to'' with ``by'' or ``on or prior to'' since as currently 
written an application submitted on the actual sales closing date could 
not be accepted.
    Response: FCIC agrees with commenter but will replace the phrase 
``prior to'' with the phrase ``on or before.'' In addition, FCIC will 
also make the same change in section 2(l)(4)(ii)(A).
    Comment: A commenter stated section 2(o) is burdensome, unnecessary 
and serves no benefit to report on any crop previously obtained from 
FSA or an insurance provider and requiring the date obtained and amount 
of the administrative fee. The commenter asked if this remains in the 
final rule, then what will be the penalty to the producer if this is 
not properly reported. The insurance providers do not want to incur a 
lot of additional expense to track this down when this has very little 
to no benefit and is already captured by FCIC's past and current 
processing system.
    Response: FCIC agrees and has removed this provision and 
redesignated section 2(p) and 2(q) as 2(o) and 2(p), respectively. This 
provision is unnecessary since there are no longer maximum allowable 
amounts of administrative fees that need to be accounted for.
    Comment: Several commenters suggested updating the years in the 
example given in section 2(q)(2).
    Response: FCIC agrees with the commenters and has advanced the 
years given in redesignated section 2(p)(2) example by two years.
Section 3 Contract Changes
    Comment: A commenter questioned in section 3(b) the reference to 
the actuarial documents. If referencing the actuarial documents, 
consider referencing the Special Provisions instead, as they are 
subject to change (see 3(d) and (e) where the Special Provisions are 
referenced), and are not part of the actuarial documents.
    Response: FCIC agrees there may be some confusion with sections 
3(d) and 3(e) having a reference to the Special Provisions and section 
3(b) referencing the actuarial documents. FCIC agrees with the 
commenter's suggestion of removing the reference to actuarial documents 
in section 3(b) and including the actuarial documents in the reference 
to the policy which, by definition, include the actuarial documents and 
Special Provisions. FCIC has added the language ``amounts of 
insurance'' in place of ``actuarial documents.'' In addition, since all 
information contained in section 3(b) is now viewable on RMA's Web site 
and in a crop insurance agent's office, insurance providers will no 
longer provide, in writing, a copy of the changes to the information 
noted in section 3(b) unless the insurance provider does not have the 
means to transmit such information by electronic means or the producer 
elects to receive a paper copy of such information. FCIC has revised 
section 3(d) to now state, ``Not later than 30 days prior to the 
cancellation date for the insured crop you will be provided, in 
accordance with section 20, a copy of the changes to the Basic 
Provisions, Crop Provisions, CEPP, if applicable, and Special 
Provisions.'' Distinction needs to be made because changes to the 
actuarial documents are only viewable on the RMA Web site because they 
are so voluminous. FCIC has revised section 3(e) to now state, 
``Acceptance of all the changes will be conclusively presumed in the 
absence of notice from you to change or cancel your insurance 
coverage.'' FCIC will also make changes accordingly to the notices 
required in section 20. These changes will reduce the burden of excess 
distribution of paper policy materials.
Section 4 Insured Crop
    Comment: A commenter questioned why section 4(b)(7) is needed when 
section 4(b)(3) would appear to address any pricing, rating, and other 
issues contained in the actuarial documents. The commenter stated 
generally crops insurable on the Special Provisions are also contained 
in the actuarial documents but the language in section 4(b)(7) creates 
an insured crop exclusion. The commenter suggested removing this 
provision.
    Response: FCIC agrees section 4(b)(7) is redundant and not 
necessary. FCIC has removed the provisions in section 4(b)(7) and 
redesignated section 4(b)(8) as 4(b)(7).
    Comment: A commenter suggested in section 4(b)(8) the word 
``Uninsurable'' at the end of the second sentence should not be 
capitalized.
    Response: The word ``uninsurable'' is not capitalized in the 
Proposed Rule, which was published in the Federal Register. No change 
has been made.
    Comment: A commenter suggested FCIC add the word ``or'' before 
``practice'' and delete the comma after ``practice'' in the second 
sentence of section 4(c).
    Response: FCIC agrees and has revised the provisions accordingly.
Section 5 Insurable Acreage
    Comment: Several commenters mentioned FCIC should not capitalize 
the first word of a parenthetical phrase when the phrase is not a 
complete sentence. The commenters cited the two parenthetical phrases 
of section 5(a) where the first parenthetical is a sentence (but does 
not have a period at the end) and the second is not a complete 
sentence. The commenters

[[Page 38498]]

suggested not capitalizing either of these parenthetical phrases and 
review others throughout the policy provisions.
    Response: FCIC agrees with the commenters and has revised the 
parenthetical phrases here and throughout the provisions to be lower 
case when the information contained in the parenthetical is not a 
complete sentence and has removed all periods within the parenthetical 
since the punctuation is more appropriate at the end of the provision.
    Comment: A commenter noted the provisions in section 5(a)(1) are 
the exact same or similar to the provisions in the Common Crop 
Insurance Policy Basic Provisions and the commenter expressed concern 
that their inclusion in this rule increases the burden on insurance 
providers to assure compliance with provisions that heretofore were not 
required.
    Response: FCIC understands the concerns of the commenter but the 
inclusion of this provision provides consistency amongst FCIC crop 
insurance products. While this is an area coverage policy, the 
expectation is that producers who purchase the policy have the same 
chance of making a crop as any other producer. This provision reduces 
the risk of FCIC insuring acreage that is not capable of producing a 
crop.
    Comment: A commenter stated if ARPI is not offered on forage, 
consider revising section 5(a)(1)(iii) to remove the reference to 
pasture or rangeland as insured crops under this rule.
    Response: Coverage for forage will be available under ARPI with its 
own Crop Provisions. Under ARPI, forage is a different crop from 
pasture or rangeland, and acreage from pasture or rangeland is not 
insurable as forage. A definition of ``forage'' has been added to the 
Forage Crop Provisions.
    Comment: A commenter questioned in section 5(a)(1)(iv) if the 
phrases ``Crop Provisions'' or ``Special Provisions'' are considered 
singular documents or plural ``provisions.'' The commenter stated if 
the former, the statement, ``. . . specifically allows insurance for 
such acreage'' is correct; if the latter then the word ``allows'' needs 
to be change to ``allow.''
    Response: These documents are considered plural so FCIC has changed 
``allows'' to ``allow.''
    Comment: In section 5(b) a commenter recommended FCIC provide 
clarification if acreage replanted after the final planting date is 
insured, provided it was originally planted before the final planting 
date. The commenter suggested FCIC add the word ``originally'' to the 
draft language so it reads, ``Only the acreage originally planted to 
the insured crop . . .'' The commenter also stated if this is not the 
intent of this paragraph, then FCIC should add clarification to let 
everyone know the situation described previously is not insurable.
    Response: FCIC does not provide for or require replanting under the 
ARPI rule. Therefore, as long as the insured crop is planted on or 
before the final planting date it is insured, regardless of whether or 
not it was subsequently replanted. No changes have been made.
    Comment: Several commenters questioned the parenthetical phrase 
``(We will remove the acreage for which good farming practices were not 
carried out from the acreage report, no premium will be due, and no 
indemnity paid)'' in section 5(c)(2). The commenters questioned if this 
really should only apply to acreage in which good farming practices 
were not carried out or should this apply to other types of uninsured 
acreage in the rest of section 5(c).
    Response: FCIC has revised the provisions by moving the 
parenthetical phrase to the stem in section 5 and clarifying that 
uninsured acreage and any production from uninsured acreage will not be 
included for the purposes of establishing the final county yield. The 
ACRSI requires the reporting of all acreage, including uninsured 
acreage. FCIC will not remove this acreage from the acreage report, but 
will instead consider this acreage on the acreage report as 
uninsurable.
    Comment: Several commenters expressed concern about section 5(c)(5) 
only containing a portion of the language which had appeared in the GRP 
and GRIP Basic Provisions and currently appears in the Common Crop 
Insurance Policy Basic Provisions. The commenters questioned the 
omission and if FCIC's intention is for ARPI to only offer insurance 
for first crop and/or second crop as applicable but not three or more 
crops even if it is a practice generally recognized for an area. The 
commenters stated if this is FCIC's intent then any reference to the 
phrase ``two or more'' should be removed from section 13 and anywhere 
else it appears in the policy.
    Response: FCIC does not intend to only offer insurance for first 
crop and second crop for ARPI because section 108 of the Agricultural 
Risk Protection Act of 2000 (ARPA) allows for conditions upon which a 
third crop planted on the same acreage in the same crop year can be 
insured. FCIC has added language to the provisions at the end of 
section 5(c)(5) that will allow for coverage of a third and subsequent 
crop.
Section 6 Coverage, Coverage Levels, Protection Factor, and Policy 
Protection
    Comment: A commenter noted section 6 provides rules for electing 
the coverage level and protection factor but not the percentage of the 
projected price.
    Response: The ARPI policy allows the election of a protection 
factor, which has the same effect on coverage as the selection of a 
percentage of price.
    Comment: Several commenters stated it is their understanding that 
FCIC has the authority to offer area-wide policies at coverage levels 
up to 95 percent, but only 90 percent coverage levels have been 
offered. One commenter believed the higher coverage level would offset 
sky rocketing production costs and narrowing margins of profit. Another 
commenter stated since the area-wide policy is structured in a manner 
that does not allow manipulation by the actions of an individual 
producer, the 95 percent coverage level could be accurately rated and 
would provide an appealing alternative for producers in high-yielding 
regions.
    Response: FCIC will take the commenters' recommendation under 
consideration. FCIC currently considers a 90 percent coverage level to 
provide an adequate deductible level for insureds consistent with sound 
insurance principles.
    Comment: Several commenters stated they would like to see FCIC 
offer separate irrigated and non-irrigated practices in more counties. 
A commenter stated they support the advent of area-wide policies with 
insurance offers that differentiate between irrigated and non-irrigated 
practices. The commenters advocated FCIC use actual yield data reported 
by producers to FCIC to separate NASS data into irrigated and non-
irrigated practices in counties where there is irrigation but NASS does 
not issue practice-specific yields. The commenter also supported 
allowing producers who have both irrigated and non-irrigated acreage in 
the same county to have separate units by practice under the area plans 
of insurance since there will be separate loss determinations by 
practice.
    Response: FCIC will continue to work toward making separate offers 
for irrigated and non-irrigated practices in more counties, if there is 
available data to make actuarially appropriate insurance offers. The 
ARPI production reporting requirement and additional yield data 
sources, including FCIC data, should assist in providing more insurance 
offers by practice in the future. If FCIC provides both an irrigated 
and non-irrigated insurance

[[Page 38499]]

offer in a county, then a producer must insure their acreage according 
to the irrigation practice they actually carry out. Separate practices 
found on the actuarial documents are treated as separate offers and 
will have separate loss determinations.
    Comment: Several commenters noted that under sections 6(a) through 
(c) producers have to elect the same plan of insurance (ARP, ARP-HPE, 
or AYP) for the crop/county, but could elect different protection 
factors (percentages) and coverage levels for each crop practice/type. 
The commenters stated this raises concerns by allowing different 
protection factors and coverage levels by practice and type and there 
are consequences for allowing elections at this detailed level. The 
commenters questioned the rationale for allowing these elections within 
a crop/county.
    Response: FCIC understands the commenters concerns, but allowing 
producers the opportunity to choose different coverage levels by type 
and practice were allowed in the GRP and GRIP plans of insurance and 
carried over here. Since producers insured under area plans of 
insurance are unable to generate a loss at an individual level, the 
exposure to adverse selection by having different coverage levels for 
the same crop is greatly diminished. The ability to elect different 
coverage levels and protection factors by types and practices within a 
crop allows producers to customize their insurance coverage to better 
reflect their actual insurance risk by type and practice within a crop. 
No change has been made.
    Comment: Several commenters recommended not capitalizing the first 
word in the parenthetical phrases in sections 6(c)(1)(ii) and 
6(c)(2)(ii).
    Response: FCIC agrees and has revised the provisions accordingly.
    Comment: Several commenters noted the first parenthetical phrase in 
section 6(c)(2)(ii) does not have an end parenthesis, and should.
    Response: The parenthetical phrase noted by the commenters should 
not be a parenthetical phrase. FCIC has removed the parenthesis in the 
first sentence of section 6(c)(2)(ii).
    Comment: Several commenters recommended deleting the comma in the 
phrase ``. . . type, and practice . . .'' in sections 6(c)(2)(iii).
    Response: FCIC agrees and has revised the provisions accordingly.
    Comment: A commenter recommended in the first sentence of section 
6(c)(2)(iii) deleting the phrase ``. . . as long as they are different 
types or practices . . .'' and also replacing words ``actuarial 
documents'' with ``Special Provisions.''
    Response: FCIC agrees and has removed the phrase ``. . . as long as 
they are different types or practices . . .'' FCIC disagree with 
replacing ``actuarial documents'' with ``Special Provisions'' in the 
first sentence as this term reflects where available types and 
practices are shown. The reference to ``Special Provisions'' in the 
second sentence was removed.
    Comment: Several commenters recommended in section 6(c)(2)(iii) 
FCIC consider adding a reference to the insured having to pay 
administrative fees for both CAT and additional levels of coverage if 
both levels are elected on different practices/types of a crop/county. 
The commenters also stated this information is contained in section 
7(a)(5), which might be sufficient, but some indication here might be 
useful.
    Response: Section 7 contains the provisions regarding the payment 
of fees and premium and to avoid any potential conflict or confusion, 
FCIC has elected not to include a separate reference to the fees in 
section 6(c)(2)(iii). No changes have been made.
    Comment: A commenter questioned in section 6(e) if the phrase ``. . 
. and the expected county yield and projected price may change each 
year . . .'' is necessary and recommended the phrase be removed.
    Response: FCIC agrees and has revised the provisions accordingly.
    Comment: Several commenters suggested adding the word ``the'' 
between the words ``Multiply'' and ``dollar'' in section 6(f)(1).
    Response: FCIC agrees and has revised the provision accordingly.
    Comment: A commenter recommended in section 6(g)(2) adding the 
phrase ``of the projected price'' between the phrases ``Notice of 
availability'' and ``will be provided''.
    Response: FCIC agrees and has revised the provisions accordingly.
    Comment: Several commenters recommended in section 6(g)(4) changing 
the phrase ``change your coverage by the sales closing date'' to 
``change your plan of insurance by the sales closing date.'' The 
commenters stated this would be consistent with the same phrase in 
section 6(g)(1).
    Response: FCIC agrees and has revised the provisions accordingly.
Section 7 Annual Premium and Administrative Fees
    Comment: A commenter stated FCIC should consider revising sections 
7(a)(1) and (2) by changing the phrase ``actuarial documents'' to 
``Special Provisions'' to match the CAT Endorsement which state ``. . . 
The administrative fee owed is $300 for each crop in the county unless 
otherwise specified in the Special Provisions.''
    Response: FCIC agrees with the commenter and has revised the 
provisions accordingly. FCIC has also revised the definition of 
``administrative fee'' by changing ``actuarial documents'' to ``Special 
Provisions'' to reflect this change.
    Comment: Several commenters recommended FCIC consider combining the 
information in sections 7(a)(5) and (7) since the limitation of not 
more than one additional administrative fee and one CAT administrative 
fee will apply if a producer elects both for the crop in the county. 
The commenters suggested adding the word ``but'' at the end of (5) 
followed by the statement currently in (7).
    Response: FCIC agrees with the commenters and has revised the 
provisions in section 7(a)(5) to include the provisions proposed in 
section 7(a)(7). FCIC has removed section 7(a)(7) and has also removed 
section 7(a)(6) because this provision duplicates the provision that is 
now contained in redesignated section 7(a)(5)(ii). FCIC has 
redesignated sections 7(a)(8) through 7(a)(10) as sections 7(a)(6) 
through 7(a)(8), respectively.
    Comment: A commenter recommended removing the word ``levels'' from 
section 7(a)(5) since additional level of coverage is composed of 
multiple levels of coverage and the current use may cause confusion.
    Response: FCIC agrees and has revised the provision by removing the 
word ``levels'' from new section 7(a)(5)(i).
    Comment: A commenter stated in section 7(e) the word ``properly'' 
in the phrase ``properly planted'' is subjective and should be removed.
    Response: FCIC agrees with the commenter but will revise the 
provision by removing the entire phrase ``. . . the insured crop is 
properly planted by the final planting date and reported on the acreage 
reporting date . . .'' and replacing it with the phrase ``. . . 
coverage begins . . .'' This will provide better consistency with other 
provisions in ARPI and with the Common Crop Insurance Policy Basic 
Provisions.
Section 8 Report of Acreage and Production
    Comment: Several commenters suggested changing the section heading 
to ``Report of Acreage and Production.''
    Response: FCIC agrees and has changed the heading for section 8 
accordingly.

[[Page 38500]]

    Comment: A commenter stated the multiple references of crop, types 
and practices as shown on the Special Provisions seems redundant to 
have repeated throughout the rule. The commenter recommended adding 
definitions of type and practice and including the phrase ``as shown on 
the Special Provisions'' in the definitions.
    Response: FCIC agrees that the repeated use of some phrases 
throughout the policy can seem redundant. FCIC revised the definitions 
of type and practice to specify they are as shown on the actuarial 
documents, and FCIC has removed some of the redundant phrases 
throughout the provisions.
    Comment: Several commenters noted inconsistencies between the 
definition of ``share'' and section 8. The definition of share states, 
``Your percentage of the insured crop that is at financial risk. 
Premium will be determined on your share as of the acreage reporting 
date. However, only for the purpose of determining the amount of 
indemnity, your share will not exceed your share at the acreage 
reporting date or on the date of harvest, whichever is less.'' The 
commenters noted in section 8(c)(2) the acreage report must include 
``Your share at the time coverage begins.'' The date coverage begins is 
addressed in section 10 and, except for the initial year of application 
(when it is the date the application is submitted and accepted), is the 
date the insured crop is planted. The commenters asked if section 
8(e)(3) allows for revisions to the acreage report to add land acquired 
after the acreage reporting date under certain circumstances, how would 
the producer have had an insurable share ``as of the acreage reporting 
date'' (or on ``the date the insured crop is planted'') on land 
acquired after that date. The commenters further asked based on the 
definition of ``share'' how can coverage be added by a revised acreage 
report if premium is determined on the share as of the acreage 
reporting date, and indemnities cannot exceed the share as of the 
acreage reporting date. The commenters stated perhaps this needs to be 
reworded or otherwise clarified as an exception (as is the case with 
land/shares acquired by Transfer of Right to an Indemnity). Also 
several commenters noted section 8(g)(2) addresses when the share is 
misreported, using the reported share if under-reported and the ``share 
we determine to be correct'' if over-reported, and asked if this is 
separate procedure for this particular situation so it does not have to 
match the share as of acreage reporting date or date of harvest.
    Response: FCIC agrees there are inconsistencies between the 
definition of ``share'' and section 8 and has revised the definition of 
share to state ``Your insurable interest in the insured crop as an 
owner, operator, or tenant.'' FCIC has also added a new section 8(f) 
which states, ``Except as provided in section 8(h), your premium and 
indemnity, if any, will be based on your insured acreage and share on 
your acreage report or section 8(e), if applicable.'' FCIC has also 
redesignated section 8(f) through 8(l) as section 8(g) through 8(m), 
section 8(m) was redesignated as section 8(r), and changed any 
applicable section references accordingly. New section 8(f) clarifies 
how redesignated section 8(h)(2) applies to misreported share.
    Comment: A commenter noted section 8(d) states ``We will not insure 
any acreage of the insured crop planted after the final planting 
date.'' The commenter asked if the planting date now needs to be 
captured to determine if the acreage is insurable based on when the 
insured crop was planted. This section currently does not require that 
the planting date must be reported as a part of the acreage report. The 
commenter stated if capturing the planting date is now required, it 
should be added to this section. The commenter also stated if this is 
now required, it would be another requirement being added under the new 
ARPI program when compared to the existing GRP and GRIP plans of 
insurance. Another commenter asked if replanted acreage seeded after 
the final planting date is covered under ARPI.
    Response: FCIC understands the commenter's concern of adding 
additional requirements and agrees with the commenter that this 
language should be added to require insureds to report the planting 
date on the acreage report to determine if the acreage is insurable. 
FCIC has added the following language ``. . . and the last date any 
acreage of the insured crop was planted and the number of acres planted 
by such date;'' to the end of section 8(c)(1). FCIC does not provide 
for or require replanting under the ARPI rule and the insurable acreage 
will be all the acreage planted on or before the final planting date. A 
parenthetical has been added to clarify that acreage planted for the 
first time after the final planting date must be reported as 
uninsurable.
    Comment: Several commenters had concerns about the ability of the 
insurance provider to revise an acreage report as stipulated in section 
8(e). The commenters stated section 8(e)(2) introduces a subjective 
factor and that without parameters will make it virtually impossible 
for insurance providers to determine that the crop in the county will 
likely produce at least 90 percent of the expected county yield. The 
commenters also asked if the insurance providers could make this 
determination for all the acreage of the insured crop planted in the 
entire county at any time an insured requests revision of the acreage 
report and would the insurance provider be able to reject the revised 
acreage report rather than make this determination. Additionally, the 
commenters questioned the last sentence of section 8(e)(3). The 
commenters questioned if this section is intended to refer to land 
acquired after the acreage reporting date via a Transfer of Right to 
Indemnity, and perhaps meaning that the requirements in section 8(e)(1) 
and 8(e)(2) do not apply. Or is it supposed to mean that a landlord who 
has requested the tenant to insure the landlord's share on the tenant's 
policy per section 9(a)(ii) cannot try to switch that coverage to his/
her own policy (which he/she cannot have as a result) later that year. 
The commenters stated, as worded, it could prevent an insured from 
adding coverage to land acquired by becoming a tenant on a share-rent 
basis because his/her new landlord has coverage on his/her share and 
the previous tenant did not have coverage. Another commenter noted this 
section does not contain provisions for inadvertent error (e.g. 
transposition).
    Response: FCIC agrees that section 8(e)(2) lacks specific 
parameters and would be burdensome to the insurance provider to make 
this kind of determination for the county, and has removed this 
provision. FCIC agrees with including provisions for inadvertent error 
and has revised section 8(e)(2) to address such. The last sentence of 
section 8(e)(3) has been clarified to mean sections 8(e)(1) and 8(e)(2) 
do not apply to a transfer of coverage so there would not be dual 
policies.
    Comment: A commenter recommended changing section 8(g)(1)(i) from 
``A lower liability than the actual, correct liability determined, the 
production guarantee or amount of insurance on the unit . . .'' to ``A 
lower liability than the actual, correct liability determined, the 
amount of insurance on the unit . . .''
    Response: FCIC agree with the commenter that redesignated section 
8(h)(1)(i) was in error but in addition FCIC also notes that other 
parts of this provision were in error as well. FCIC has revised 
redesignated section 8(h)(1)(i) and removed the entire phrase ``the 
production guarantee or amount of insurance on the unit'' and replaced 
with the phrase ``the policy protection''

[[Page 38501]]

as this term better reflects the liability under an area plan and since 
units are not applicable.
    Comment: Several commenters questioned the order of sections 
8(i)(2) and 8(i)(3) as it seems to be in reverse chronological order 
when compared to the similar sections contained in the Common Crop 
Insurance Policy Basic Provisions.
    Response: FCIC agrees and will reverse the order by moving the 
provisions in redesignated section 8(j)(2) to 8(j)(3) and moving the 
provisions from redesignated section 8(j)(3) to 8(j)(2).
    Comment: Several commenters recommended adding a hyphen in the 
first phrase of ``. . . on-farm measurement . . .'' to match the same 
phrase in the rest of sections 8(i)(5)(i) and 8(i)(5)(ii).
    Response: FCIC agrees and has revised redesignated section 
8(j)(5)(i) accordingly.
    Comment: Many commenters noted that production reporting is a 
significant conceptual difference from what was required under GRP or 
GRIP and questioned how FCIC intends to implement this new requirement. 
The commenters stated the provisions or underwriting guidelines need to 
specify how production or potential production will be handled. The 
commenters asked how will acreage that has been pastured or destroyed 
and will not go to harvest be accounted for and if FCIC will expect 
insurance providers to appraise this acreage. The commenters asked how 
FCIC expects to correlate corn production that was harvested as hay, 
fodder, silage, or earlage. The commenters asked if FCIC intends to use 
the same production forms as used for crops insured under the Common 
Crop Insurance Policy. The commenters also stated the ARPI Basic 
Provisions should include definitions for ``production report'' and 
``production reporting date.'' The commenters asked if reported 
production by types and practices will correspond to the same types and 
practices as other plans of insurance that require production 
reporting, and how will differences in units between individual and 
area plans be handled. The commenters also asked if producers elect 
ARPI as new insureds will be required to provide a production report 
for the initial year of coverage, or if production reporting will only 
apply to carryover insureds. The commenters stated this provision seems 
to apply only to carryover insureds, as new insureds would not receive 
the policy provisions containing the production reporting requirement 
until after they provide an acceptable application. The commenters also 
asked if ARPI production reports will be subject to APH reviews and 
whether they will be considered valid certified production reports that 
can subsequently be used for individual plans of insurance if a 
producer elects to change the next year. The commenters asked if the 
yields reported for this program will be subject to the APH rules as 
outlined in the Crop Insurance Handbook for individual plans of 
insurance.
    Response: FCIC procedures will provide production reporting 
requirements including procedures for production, potential production, 
and how ARPI production reports will be used if an insured subsequently 
transfers to other plans of insurance that use an individual production 
guarantee. FCIC does not plan to require insurance providers to perform 
appraisals. In situations where acreage has been destroyed or pastured 
and will not be harvested, an insured will be required to report the 
acreage as unharvested in accordance with FCIC procedures. FCIC 
anticipates that similar production reporting forms used for the Common 
Crop Insurance Policy will be used for ARPI. FCIC has added definitions 
for the terms ``production report'' and ``production reporting date'' 
to the ARPI Basic Provisions. The insurable types and practices of a 
crop insured under an area plan of insurance have, in the past, been 
different from individual plans of insurance. FCIC intends to use 
similar types and practices by crop between area and individual plans 
of insurance. All insureds will provide a production report by the 
production reporting date at the conclusion of the crop production 
cycle of the current crop year. FCIC anticipates ARPI production 
reports being subject to the requirements of Appendix IV of the 
Standard Reinsurance Agreement, and FCIC will work with insurance 
providers as appropriate.
    Comment: Many commenters expressed concerns about production 
reporting for forge and livestock producers. A commenter stated they 
agree that the yields for the ``major'' crops should be reported, but 
reporting the yields for forage crops will be burdensome as it is too 
cumbersome and difficult to accurately keep track of three or four 
harvest cycles of forage. This requirement will cause producers to 
either not purchase coverage as they are unwilling or unable to 
accurately report their yields or to simply guess at a yield because 
whatever value they report will not change their insurance coverage. 
Another commenter stated that requiring production reports under ARPI 
for forage production could prove problematic. Many producers feed 
their forage to livestock, and have, in the past, elected to insure it 
under an area plan of insurance in order to avoid the requirement to 
provide livestock feeding records which are difficult and time 
consuming to provide the required detail in order to be considered 
adequate records.
    Response: FCIC recognizes there may be certain crops, like forage 
for which production reporting may be problematic. FCIC has added the 
following phrase ``. . . unless otherwise specified in the Special 
Provisions, . . .'' to section 8(l). This additional language will 
allow FCIC to exclude certain crops from production reporting if stated 
on the Special Provisions.
    Comment: Several commenters suggested in section 8(k) changing the 
phrase ``on the date'' to ``by the date'' to be consistent with the 
same phrase in section 8(l).
    Response: FCIC agrees and has revised redesignated section 8(l) 
accordingly.
    Comment: Several commenters noted sections 8(k) and 8(l) refer to 
the deadline for submitting production reports as ``the date specified 
in the Special Provisions'' and it is unclear what date on the Special 
Provisions is being referenced since a sample Special Provisions was 
not provided. A commenter suggested giving this date a name 
designation, i.e. production reporting date. Several commenters 
questioned how the ARPI production reporting date will correspond with 
the ARPI acreage reporting dates, end of insurance period dates, dates 
of normal harvest, and dates by which any ARPI claim will be settled. 
The commenters recommended making the production reporting dates for 
ARPI similar to the dates for individual plans of insurance and having 
a common date would be beneficial in administering this new requirement 
for the insured, agent, and insurance provider. Another commenter 
encouraged FCIC to coordinate reporting with USDA, so the producer is 
not required to provide multiple reports of the same information, and a 
single report containing the necessary information for multiple 
agencies is desirable.
    Response: FCIC agrees the date is unclear and in both redesignated 
sections 8(l) and 8(m) has changed the phrase ``. . . the date 
specified in the Special Provisions . . .'' to ``. . . the production 
reporting date specified in the actuarial documents . . .'' The end of 
insurance and harvest dates are not applicable to ARPI, but the 
production reporting date by crop will be a date in advance of the 
final county yield and

[[Page 38502]]

final county revenue determination date specified in the ARPI Crop 
Provisions. FCIC is working toward having a common production reporting 
date by crop for all plans of insurance. FCIC is striving to establish 
common reporting of information consistent with the ACRSI and will also 
keep in consideration the common reporting of production consistent 
with USDA requirements and practices.
    Comment: Numerous comments were received that expressed concern 
regarding the provisions in section 8(l) which indicate that if an 
insured does not submit a production report by the required date, the 
yield used to determine the final county yield will be equal to the 
expected county yield and the insured would not be eligible for any 
potential indemnity. The commenters assumed insureds would still be 
required to pay their premium even though they could not receive an 
indemnity, which is a severe penalty, especially when the reported 
production has no bearing on the amount of coverage offered under ARPI. 
Several commenters stated this penalty for not reporting yields is 
excessive and unjust since yields are needed for program integrity, not 
the insured's insurability. A commenter noted that under individual 
plans of insurance where the insured's yields are used to establish the 
coverage offered, if the production is not reported then an assigned 
yield of seventy-five percent is applied to the previous years approved 
yield, but coverage continues to be offered at a reduced amount. The 
commenter recommended a more reasonable approach would be to allow the 
insured to have coverage but limit the coverage to the lowest 
protection factor. Another commenter suggested a one-year grace period 
before elimination of a potential indemnity for failure to report 
production. Another commenter encouraged insureds to report annual 
production information and also encouraged FCIC to establish procedures 
for late reporting due to extenuating circumstances that would allow an 
indemnity to be paid. Another commenter suggested in section 8(l) 
adding the word ``harvest'' in front of the word ``price.''
    Response: FCIC agrees the proposed penalty for not reporting 
production could be considered excessive. FCIC agrees that a more 
reasonable penalty would be to limit coverage. FCIC has revised the 
provisions in redesignated section 8(m) that involve the failure to 
provide a production report to no longer deny the indemnity but instead 
to limit the following year's protection factor to the lowest 
protection factor offered. FCIC will consider procedures for instances 
of late reporting, and FCIC may allow late reporting under certain 
circumstances such as widespread late harvesting in an area and has 
added language to allow such discretion. In addition, FCIC has added 
new sections 8(n) through 8(p), which include provisions for inaccurate 
production reports, lack of verifiable records, and misreported 
production reports similar to the Common Crop Insurance Policy Basic 
Provisions. FCIC has also added new section 8(q) which includes 
provisions for not reporting production or misreporting production and 
then changing to another plan of insurance the following year. FCIC 
agrees with the commenter's suggestion of having a grace period. FCIC 
will allow a one-year grace period the initial crop year of ARPI 
implementation before imposing provisions for failing to report 
production. Regarding the comment of adding the word ``price'' before 
``harvest'' FCIC removed from redesignated section 8(m) the phrase 
containing the word ``price'' so it is not necessary to add the word 
``harvest'' before the word ``price.''
    Comment: Several commenters questioned what are the ``errors'' 
being referenced in section 8(m) as the word error is not used anywhere 
else in this section. The commenters suggested adding clarification as 
to what the errors are or in which sections those errors are listed. 
One commenter suggested adding some additional text as errors in 
reporting extend beyond acreage but to remove the reference to yield, 
as this section does not address yield errors. The commenter suggested 
revising the first sentence to state, ``Errors in reporting acreage, 
share, and other information required in this section, may be corrected 
by us at the time we become aware of such errors.''
    Response: FCIC agrees and has revised redesignated section 8(n) as 
suggested providing more clarification of what errors may be corrected 
by the insurance provider.
Section 9 Share Insured
    Comment: A comment was received regarding differing shares and how 
share must be reported separately and not combined or commingled with 
other shares. The commenter stated this has caused problems in the past 
with single line reporting and as the new policy requires production 
reported by farm, tract, and field (CLU) so should the acreage report.
    Response: FCIC is unsure about the commenter's question as FCIC 
does not require production reported by farm, tract, and field (CLU) 
and FCIC already has language in section 8(c) that requires acreage 
reporting by share. No changes have been made.
    Comment: Several commenters stated the reference in section 
9(b)(2)(i) to sections 18(a)(1) and (2) is incorrect since those 
sections do not exist in the ARPI Basic Provisions.
    Response: FCIC agrees and has updated the reference to section 
18(c)(1) and (2) in the provisions.
    Comment: Several commenters requested deleting the comma following 
``etc.'' at the end of the parenthetical phrase in section 9(c).
    Response: FCIC agrees with the commenters and has revised the 
provisions accordingly.
Section 10 Insurance Period
    Comment: Several commenters noted section 10 specifies when ARPI 
coverage begins but asked should there not also be some indication of 
when the insurance period ends.
    Response: FCIC believes an end of insurance period is unnecessary 
since there is no individual loss adjustment performed for area plans 
of insurance. The insurance period effectively ends when harvest is 
generally complete for the area and FCIC determines the final county 
revenues or final county yields. No changes have been made.
Section 11 Causes of Loss
    Comment: Several commenters questioned the phrase ``natural 
occurrences'' in section 11(a). One commenter asked how is a loss of 
revenue that is price or market driven related or caused by natural 
occurrences, and are natural occurrences and natural causes the same 
thing. Several commenters asked if there is no need to specify the 
natural occurrences that are considered insured causes of loss other 
than excluding failure to follow good farming practices. The commenters 
also asked why producers would be required to submit their individual 
production history as proposed when this indicates that information is 
unrelated. Another commenter recommended moving the word ``widespread'' 
from before the phrase ``loss of revenue or'' to after the phrase.
    Response: FCIC agrees the wording in section 11(a) is confusing. 
Section 508(a) of the Act expressly states that insurance is only 
available for flood, drought, or other natural disaster. This would 
apply to both area and individual plans of insurance. FCIC agrees that 
the term ``widespread'' is ambiguous and instead has revised the 
provisions to clarify that there must be a natural cause of loss that 
results in the final county

[[Page 38503]]

yield or final county revenue less than the trigger yield or trigger 
revenue. The prices used to establish the dollar amount of insurance 
and whether an indemnity is due are generally based on the commodity 
markets and are presumed to be the result of natural causes. FCIC is 
not certain what the commenters mean when they say the requirement to 
submit individual production records is unrelated. However, if the 
commenters mean the submission of individual production records is 
unnecessary to calculate the guarantee or the indemnity, the commenter 
are correct, but the individual production record could be used as part 
of the determination for the area wide guarantee and indemnity.
    Comment: A commenter asked how the insurance provider will make a 
failure to follow good farming practices determination based on section 
11(b) considering losses are triggered at the county level and 
individual loss adjustment or inspections do not apply. Another 
commenter noted the word ``count'' should be changed to ``county'' 
Several commenters suggested adding commas before the phrase ``. . . or 
planting. . . '' and after the phrase ``. . . expected county yield. . 
.''.
    Response: Section 508(a)(3) of the Act provides that failure of the 
producer to follow good farming practices is not a covered cause of 
loss. This requirement applies to all plans of insurance offered by 
FCIC. While individual loss adjustment and inspections are not required 
under ARPI, insurance providers are authorized to perform growing 
season inspections. However, there have been numerous instances where 
FCIC or insurance providers have learned that producers may be using 
practices that do not qualify as good farming practices. If there are 
any questions, the definition of ``good farming practices'' allows the 
producer or the insurance provider to contact FCIC to determine whether 
or not production methods used by the producer will be considered to be 
good farming practices. FCIC agrees with the commenter that the word 
``count'' should be ``county'' and agrees with the other commenter's 
suggestion of the added commas, and has revised the provisions 
accordingly.
Section 12 Triggers, Final Policy Protection, Payment Factor, and 
Indemnity Calculations
    Comment: Several commenters stated producers may question why they 
are required to submit their production records since individual farm 
revenues and yields are not considered when calculating losses under 
ARPI.
    Response: FCIC agrees that individual farm revenues and yields are 
not considered when calculating losses under ARPI, but with the 
possibility of less available data from other sources such as NASS and 
producers seeking expansion of ARPI and separation of practices, 
additional credible data is required and the only source of such data 
may be within the crop insurance program. Many producers already keep 
this information on a year-to-year basis and many insurance providers 
also maintain records containing this information to use when producers 
need their actual production history when changing to an individual 
plan of insurance.
    Comment: Several commenters stated FCIC should change the semicolon 
at the end of section 12(b) to a colon.
    Response: FCIC agrees and has revised the provisions accordingly.
Section 13 Indemnity and Premium Limitations
    Comment: Several commenters suggested FCIC add a comma after the 
phrase ``two of the last four crop years'' in section 13(d)(2).
    Response: FCIC agrees and has revised the provisions accordingly.
Section 14 Organic Farming Practices
    Comment: Several commenters noted section 14(c) identifies 
certified organic, transitional acreage, and buffer zone acreage as 
being insurable under the organic farming practice. The commenters 
stated FCIC needs to resolve section 14(e) since it says to separate 
certified organic and transitional acreage on the acreage report but 
makes no mention of how to report buffer zone acreage.
    Response: FCIC agrees and has removed section 14(e) as this section 
is redundant with section 8(c) which already requires the reporting of 
acreage by practice. Any insurable or uninsurable buffer zone acreage 
will be reported as part of the practice that it buffers.
Section 15 Yields
    Comment: Several commenters commended FCIC's decision to utilize 
additional data sources beyond only the county level production data 
provided by NASS. The commenters stated NASS county estimates have 
proved to be unreliable and likely contributed to area plans of 
insurance being discontinued in some locations. Several commenters 
stated that FCIC's proposal to incorporate their own data, as well as 
other USDA sources, will improve the accuracy and reliability of the 
yield estimates and ultimately the program's performance. Several 
commenters stated they would also encourage FCIC to explore the 
possibility of also relying on data from the FSA and classing data from 
the USDA Agricultural Marketing Service, and for cotton to use NASS 
data on cotton ginnings. Several commenters stated that while they 
encourage FCIC to explore the use of additional data, they requested 
that FCIC publish their methodology, their sources for arriving at 
county yield estimates, and their explanation for any discrepancies 
with NASS. They stated it is important that there be sufficient 
transparency regarding any adjustments to the data or methods used to 
resolve discrepancies among various USDA data, as well as possible 
other data sources.
    Response: FCIC appreciates the support for its efforts. ARPI was 
written to provide FCIC with the flexibility to use the most credible 
yield data available in the future for providing insurance offers and 
determining indemnities. FCIC will continue to evaluate yield data 
sources but it is not possible to publish the methodology used to 
determine area yields because it will depend on the source of the data, 
the credibility, and numerous other factors. However, anyone can 
request the methodology used to establish any particular yield.
    Comment: A commenter urged FCIC to make every effort to preserve 
the accuracy and reliability of the yield estimation process. The 
commenter stated that while not perfect, NASS datasets provide the 
longest most consistent record of production in a county and should 
continue to be the basis from which county yield estimates are 
calculated. The proposed use of alternative data sets should be used 
primarily to verify the accuracy of the calculations made by NASS. The 
commenter then stated when FCIC identifies inaccuracies, FCIC should 
publish the methodology they use to resolve such discrepancies in order 
to ensure the ongoing support and understanding of producers and 
insurance providers.
    Response: FCIC needs the flexibility to use data sources other than 
NASS yield data, because of questions regarding its continued 
availability, requests for expansion, and the division of practices. 
However, FCIC plans to continue to use NASS yield data in the future 
for area plans of insurance but it may use other sources of data if 
they are more credible.
    Comment: Several commenters stated FCIC should review expected 
county yields with the goal of ensuring that long-term trends produce 
expected county yields that are indicative of

[[Page 38504]]

current levels. Another commenter stated a ten-year APH yield should be 
assigned to each individual county as they are more reliable and 
reflect up-to-date cultural practices and production trends.
    Response: As stated above, FCIC plans to use the most credible data 
and methodology to establish yields and will consider the suggestions 
in this process.
    Comment: A commenter stated the expected county yields should 
closely reflect recent yield history and not use long term, historical 
data that penalizes producers for recent variety and production 
innovations and does not provide adequate insurance coverage.
    Response: As stated above, FCIC plans to use the most credible data 
and methodology to establish yields and will consider the suggestions 
in this process.
    Comment: Several commenters stated throughout this entire section, 
it is implied that FCIC retains sole discretion in determining 
credibility, application, and source of data utilized in establishing 
yields. This approach is open-ended and subjective. The commenters 
stated the provisions need to include the specific criteria FCIC will 
utilize in making these determinations as well as prioritize and list 
all data sources that might be considered.
    Response: FCIC agrees that the approach appears open-ended and 
subjective but RMA cannot predict what data sources may be available in 
the future and what may best reflect the expected or final yields in a 
county. Therefore, flexibility is needed to ensure that the best 
available data can be used. FCIC has rewritten this section to specify 
that the actuarial documents will show what data source will be used 
for determining the yield and that data source will remain consistent 
throughout the insurance period unless unforeseen events occur that 
would result in the need for other data sources to be used. The 
methodology used to adjust any yield is available upon request.
    Comment: Several commenters stated if the language in section 15(b) 
is going to allow FCIC to make an exception in the data source used for 
a specific county in any given crop year, then the commenters suggested 
section 15(a) should be changed from ``Yields used under this insurance 
program for a crop, may be based on'' to ``Yields used under this 
insurance program for a crop generally will be based on.'' Another 
commenter stated FCIC should consider expanding the authority in 
section 15(b) to include nationwide determinations. Also, the 
commenters stated the phrase ``not withstanding'' should be changed to 
one word.
    Response: FCIC agrees with the commenters that the yields section 
is unclear. FCIC will revise the language currently in section 15(b) to 
be clearer when it is applicable and revise the rest of section 15 to 
clarify how the yields are established.
    Comment: Several commenters made suggestions regarding changing 
section 15(d). One commenter stated it is one thing to suggest data 
used to establish the expected yield is no longer available to 
establish the final county yield but to suggest the data used to 
establish the expected yield was not credible to begin with is 
something else entirely. The commenter suggested deleting the phrase 
``or credible'' or clarify by saying FCIC determined the data is no 
longer credible due to changes occurring during the crop year. Several 
commenters asked when will insurance providers and producers be 
notified that the data source identified in the actuarial documents is 
not available or credible so that FCIC will determine the final county 
yield based on the most accurate data available.
    Response: FCIC agrees and for clarity has revised the provisions in 
redesignated section 15(b). A provision has been added to specify that 
FCIC with provide notice of the data source used to establish the final 
county yield, if different from the data source used to establish the 
expected county yield, and the reason for the change when it publishes 
the final county yields.
    Comment: Several commenters objected to section 15(h) which states, 
``If there is not credible data available from any source, as 
determined at the sole discretion of FCIC, to establish the final 
county yield in accordance with this section, no coverage for the crop 
year will be provided and your premium will be refunded.'' The 
commenters stated it is unreasonable to make this determination at the 
end of the crop year and justify it by merely returning the producer's 
premium. If this possibility exists, the decision should be made at the 
beginning of the crop year to not offer ARPI coverage so producers can 
make other risk management decisions including electing another plan of 
insurance. Another commenter asked when will this determination be made 
and would this present problems for producers whose loans were 
dependent on their having crop insurance.
    Response: FCIC agrees and has removed this provision from the rule. 
FCIC will still provide coverage and FCIC will determine the final 
county yields based on the most accurate data available from a data 
source determined by FCIC.
Section 16 Assignment of Indemnity
    Comment: Several comments recommended making ``lienholder'' one 
word throughout section 16.
    Response: FCIC agrees and has revised the provisions accordingly.
Section 18 Other Insurance
    Comment: A commenter noted this proposed policy does not allow 
multiple policies issued or reinsured by FCIC for the same crop in the 
county. The commenter stated they would encourage FCIC to consider 
allowing producers to combine various crop insurance policies to obtain 
the desired coverage level for the crop. The commenter suggested 
wording the restriction like ``no persons may have in force more than 
one insurance policy issued or reinsured by FCIC covering the same 
portion of crop revenue or yield, in the same county/parish for the 
same crop year.''
    Response: The commenter is proposing a substantive change that 
would require a legislative change because the Act currently only 
allows producers to elect area or individual coverage but not both. No 
change was made.
    Comment: A commenter recommended in sections 18(c)(1) and (2) 
changing the phrase ``additional level of coverage policy'' to 
``additional coverage policy'' and changing the phrase ``CAT level of 
coverage policy'' to ``CAT policy.''
    Response: FCIC agrees and has revised the provisions accordingly.
Section 20 Notices
    Comment: Several commenters stated section 20(a)(2) is not 
grammatically correct and suggest adding the word ``the'' to the start 
of the sentence.
    Response: FCIC agrees and has revised the provisions accordingly. 
In addition, FCIC has revised section 20(b) to be consistent with 
revisions to the contract change provisions contained in section 3. All 
of the policy information that is subject to change contained in 
section 3(b) is now viewable on RMA's Web site and available in a crop 
insurance agent's office. Therefore, insurance providers will no longer 
have to provide a written notice of the changes to this policy 
information unless the insurance provider does not have the means to 
transmit such information by electronic means or the producer elects to 
receive a paper copy of such policy information. These changes will 
reduce the burden of excess distribution of paper policy materials.

[[Page 38505]]

Section 21 Access to Insured Crop and Records, and Record Retention
    Comment: Several commenters asked FCIC to consider if there is a 
way to abbreviate the phrase ``any employee of USDA authorized to 
investigate or review any matter related to crop insurance'' which is 
repeated five times throughout sections 21(a) thru (d). The commenters 
suggested after the first occurrence referring and using ``authorized 
employee of USDA'' or adding a definition in section 1.
    Response: FCIC agrees with the commenters and after the first 
occurrence has changed the phrase ``any employee of USDA authorized to 
investigate or review any matter related to crop insurance'' to 
``authorized employee of USDA'' in sections 21(b) thru 21(d).
    Comment: Several commenters noted in section 21(e) the ARPI 
provisions state the failure to provide needed records will result in a 
determination that no indemnity is due for those acres in which the 
records are not provided. The commenters stated this is different from 
similar provisions in the Common Crop Insurance Policy Basic Provisions 
which states that no indemnity is due for the crop year in which such 
failure occurred. The commenters stated the APRI language implies that 
some insured acreage on a policy or even a type or practice may still 
be eligible for an indemnity but some acreage may not. The commenters 
recommended the provisions need to specify how unavailability of any 
particular record will be allocated to any specific acreage on the 
policy.
    Response: FCIC agrees with the commenters and has removed the 
phrases ``maintain or provide any required records'' and ``no indemnity 
is due for those acres in which the records are not provided'' and has 
revised this provisions to be consistent with the Common Crop Insurance 
Policy Basic Provisions.
Section 23 Mediation, Arbitration, Appeal, Reconsideration, and 
Administrative and Judicial Review
    Comment: Several commenters suggested FCIC combine sections 23(a) 
and (b) by putting the language in section 23(b) immediately after the 
last sentence in section 23(a).
    Response: FCIC agrees with the commenters and has moved all the 
language from section 23(b) to the end of section 23(a). However, FCIC 
has separated section 23(a) into paragraphs to improve readability. 
FCIC has also redesignated sections 23(c) through 23(h) as sections 
23(b) through 23(g), respectively.
    Comment: A commenter stated in section 23(c) it seems somewhat 
redundant to repeat the phrase ``what constitutes a good farming 
practice'' five times throughout section 23(c) even though this is 
comparable to the Common Crop Insurance Policy Basic Provisions. The 
commenter suggested FCIC delete the repeated phrase.
    Response: FCIC has considered this change but does not know how it 
can revise redesignated section 23(b) by removing the phrase ``what 
constitutes a good practice'' without substantially reducing clarity. 
No change has been made.
    Comment: Several commenters suggested in the last sentence of 
section 23(e)(3)(iii) deleting the word ``to'' and the word ``is'' from 
the phrase ``you must to request a determination of non-appealability 
from the Director of the National Appeals Division is not later than''.
    Response: FCIC agrees and has revised the provisions in 
redesignated section 23(d)(3)(iii) accordingly.
    Comment: Several commenters noted in section 23(f) the phrases 
``this policy'' and ``your policy'' are used which is consistent with 
the Common Crop Insurance Policy Basic Provisions. The commenters 
suggested in the last sentence changing the phrase ``your policy'' to 
``this policy.''
    Response: FCIC has considered this change but it does not 
substantially clarify the rule or improve readability. No change has 
been made.
Section 24 Interest Limitations
    Comment: Several commenters stated the opening sentence in the 
first paragraph in section 24 should end with the phrase ``as specified 
in the applicable Crop Provisions'' instead of ``as specified on the 
applicable crop provisions.''
    Response: FCIC agrees and has revised the provisions accordingly.
Section 28 Concealment, Misrepresentation, or Fraud
    Comment: A commenter recommended adding a comma in section 28(e) 
after the phrase ``If you willfully and intentionally provide false or 
inaccurate information to us.''
    Response: FCIC agrees and has revised the provision.
Section 407.11 Area Risk Protection Insurance for Corn
Corn Crop Provisions Section 2--Insured Crop
    Comment: Several commenters asked FCIC to consider rephrasing 
section 2(b) to avoid referencing section 2(a)(1) twice.
    Response: FCIC has considered this change and because section 2(b) 
is corn other than what is referenced in section 2(a)(1) but it 
references a corn type that is similar to that referenced in section 
2(a)(1), there needs to be the second cross reference to section 
(2)(a)(1) to distinguish between the high-oil and high-protein corn 
insured in sections 2(a)(1) and 2(b). No change has been made.
    Comment: Several commenters recommended moving section 2(b)(1) to 
the end of section 2(b) before the colon and then renumbering sections 
2(b)(2) and 2(b)(3) accordingly as sections 2(b)(1) and 2(b)(2).
    Response: FCIC agrees and has revised the provisions accordingly.
Section 407.12 Area Risk Protection Insurance for Cotton
Cotton Crop Provisions--Section 2--Insured Crop
    Comment: Several commenters questioned why two situations in a list 
of what is not insured in the GRP Cotton Crop Provisions were omitted 
from the ARPI Cotton Crop Provisions. The two omitted situations were 
``Grown on acreage in which a hay crop was harvested in the same 
calendar year unless the acreage is irrigated'' and ``Grown on acreage 
on which a small grain crop reached the heading stage in the same 
calendar year unless the acreage is irrigated or adequate measures are 
taken to terminate the small grain crop prior to heading and less than 
50 percent of the small grain plants reach the heading stage.'' The 
commenters asked are these planting practices considered insurable 
under ARPI or are they perhaps going to be moved to the Special 
Provisions.
    Response: FCIC agrees and has added these provisions to section 
2(b). There may be areas where these practices are insurable and they 
will be specified in the Special Provisions.
    Comment: Several commenters recommended moving section 2(c)(1) to 
the end of section 2(c) before the colon and then renumbering sections 
2(c)(2) and 2(c)(3) accordingly as sections 2(c)(1) and 2(c)(2). 
Commenters also noted a period should be added to the end of section 
2(c)(2).
    Response: FCIC agrees and has revised the provisions accordingly.
Section 407.13 Area Risk Protection Insurance for Forage
Forage Crop Provisions--General
    Comment: A commenter asked why forage is included in this product, 
and will forage be limited to the AYP. The commenter also asked why 
sugarcane is

[[Page 38506]]

not included as an insurable ARPI crop since sugar is traded on the 
commodities market giving sugarcane an advantage over forage.
    Response: FCIC included forage as an insurable crop under ARPI 
because forage was an insurable crop with active business under GRP. 
FCIC will only offer AYP for forage. Sugarcane is not an insurable crop 
under ARPI because sugarcane is insured under an area plan of insurance 
submitted by a private party under section 508(h) of the Act.
Forage Crop Provisions--Section 1 Definitions
    Comment: Several commenters noted the definition of ``planted 
acreage'' has information that overlaps with the same term in the ARPI 
Basic Provisions. The commenters asked why the word ``spread'' is used 
instead of the word ``placed'' in the phrase ``land on which seed is 
initially spread.'' The commenters also asked why the word ``proper'' 
is used instead of the word ``correct'' in the phrase ``incorporated 
into the soil in a timely manner and at the proper depth.''
    Response: FCIC agrees with the commenter that the definition of 
``planted acreage'' in the Crop Provisions overlaps with the same term 
in the Basic Provisions and the definition is not necessary in the 
Forage Crop Provisions. FCIC has removed the definition of ``planted 
acreage'' from the Crop Provisions.
Forage Crop Provisions--Section 7 Annual Premium
    Comment: A commenter stated the phrase ``in lieu of section 7(f) of 
the ARPI Basic Provisions'' is incorrect and should read ``in lieu of 
section 7(e) of the ARPI Basic Provisions.''
    Response: FCIC agrees and has revised the provisions accordingly.
Section 407.15 Area Risk Protection Insurance for Grain Sorghum
    Grain Sorghum Crop Provisions--Section 2 Insured Crop
    Comment: Several commenters recommended moving section 2(b)(1) to 
the end of section 2(b) before the colon and then renumbering sections 
2(b)(2) and 2(b)(3) accordingly as sections 2(b)(1) and 2(b)(2).
    Response: FCIC agrees and has revised the provisions accordingly.
Section 407.16 Area Risk Protection Insurance for Soybean
Soybean Crop Provisions--Section 1 Definitions
    Comment: Several commenters noted the definition of ``planted 
acreage'' has information that overlaps with the same term in the ARPI 
Basic Provisions. The commenters asked why is the word ``spread'' used 
instead of the word ``placed'' in the phrase ``land on which seed is 
initially spread.'' The commenters also asked why the word ``proper'' 
is used instead of the word ``correct'' in the phrase ``incorporated 
into the soil in a timely manner and at the proper depth.''
    Response: FCIC defined ``planted acreage'' in the Crop Provisions 
to allow for insurable methods of planting acreage that are in addition 
to the definition of ``planted acreage'' contained in the Basic 
Provisions. The language noted by the commenters has not been revised 
but FCIC has added the phrase ``unless otherwise specified in the 
Special Provisions'' to disallow insurability of the planted acreage as 
defined in the Crop Provisions if necessary in certain areas.
Section 407.17 Area Risk Protection Insurance for Wheat
Wheat Crop Provisions--Section 1 Definitions
    Comment: Several commenters noted the definition of ``planted 
acreage'' has information that overlaps with the same term in the ARPI 
Basic Provisions and may not be sound. The commenters asked why is the 
word ``spread'' used instead of the word ``placed'' in the phrase 
``land on which seed is initially spread.'' The commenters also asked 
why the word ``proper'' is used instead of the word ``correct'' in the 
phrase ``incorporated into the soil in a timely manner and at the 
proper depth.''
    Response: FCIC defined ``planted acreage'' in the Crop Provisions, 
to allow for insurable methods of planting acreage that are in addition 
to the definition of ``planted acreage'' contained in the Basic 
Provisions. The language noted by the commenters has been revised and 
is worded similar to the definition of ``planted acreage'' contained in 
the Crop Provisions used for wheat individual plans of insurance. No 
change has been made.
    In addition to the changes described above, FCIC has made the 
following changes to the ARPI Insurance Regulations:
    1. Since FCIC does not approve insurance forms, FCIC has revised 
paragraph (a) of part 407.8 to clarify the application for insurance 
form is developed in accordance with standards established by FCIC.
    In addition to the changes described above, FCIC has made the 
following changes to the ARPI Basic Provisions:
    1. FCIC revised the definition of ``payment factor'' to include 
that this factor will be no greater than 1.0. This change will provide 
clarity in ARPI indemnity calculations.
    2. FCIC added the following language, ``unless otherwise specified 
in the Special Provisions'' to the end of the definition of policy 
protection. This additional language will allow FCIC the flexibility to 
modify as appropriate the method of calculating the policy protection 
in the event of regulatory changes from subsequent Farm Bill 
legislation.
    3. FCIC is in the process of revising ineligibility provisions in 7 
CFR Part 400 Subpart U, and as a result FCIC has made the following 
ARPI changes to section 2. FCIC revised section 2(k)(1)(i)(B) by 
replacing the language, ``. . . overpaid indemnity . . .'' with, ``. . 
. overpaid indemnity and any other amounts due, including but not 
limited to, premium billed with a delinquent date after the termination 
date for the crop year in which premium is earned, . . .'' FCIC revised 
section 2(k)(2)(i)(B) by adding the following language, ``. . . 
including but not limited to, premium billed with a delinquent date 
after the termination date for the crop in which premium is earned, . . 
.'' after ``For a policy with other amounts due, . . .'' FCIC revised 
section 2(p) by adding the word ``voidance'' at the beginning and 
replacing the word ``violation'' with ``. . . your policy is voided due 
to a conviction . . .''
    4. In section 5(c)(4), added parentheticals around the phrase 
``e.g., if the first insured crop under this policy consists of 40 
acres, or the first insured crop unit insured under another policy 
contains 40 planted acres, then no second crop can be insured on any of 
the 40 acres.''
    5. Changed the title of section 7 from ``Administrative Fees and 
Annual Premium'' to ``Annual Premium and Administrative Fees'' to be 
consistent with the section of the same name in the Common Crop 
Insurance Policy Basic Provisions.
    6. FCIC identified a payment factor calculation error for Area 
Revenue Protection in section 12(g)(1)(iii). Using the expected county 
revenue in section 12(g)(1)(iii) was in error as the incorrect answer 
is derived when the harvest price is greater than the projected price 
for the Area Revenue Protection plan of insurance. FCIC split out and 
moved the payment factor calculation for Area Revenue Protection with 
the Harvest Price Exclusion from section 12(g)(1) to section 12(g)(2) 
and redesignated the payment factor calculation for Area Yield 
Protection from section 12(g)(2) to new section 12(g)(3). FCIC replaced 
using expected county revenue

[[Page 38507]]

contained in section 12(g)(1)(iii) with the new calculation of 
multiplying the expected county yield by the greater of projected or 
harvest price. FCIC added a new section 12(g)(1)(iv) to multiply the 
results of (ii) and (iii). FCIC redesigned the rest of section 12(g)(1) 
accordingly and any cross-references accordingly. For new section 
12(g)(2)(iii), FCIC replaced using expected county revenue with the new 
calculation of multiplying the expected county yield by the projected 
price. The remaining portion of new section 12(g)(2) was made similar 
to section 12(g)(1).
    7. FCIC has added section 22 for [FCIC policies].
    8. In accordance with the Food, Conservation, and Energy Act of 
2008 (also known as the 2008 Farm Bill), the premium billing date for 
many crops were moved to August 15th. Section 22(a)(1) had specified 
that interest would start to accrue the first day of the month 
following the premium billing date. This results in producers having 
only 15 days to pay their premium before interest will start to accrue. 
As a result, FCIC has revised section 22(a)(1) by adding language that 
will provide a minimum of 30 days from the premium billing date before 
interest will start to accrue on premium amounts or administrative fees 
owed to FCIC.
    9. FCIC has added section 23 for [FCIC policies].
    10. As a result of the payment factor calculation error found in 
section 12(g)(1), FCIC has revised the indemnity calculation examples 
in section 30 for Area Revenue Protection and Area Revenue Protection 
with Harvest Price Exclusion accordingly. For the Area Revenue 
Protection example this change results in the payment factor contained 
in step nine changing from .371 to .385 and the indemnity in step ten 
changing from $26,371 to $27,367. For the Area Revenue Protection with 
Harvest Price Exclusion example the calculation changes result in no 
change to the payment factor or indemnity.
    In addition to the changes described above, FCIC has made the 
following changes to the ARPI Crop Provisions:
    1. Currently there are two acreage reporting dates for forage 
production. For forage production insured under the individual plans of 
insurance there is a fall acreage reporting date, and for forage 
production insured under the area plans of insurance there is a spring 
acreage reporting date. FCIC is evaluating a common acreage reporting 
date for forage production insured under the individual plans of 
insurance and under the area plans of insurance to meet the ACRSI 
effort to standardize information collection across the USDA. In order 
to facilitate any future changes to the ARPI forage acreage reporting 
date, FCIC added the phrase ``or as specified in the Special 
Provisions'' to section 6 of the Forage Crop Provisions to allow for 
the modification of program dates by the Special Provisions.
    2. FCIC has determined that section 3 in each of the Crop 
Provisions is unnecessary and has removed this section and renumbered 
the remaining sections accordingly in each of the Crop Provisions.
    3. FCIC has revised redesignated section 3 of all the Crop 
Provisions to allow the payment determination dates and indemnity 
payment dates to be changed if specified otherwise in the Special 
Provisions.
    Good cause is shown to make this rule effective less than 30 days 
after publication in the Federal Register. Good cause to make a rule 
effective less than 30 days after publication in the Federal Register 
exists when the 30-day delay in the effective date is impracticable, 
unnecessary, or contrary to the public interest.
    With respect to the provisions of this final rule, it would be 
contrary to the public interest to delay its implementation because 
public interest is served by implementing the new Area Risk Protection 
Insurance product which does the following: (1) Replaces the GRP and 
GRIP plans of insurance by offering Area Revenue Protection, Area 
Revenue Protection with the Harvest Price Exclusion, or Area Yield 
Protection, all within one Basic Provisions and the applicable Crop 
Provisions whereby reducing the amount of information for a producer to 
read to make risk management decisions; (2) establish common crop 
pricing between plans of insurance; (3) improve program performance; 
and (4) reduce fraud, waste, and abuse. Delaying the implementation of 
these provisions, which make a sounder, more stable program, would be 
contrary to the public interest.
    If FCIC is required to delay the implementation of this rule until 
30 days after the date of publication, the provisions of this rule 
could not be implemented until the 2015 crop year for those crops 
having a contract change date prior to the effective date of this 
publication.
    For the reasons stated above, good cause exists to make these 
policy changes effective upon publication in the Federal Register.

List of Subjects in 7 CFR Part 407

    Crop insurance, Reporting and recordkeeping requirements.

Final Rule

    Accordingly, as set forth in the preamble, the Federal Crop 
Insurance Corporation revises 7 CFR part 407, Group Risk Plan of 
Insurance Regulations effective for the 2014 and succeeding crop years, 
to read as follows:

PART 407--AREA RISK PROTECTION INSURANCE REGULATIONS

Sec.
407.1 Applicability.
407.2 Availability of Federal crop insurance.
407.3 Premium rates, amounts of protection, and coverage levels.
407.4 OMB control numbers.
407.5 Creditors.
407.6 [Reserved]
407.7 The contract.
407.8 The application and policy.
407.9 Area risk protection insurance policy.
407.10 Area risk protection insurance for barley.
407.11 Area risk protection insurance for corn.
407.12 Area risk protection insurance for cotton.
407.13 Area risk protection insurance for forage.
407.14 Area risk protection insurance for peanuts.
407.15 Area risk protection insurance for grain sorghum.
407.16 Area risk protection insurance for soybean.
407.17 Area risk protection insurance for wheat.

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


Sec.  407.1  Applicability.

    The provisions of this part are applicable only to those crops for 
which a Crop Provision is contained in this part and the crop years 
specified.


Sec.  407.2  Availability of Federal crop insurance.

    (a) Insurance shall be offered under the provisions of this part on 
the insured crop in counties within the limits prescribed by and in 
accordance with the provisions of the Federal Crop Insurance Act (7 
U.S.C. 1501-1524) (Act). The crops and counties shall be designated by 
the Manager of the Federal Crop Insurance Corporation (FCIC) from those 
approved by the Board of Directors of FCIC.
    (b) The insurance is offered through insurance providers reinsured 
by the FCIC that offer contracts containing the same terms and 
conditions as the contract set out in this part. These contracts are 
clearly identified as being reinsured by FCIC. FCIC may offer the 
contract for coverage contained in this part and part 402 of this 
chapter directly to the insured through the Department of Agriculture 
if the Secretary

[[Page 38508]]

determines that the availability of local agents is not adequate. Those 
contracts are specifically identified as being offered by FCIC.
    (c) No person may have in force more than one insurance policy 
issued or reinsured by FCIC on the same crop for the same crop year, in 
the same county, unless specifically approved in writing by FCIC.
    (d) Except as specified in paragraph (c) of this section, if a 
person has more than one contract authorized under the Act that 
provides coverage for the same loss on the same crop for the same crop 
year in the same county, all such contracts shall be voided for that 
crop year and the person will be liable for the premium on all 
contracts, unless the person can show to the satisfaction of the FCIC 
that the multiple contracts of insurance were without the fault of the 
person.
    (1) If the multiple contracts of insurance are shown to be without 
the fault of the person and:
    (i) One contract is an additional coverage policy and the other 
contract is a Catastrophic Risk Protection policy, the additional 
coverage policy will apply if both policies are with the same insurance 
provider, or if not, both insurance providers agree, and the 
Catastrophic Risk Protection policy will be canceled (If the insurance 
providers do not agree, the policy with the earliest date of 
application will be in force and the other contract will be canceled); 
or
    (ii) Both contracts are additional coverage policies or both are 
Catastrophic Risk Protection policies, the contract with the earliest 
signature date on the application will be valid and the other contract 
on that crop in the county for that crop year will be canceled, unless 
both policies are with the same insurance provider and the insurance 
provider agrees otherwise or both policies are with different insurance 
providers and both insurance providers agree otherwise.
    (2) No liability for indemnity or premium will attach to the 
contracts canceled as specified in paragraphs (d)(1)(i) and (ii) of 
this section.
    (e) The person must repay all amounts received in violation of this 
section with interest at the rate contained in the contract (see Sec.  
407.9, section 22).
    (f) A person whose contract with FCIC or with an insurance provider 
reinsured by FCIC under the Act has been terminated because of 
violation of the terms of the contract is not eligible to obtain crop 
insurance under the Act with FCIC or with an insurance provider 
reinsured by FCIC unless the person can show that the termination was 
improper and should not result in subsequent ineligibility.
    (g) All applicants for insurance under the Act must advise the 
insurance provider, in writing at the time of application, of any 
previous applications for insurance or contracts of insurance under the 
Act within the last 5 years and the present status of any such 
applications or insurance.


Sec.  407.3  Premium rates, amounts of protection, and coverage levels.

    (a) The Manager of FCIC shall establish premium rates, amounts of 
protection, and coverage levels for the insured crop that will be 
included in the actuarial documents on file in the agent's office. 
Premium rates, amounts of protection, and coverage levels may be 
changed from year to year in accordance with the terms of the policy.
    (b) At the time the application for insurance is made, the person 
must elect an amount of protection and a coverage level from among 
those contained in the actuarial documents for the crop year.


Sec.  407.4  OMB control numbers.

    The information collection activity associated with this rule has 
been submitted to OMB for their review and approval.


Sec.  407.5  Creditors.

    An interest of a person in an insured crop existing by virtue of a 
lien, mortgage, garnishment, levy, execution, bankruptcy, involuntary 
transfer or other similar interest shall not entitle the holder of the 
interest to any benefit under the contract.


Sec.  407.6  [Reserved]


Sec.  407.7  The contract.

    (a) The insurance contract shall become effective upon the 
acceptance by FCIC or the insurance provider of a complete, duly 
executed application for insurance on a form prescribed or approved by 
FCIC.
    (b) The contract shall consist of the accepted application, Area 
Risk Protection Insurance Basic Provisions, Crop Provisions, Special 
Provisions, Actuarial Documents, and any amendments, endorsements, or 
options thereto.
    (c) Changes made in the contract shall not affect its continuity 
from year to year.
    (d) No indemnity shall be paid unless the person complies with all 
terms and conditions of the contract.
    (e) The forms required under this part and by the contract are 
available at the office of the insurance provider, or such other 
location as specified by FCIC, if applicable.


Sec.  407.8  The application and policy.

    (a) Application for insurance, developed in accordance with 
standards established by FCIC, must be made by any person who wishes to 
participate in the program in order to cover such person's share in the 
insured crop as landlord, owner-operator, tenant, or other crop 
ownership interest.
    (1) No other person's interest in the crop may be insured under the 
application.
    (2) To obtain coverage, the application must be submitted to the 
insurance provider on or before the applicable sales closing date on 
file in the insurance provider's local office.
    (b) FCIC or the insurance provider may reject, no longer accept 
applications, or cancel existing insurance contracts upon the FCIC's 
determination that the insurance risk is excessive. Such determination 
must be made not later than 15 days before the cancellation date for 
the crop and may be made on an area, county, state, or crop basis.


Sec.  407.9  Area risk protection insurance policy.

    This insurance is available for the 2014 and succeeding years.

[FCIC policies]

Department of Agriculture

Federal Crop Insurance Corporation

Area Risk Protection Insurance Policy

[Reinsured policies]

(Appropriate title for insurance provider)

(This is a continuous policy. Refer to Section 2.)

[FCIC policies]
    Area Risk Protection Insurance (ARPI) provides protection against 
widespread loss of revenue or widespread loss of yield in a county. 
Individual farm revenues and yields are not considered under ARPI and 
it is possible that your individual farm may experience reduced revenue 
or reduced yield and you do not receive an indemnity under ARPI.
    This is an insurance policy issued by the FCIC, a United States 
government agency, under the provisions of the Federal Crop Insurance 
Act (7 U.S.C. 1501-1524) (Act). All provisions of the policy and rights 
and responsibilities of the parties are specifically subject to the 
Act. The provisions of the policy may not be waived or modified in any 
way by us, your insurance agent or any employee of USDA. Procedures 
(handbooks, underwriting rules, manuals, memoranda, and bulletins),

[[Page 38509]]

issued by us and published on the Risk Management Agency's (RMA) Web 
site at https://www.rma.usda.gov/ or a successor Web site, will be used 
in the administration of this policy, including the adjustment of any 
loss or claim submitted hereunder. Throughout this policy, ``you'' and 
``your'' refer to the insured shown on the accepted application and 
``we,'' ``us,'' and ``our'' refer to FCIC. Unless the context indicates 
otherwise, the use of the plural form of a word includes the singular 
and the singular form of the word includes the plural.
    AGREEMENT TO INSURE: In return for the commitment to pay a premium, 
and subject to all of the provisions of this policy, we agree with you 
to provide the insurance as stated in this policy. If there is a 
conflict among the Act, the regulations published at 7 CFR chapter IV, 
and the procedures as issued by us, the order of priority is: (1) the 
Act; (2) the regulations; and (3) the procedures as issued by us, with 
(1) controlling (2), etc. If there is a conflict between the policy 
provisions published at 7 CFR part 407 and the administrative 
regulations published at 7 CFR part 400, the policy provisions 
published at 7 CFR part 407 control. The order of priority among the 
policy is: (1) the Catastrophic Risk Protection Endorsement, as 
applicable; (2) Special Provisions; (3) actuarial documents; (4) the 
applicable Commodity Exchange Price Provisions; (5) the Crop 
Provisions; and (6) these Basic Provisions, with (1) controlling (2), 
etc.

[Reinsured policies]
    Area Risk Protection Insurance (ARPI) provides protection against 
widespread loss of revenue or widespread loss of yield in a county. 
Individual farm revenues and yields are not considered under ARPI and 
it is possible that your individual farm may experience reduced revenue 
or reduced yield and not receive an indemnity under ARPI.
    This insurance policy is reinsured by the FCIC under the provisions 
of Subtitle A of the Federal Crop Insurance Act (7 U.S.C. 1501-1524) 
(Act). All provisions of the policy and rights and responsibilities of 
the parties are specifically subject to the Act. The provisions of the 
policy may not be waived or varied in any way by us, our insurance 
agent or any other contractor or employee of ours or any employee of 
USDA. We will use the procedures (handbooks, underwriting rules, 
manuals, memoranda, and bulletins), as issued by FCIC and published on 
the Risk Management Agency (RMA's) Web site at https://www.rma.usda.gov/ 
or a successor Web site, in the administration of this policy, 
including the adjustment of any loss or claim submitted hereunder. In 
the event that we cannot pay your loss because we are insolvent or are 
otherwise unable to perform our duties under our reinsurance agreement 
with FCIC, FCIC will become your insurer, make all decisions in 
accordance with the provisions of this policy, including any loss 
payments, and be responsible for any amounts owed. No state guarantee 
fund will be liable for your loss.
    Throughout this policy, ``you'' and ``your'' refer to the insured 
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer 
to the insurance provider providing insurance. Unless the context 
indicates otherwise, the use of the plural form of a word includes the 
singular and the singular form of the word includes the plural.
    AGREEMENT TO INSURE: In return for the commitment to pay a premium, 
and subject to all of the provisions of this policy, we agree with you 
to provide the insurance as stated in this policy. If there is a 
conflict among the Act, the regulations published at 7 CFR chapter IV, 
and the procedures as issued by FCIC, the order of priority is: (1) the 
Act; (2) the regulations; and (3) the procedures as issued by FCIC, 
with (1) controlling (2), etc. If there is a conflict between the 
policy provisions published at 7 CFR part 407 and the administrative 
regulations published at 7 CFR part 400, the policy provisions 
published at 7 CFR part 407 control. The order of priority among the 
policy is: (1) the Catastrophic Risk Protection Endorsement, as 
applicable; (2) Special Provisions; (3) actuarial documents; (4) 
Commodity Exchange Price Provisions; (5) the Crop Provisions; and (6) 
these Basic Provisions, with (1) controlling (2), etc.

Terms and Conditions

Basic Provisions
1. Definitions
    Abandon. Failure to continue to care for the crop, or providing 
care so insignificant as to provide no benefit to the crop.
    Acreage report. A report required by section 8 of these Basic 
Provisions that contains, in addition to other required information, 
your report of your share of all acreage of an insured crop in the 
county, whether insurable or not insurable.
    Acreage reporting date. The date contained in the actuarial 
documents by which you are required to submit your acreage report.
    Act. Subtitle A of the Federal Crop Insurance Act (7 U.S.C. 1501-
1524).
    Actuarial documents. The part of the policy that contains 
information for the crop year which is available for public inspection 
in your agent's office and published on RMA's Web site, https://www.rma.usda.gov/, and which shows available plans of insurance, 
coverage levels, information needed to determine amounts of insurance, 
prices, premium rates, premium adjustment percentages, type (commodity 
types, classes, subclasses, intended uses), practice (irrigated 
practices, cropping practices, organic practices, intervals), insurable 
acreage, and other related information regarding crop insurance in the 
county.
    Additional coverage. A level of coverage greater than catastrophic 
risk protection.
    Administrative fee. An amount you must pay for catastrophic risk 
protection, and additional coverage for each crop year as specified in 
section 7 of these provisions, the Catastrophic Risk Protection 
Endorsement, or the Special Provisions, as applicable.
    Agricultural experts. Persons who are employed by the Cooperative 
Extension System or the agricultural departments of universities, or 
other persons approved by FCIC, whose research or occupation is related 
to the specific crop or practice for which such expertise is sought. 
Persons who have a personal or financial interest in you or the crop 
will not qualify as an agricultural expert. For example, contracting 
with a person for consulting would be considered to have a financial 
interest and a person who is a neighbor would be considered to have a 
personal interest.
    Application. The form required to be completed by you and accepted 
by us before insurance coverage will commence. This form must be 
completed and filed in your agent's office not later than the sales 
closing date of the initial insurance year for each crop for which 
insurance coverage is requested.
    Area. The general geographical region in which the insured acreage 
is located, designated generally as a county but may be a smaller or 
larger geographical area as specified in the actuarial documents.
    Area Revenue Protection. A plan of insurance that provides 
protection against loss of revenue due to a county level production 
loss, a price decline, or a combination of both. This plan also 
includes upside harvest price protection, which increases your policy 
protection at the end of the insurance period if the harvest price is 
greater than the projected price and if there is a production loss.
    Area Revenue Protection with the Harvest Price Exclusion. A plan of

[[Page 38510]]

insurance that provides protection against loss of revenue due to a 
county level production loss, price decline, or a combination of both. 
This plan does not provide upside harvest price protection.
    Area Risk Protection Insurance (ARPI). Insurance coverage based on 
an area, not an individual, yield or revenue amount. There are three 
plans of insurance available under ARPI: Area Revenue Protection, Area 
Revenue Protection with the Harvest Price Exclusion, and Area Yield 
Protection.
    Area Yield Protection. A plan of insurance that provides protection 
against loss of yield due to a county level production loss. This plan 
does not provide protection against loss of revenue or upside harvest 
price protection.
    Assignment of indemnity. A transfer of policy rights, made on our 
form, and effective when approved by us in writing, whereby you assign 
your right to an indemnity payment for the crop year only to creditors 
or other persons to whom you have a financial debt or other pecuniary 
obligation.
    Buffer zone. A parcel of land, as designated in your organic plan, 
that separates commodities grown under organic practices from 
commodities grown under non-organic practices, and used to minimize the 
possibility of unintended contact by prohibited substances or 
organisms.
    Cancellation date. The calendar date specified in the Crop 
Provisions on which coverage for the crop will automatically renew 
unless canceled in writing by either you or us or terminated in 
accordance with the policy terms.
    Catastrophic risk protection (CAT). Coverage equivalent to 65 
percent of yield coverage and 45 percent of price coverage, unless 
otherwise specified in the Special Provisions, and is the minimum level 
of coverage offered by FCIC, as specified in the actuarial documents 
for the crop, type, and practice. CAT is not available with Area 
Revenue Protection or Area Revenue Protection with the Harvest Price 
Exclusion.
    Catastrophic Risk Protection Endorsement. The part of the crop 
insurance policy that contains provisions of insurance that are 
specific to CAT.
    Certified organic acreage. Acreage in the certified organic farming 
operation that has been certified by a certifying agent as conforming 
to organic standards in accordance with 7 CFR part 205.
    Certifying agent. A private or governmental entity accredited by 
the USDA Secretary of Agriculture for the purpose of certifying a 
production, processing or handling operation as organic.
    Class. A specific subgroup of commodity type.
    Code of Federal Regulations (CFR). The codification of general 
rules published in the Federal Register by the Executive departments 
and agencies of the Federal Government. Rules published in the Federal 
Register by FCIC are contained in 7 CFR chapter IV. The full text of 
the CFR is available in electronic format at https://ecfr.gpoaccess.gov/
.
    Commodity. An agricultural good or product that has economic value.
    Commodity Exchange Price Provisions (CEPP). A part of the policy 
that is used for crops for which ARPI is available, unless otherwise 
specified. This document includes the information necessary to derive 
the projected and harvest price for the insured crop, as applicable.
    Commodity type. A specific subgroup of a commodity having a 
characteristic or set of characteristics distinguishable from other 
subgroups of the same commodity.
    Consent. Approval in writing by us allowing you to take a specific 
action.
    Contract. (See ``Policy'')
    Contract change date. The calendar date, as specified in the Crop 
Provisions, by which changes to the policy, if any, will be made 
available in accordance with section 3 of these Basic Provisions.
    Conventional farming practice. A system or process that is 
necessary to produce a commodity, excluding organic farming practices.
    Cooperative Extension System. A nationwide network consisting of a 
state office located at each state's land-grant university, and local 
or regional offices. These offices are staffed by one or more 
agricultural experts who work in cooperation with the National 
Institute of Food and Agriculture, and who provide information to 
agricultural producers and others.
    County. Any county, parish, political subdivision of a state, or 
other area specified on the actuarial documents shown on your accepted 
application, including acreage in a field that extends into an 
adjoining county if the county boundary is not readily discernible.
    Cover crop. A crop generally recognized by agricultural experts as 
agronomically sound for the area for erosion control or other purposes 
related to conservation or soil improvement. A cover crop may be 
considered to be a second crop.
    Credible data. Data of sufficient quality and quantity to be 
representative of the county.
    Crop. The insurable commodity as defined in the Crop Provisions.
    Cropping practice. A method of using a combination of inputs such 
as fertilizer, herbicide, and pesticide, and operations such as 
planting, cultivation, etc. to produce the insured crop. The insurable 
cropping practices are specified in the actuarial documents.
    Crop Provisions. The part of the policy that contains the specific 
provisions of insurance for each insured crop.
    Crop year. The period within which the insured crop is normally 
grown and designated by the calendar year in which the crop is normally 
harvested.
    Days. Calendar days.
    Delinquent debt. Has the same meaning as the term defined in 7 CFR 
part 400, subpart U.
    Dollar amount of insurance per acre. The guarantee calculated by 
multiplying the expected county yield by the projected price and by the 
protection factor. Your dollar amount of insurance per acre is shown on 
your Summary of Protection. Following release of the harvest price, 
your dollar amount of insurance may increase if Area Revenue Protection 
was purchased and the harvest price is greater than the projected 
price.
    Double crop. Producing two or more crops for harvest on the same 
acreage in the same crop year.
    Expected county revenue. The expected county yield multiplied by 
the projected price.
    Expected county yield. The yield, established in accordance with 
section 15, contained in the actuarial documents on which your coverage 
for the crop year is based.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
corporation within USDA.
    Final county revenue. The revenue determined by multiplying the 
final county yield by the harvest price with the result used to 
determine whether an indemnity will be due for Area Revenue Protection 
and Area Revenue Protection with the Harvest Price Exclusion, and 
released by FCIC at a time specified in the Crop Provisions.
    Final county yield. The yield, established in accordance with 
section 15, for each insured crop, type, and practice, used to 
determine whether an indemnity will be due for Area Yield Protection, 
and released by FCIC at a time specified in the Crop Provisions.
    Final planting date. The date contained in the actuarial documents 
for

[[Page 38511]]

the insured crop by which the crop must be planted in order to be 
insured.
    Final policy protection. For Area Revenue Protection only, the 
amount calculated in accordance with section 12(e).
    First insured crop. With respect to a single crop year and any 
specific crop acreage, the first instance that a commodity is planted 
for harvest or prevented from being planted and is insured under the 
authority of the Act. For example, if winter wheat that is not insured 
is planted on acreage that is later planted to soybeans that are 
insured, the first insured crop would be soybeans. If the winter wheat 
was insured, it would be the first insured crop.
    FSA. The Farm Service Agency, an agency of the USDA, or a successor 
agency.
    FSA farm number. The number assigned to the farm by the local FSA 
office.
    Generally recognized. When agricultural experts or organic 
agricultural experts, as applicable, are aware of the production method 
or practice and there is no genuine dispute regarding whether the 
production method or practice allows the crop to make normal progress 
toward maturity.
    Good farming practices. The production methods utilized to produce 
the insured crop, type, and practice and allow it to make normal 
progress toward maturity, which are: (1) for conventional or 
sustainable farming practices, those generally recognized by 
agricultural experts for the area; or (2) for organic farming 
practices, those generally recognized by organic agricultural experts 
for the area or contained in the organic plan. We may, or you may 
request us to, contact FCIC to determine whether or not production 
methods will be considered to be ``good farming practices.''
    Harvest price. A price determined in accordance with the CEPP and 
used to determine the final county revenue.
    Household. A domestic establishment including the members of a 
family (parents, brothers, sisters, children, spouse, grandchildren, 
aunts, uncles, nieces, nephews, first cousins, or grandparents, related 
by blood, adoption or marriage, are considered to be family members) 
and others who live under the same roof.
    Insurable interest. Your percentage of the insured crop that is at 
financial risk.
    Insurable loss. Damage for which coverage is provided under the 
terms of your policy, and for which you accept an indemnity payment.
    Insurance provider. A private insurance company that has been 
approved by FCIC to provide insurance coverage to producers 
participating in programs authorized by the Act.
    Insured. The named person as shown on the application accepted by 
us. This term does not extend to any other person having an insurable 
interest in the crop (e.g., a partnership, landlord, or any other 
person) unless specifically indicated on the accepted application.
    Insured crop. The crop in the county for which coverage is 
available under your policy as shown on the application accepted by us.
    Intended use. The expected end use or disposition of the commodity 
at the time the commodity is reported.
    Interval. A period of time designated in the actuarial documents.
    Irrigated practice. A method of producing a crop by which water, 
from an adequate water source, is artificially applied in sufficient 
amounts by appropriate and adequate irrigation equipment and facilities 
and at the proper times necessary to produce at least the (1) yield 
expected for the area; (2) yield used to establish the production 
guarantee or amount of insurance/coverage on the irrigated acreage 
planted to the commodity; or (3) producer's established approved yield, 
as applicable. Acreage adjacent to water, such as but not limited to a 
pond, lake, river, stream, creek or brook, shall not be considered 
irrigated based solely on the proximity to the water. The insurable 
irrigation practices are specified in the actuarial documents.
    Liability. (See ``Policy protection.'')
    Limited resource farmer. Has the same meaning as the term defined 
by USDA at https://www.lrftool.sc.egov.usda.gov or a successor Web site.
    Loss limit factor. Unless otherwise specified in the Special 
Provisions a factor of .18 is used to calculate the payment factor. 
This factor represents the percentage of the expected county yield or 
expected county revenue at which no additional indemnity amount is 
payable. For example, if the expected county yield is 100 bushels and 
the final county yield is 18 bushels, then no additional indemnity is 
due even if the yield falls below 18 bushels. The total indemnity will 
never be more than 100 percent of the final policy protection.
    NASS. National Agricultural Statistics Service, an agency within 
USDA, or its successor, that publishes the official United States 
Government yield estimates.
    Native sod. Acreage that has no record of being tilled (determined 
in accordance with FSA or other verifiable records acceptable to us) 
for the production of an annual crop on or before May 22, 2008, and on 
which the plant cover is composed principally of native grasses, grass-
like plants, forbs, or shrubs suitable for grazing and browsing.
    Offset. The act of deducting one amount from another amount.
    Organic agricultural experts. Persons who are employed by the 
following organizations: Appropriate Technology Transfer for Rural 
Areas, Sustainable Agriculture Research and Education or the 
Cooperative Extension System, the agricultural departments of 
universities, or other persons approved by FCIC, whose research or 
occupation is related to the specific organic crop or practice for 
which such expertise is sought.
    Organic crop. A commodity that is organically produced consistent 
with section 2103 of the Organic Foods Act of 1990 (7 U.S.C. 6502).
    Organic farming practice. A system of plant production practices 
used to produce an organic crop that is approved by a certifying agent 
in accordance with 7 CFR part 205.
    Organic plan. A written plan, in accordance with the National 
Organic Program published in 7 CFR part 205, that describes the organic 
farming practices that you and a certifying agent agree upon annually 
or at such other times as prescribed by the certifying agent.
    Organic practice. The insurable organic farming practices specified 
in the actuarial documents.
    Organic standards. Standards in accordance with the Organic Foods 
Production Act of 1990 (7 U.S.C. 6501 et seq.) and 7 CFR part 205.
    Payment factor. A factor no greater than 1.0 used to determine the 
amount of indemnity to be paid in accordance with section 12(g).
    Perennial crop. A plant, bush, tree or vine crop that has a life 
span of more than one year.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a State 
or a political subdivision or agency of a State. ``Person'' does not 
include the United States Government or any agency thereof.
    Planted acreage. Except as otherwise specified in the Special 
Provisions, land in which seed, plants, or trees have been placed, 
appropriate for the insured crop and planting method, at the correct 
depth, into a seedbed that has been properly prepared for the planting 
method and production practice in accordance with good farming 
practices for the area.
    Policy. The agreement between you and us to insure a commodity and 
consisting of the accepted application,

[[Page 38512]]

these Basic Provisions, the Crop Provisions, the Special Provisions, 
the CEPP, other applicable endorsements or options, the actuarial 
documents for the insured commodity, the CAT Endorsement, if 
applicable, and the applicable regulations published in 7 CFR chapter 
IV. Insurance for each commodity in each county will constitute a 
separate policy.
    Policy protection. The liability amount calculated in accordance 
with section 6(f) unless otherwise specified in the Special Provisions.
    Practice. Production methodologies used to produce the insured crop 
consisting of unique combinations of irrigated practice, cropping 
practice, organic practice, and interval as shown on the actuarial 
documents as insurable.
    Prairie Pothole National Priority Area. Consists of specific 
counties within the States of Iowa, Minnesota, Montana, North Dakota, 
South Dakota, or any other county as specified on the RMA's Web site at 
https://www.rma.usda.gov/, or a successor Web site, or the Farm Service 
Agency, Agricultural Resource Conservation Program 2-CRP (Revision 4), 
dated April 28, 2008, or a subsequent publication.
    Premium billing date. The earliest date upon which you will be 
billed for insurance coverage based on your acreage report. The premium 
billing date is contained in the actuarial documents.
    Production report. A written record showing your annual production 
in accordance with section 8. The report contains yield information for 
the current year, including acreage and production. This report must be 
supported by written verifiable records from a warehouseman or buyer of 
the insured crop, by measurement of farm-stored production, or by other 
records of production approved by us in accordance with FCIC approved 
procedures.
    Production reporting date. The date contained in the actuarial 
documents by which you are required to submit your production report.
    Prohibited substance. Any biological, chemical, or other agent that 
is prohibited from use or is not included in the organic standards for 
use on any certified organic, transitional or buffer zone acreage. 
Lists of such substances are contained at 7 CFR part 205.
    Projected price. A price for each crop, type, and practice as shown 
in the actuarial documents, as applicable, determined in accordance 
with the CEPP, Special Provisions or the Crop Provisions, as 
applicable.
    Protection factor (PF). The percentage you choose that is used to 
calculate the dollar amount of insurance per acre and policy 
protection.
    Replanted crop. The same commodity replanted on the same acreage as 
the first insured crop for harvest in the same crop year. ARPI does not 
have a replant provision, therefore, it is only used for first and 
second crop determinations.
    RMA. Risk Management Agency, an agency within USDA.
    RMA's Web site. A Web site hosted by RMA and located at https://www.rma.usda.gov/ or a successor Web site.
    Sales closing date. The date contained in the actuarial documents 
by which an application must be filed and the last date by which you 
may change your crop insurance coverage for a crop year.
    Second crop. With respect to a single crop year, the next 
occurrence of planting any commodity for harvest following a first 
insured crop on the same acreage. The second crop may be the same or a 
different commodity as the first insured crop, except the term does not 
include a replanted crop. A cover crop, planted after a first insured 
crop and planted for the purpose of haying, grazing or otherwise 
harvesting in any manner or that is hayed or grazed during the crop 
year, or that is otherwise harvested is considered to be a second crop. 
A cover crop that is covered by FSA's noninsured crop disaster 
assistance program (NAP) or receives other USDA benefits associated 
with forage crops will be considered as planted for the purpose of 
haying, grazing or otherwise harvesting. A crop meeting the conditions 
stated herein will be considered to be a second crop regardless of 
whether or not it is insured.
    Share. Your insurable interest in the insured crop as an owner, 
operator, or tenant.
    Special Provisions. The part of the policy that contains specific 
provisions of insurance for each insured crop that may vary by 
geographic area, and is available for public inspection in your agent's 
office and published on RMA's Web site.
    State. The state shown on your accepted application.
    Subclass. A specific subgroup of class.
    Subsidy. The portion of the total premium that FCIC will pay in 
accordance with the Act.
    Subsidy factor. The percentage of the total premium paid by FCIC as 
a subsidy.
    Substantial beneficial interest. An interest held by any person of 
at least 10 percent in you (e.g., there are two partnerships that each 
have a 50 percent interest in you and each partnership is made up of 
two individuals, each with a 50 percent share in the partnership. In 
this case, each individual would be considered to have a 25 percent 
interest in you, and both the partnerships and the individuals would 
have a substantial beneficial interest in you. The spouses of the 
individuals would not be considered to have a substantial beneficial 
interest unless the spouse was one of the individuals that made up the 
partnership. However, if each partnership is made up of six individuals 
with equal interests, then each would only have an 8.33 percent 
interest in you and although the partnership would still have a 
substantial beneficial interest in you, the individuals would not for 
the purposes of reporting in section 2). The spouse of any individual 
applicant or individual insured will be presumed to have a substantial 
beneficial interest in the applicant or insured unless the spouses can 
prove they are legally separated or otherwise legally separate under 
the applicable state dissolution of marriage laws. Any child of an 
individual applicant or individual insured will not be considered to 
have a substantial beneficial interest in the applicant or insured 
unless the child has a separate legal interest in such person.
    Summary of protection. Our statement to you specifying the insured 
crop, dollar amount of insurance per acre, policy protection, premium 
and other information obtained from your accepted application, acreage 
report, and the actuarial documents.
    Sustainable farming practice. A system or process for producing a 
commodity, excluding organic farming practices, that is necessary to 
produce the crop and is generally recognized by agricultural experts 
for the area to conserve or enhance natural resources and the 
environment.
    Tenant. A person who rents land from another person for a share of 
the crop or a share of the proceeds of the crop (see the definition of 
``share'' above).
    Termination date. The calendar date contained in the Crop 
Provisions upon which your insurance ceases to be in effect because of 
nonpayment of any amount due us under the policy.
    Tilled. The termination of existing plants by plowing, disking, 
burning, application of chemicals, or by other means to prepare acreage 
for the production of an annual crop.
    Total premium. The amount of premium before subsidy, calculated in 
accordance with section 7(e)(1).
    Transitional acreage. Acreage on which organic farming practices 
are

[[Page 38513]]

being followed that does not yet qualify to be designated as organic 
acreage.
    Trigger revenue. The revenue amount calculated in accordance with 
section 12(b).
    Trigger yield. The yield amount calculated in accordance with 
section 12(c).
    Type. Categories of the insured crop consisting of unique 
combinations of commodity type, class, subclass, and intended use as 
shown on the actuarial documents as insurable.
    Upside harvest price protection. Coverage provided automatically 
under the Area Revenue Protection plan of insurance. This coverage 
increases your final policy protection when the harvest price is 
greater than the projected price. This coverage is not available under 
either the Area Revenue Protection with the Harvest Price Exclusion or 
the Area Yield Protection plans of insurance.
    USDA. United States Department of Agriculture.
    Verifiable records. Has the same meaning as the term defined in 7 
CFR part 400, subpart G.
    Void. When the policy is considered not to have existed for a crop 
year.
    Volatility factor. A measure of variation of price over time found 
in the actuarial documents.
2. Life of Policy, Cancellation, and Termination
    (a) This is a continuous policy and will remain in effect for each 
crop year following the acceptance of the original application until 
canceled by you in accordance with the terms of the policy or 
terminated by operation of the terms of the policy or by us. In 
accordance with section 3, FCIC may change the coverage provided from 
year to year.
    (b) The following information must be included on your application 
for insurance or your application will not be accepted and no coverage 
will be provided:
    (1) Your election of Area Revenue Protection, Area Revenue 
Protection with the Harvest Price Exclusion, or Area Yield Protection;
    (2) The crop with all type and practice combinations insured as 
shown on the actuarial documents;
    (3) Your elected coverage level;
    (4) Your elected protection factor;
    (5) Identification numbers for you as follows:
    (i) You must include your social security number (SSN) if you are 
an individual (if you are an individual applicant operating as a 
business, you must provide an employer identification number (EIN) and 
you must also provide your SSN); or
    (ii) You must include your EIN if you are a person other than an 
individual;
    (6) Identification numbers for all persons who have a substantial 
beneficial interest in you:
    (i) The SSN for individuals; or
    (ii) The EIN for persons other than individuals and the SSNs for 
all individuals that comprise the person with the EIN if such 
individuals also have a substantial beneficial interest in you; and
    (7) All other information required on the application to insure the 
crop.
    (c) With respect to SSNs or EINs required on your application:
    (1) Your application will not be accepted and no insurance will be 
provided for the year of application if the application does not 
contain your SSN or EIN. If your application contains an incorrect SSN 
or EIN for you, your application will be considered not to have been 
accepted, no insurance will be provided for the year of application and 
for any subsequent crop years, as applicable, and such policies will be 
void if:
    (i) Such number is not corrected by you; or
    (ii) You correct the SSN or EIN but:
    (A) You cannot prove that any error was inadvertent (Simply stating 
the error was inadvertent is not sufficient to prove the error was 
inadvertent); or
    (B) It is determined that the incorrect number would have allowed 
you to obtain disproportionate benefits under the crop insurance 
program, you are determined to be ineligible for insurance or you could 
avoid an obligation or requirement under any State or Federal law;
    (2) With respect to persons with a substantial beneficial interest 
in you:
    (i) The insurance coverage for all crops included on your 
application will be reduced proportionately by the percentage interest 
in you of persons with a substantial beneficial interest in you 
(presumed to be 50 percent for spouses of individuals) if the SSNs or 
EINs of such persons are included on your application, the SSNs or EINs 
are correct, and the persons with a substantial beneficial interest in 
you are ineligible for insurance;
    (ii) Your policies for all crops included on your application, and 
for all applicable crop years, will be void if the SSN or EIN of any 
person with a substantial beneficial interest in you is incorrect or is 
not included on your application and:
    (A) Such number is not corrected or provided by you, as applicable;
    (B) You cannot prove that any error or omission was inadvertent 
(Simply stating the error or omission was inadvertent is not sufficient 
to prove the error or omission was inadvertent); or
    (C) Even after the correct SSN or EIN is provided by you, it is 
determined that the incorrect or omitted SSN or EIN would have allowed 
you to obtain disproportionate benefits under the crop insurance 
program, the person with a substantial beneficial interest in you is 
determined to be ineligible for insurance, or you or the person with a 
substantial beneficial interest in you could avoid an obligation or 
requirement under any State or Federal law; or
    (iii) Except as provided in sections 2(c)(2)(ii)(B) and (C), your 
policies will not be voided if you subsequently provide the correct SSN 
or EIN for persons with a substantial beneficial interest in you and 
the persons are eligible for insurance;
    (d) When any of your policies are void under section 2(c):
    (1) You must repay any indemnity that may have been paid for all 
applicable crops and crop years;
    (2) Even though the policies are void, you will still be required 
to pay an amount equal to 20 percent of the premium that you would 
otherwise be required to pay; and
    (3) If you previously paid premium or administrative fees, any 
amount in excess of the amount required in section 2(d)(2) will be 
returned to you.
    (e) Notwithstanding any of the provisions in this section, you may 
be subject to civil, criminal or administrative sanctions if you 
certify to an incorrect SSN or EIN or any other information under this 
policy.
    (f) If any of the information regarding persons with a substantial 
beneficial interest in you, changes:
    (1) After the sales closing date for the previous crop year, you 
must revise your application by the sales closing date for the current 
crop year to reflect the correct information; or
    (2) Less than 30 days before the sales closing date for the current 
crop year, you must revise your application by the sales closing date 
for the next crop year;
    (3) And you fail to provide the required revisions, the provisions 
in section 2(c)(2) will apply; and
    (g) If you are, or a person with a substantial beneficial interest 
in you is, not eligible to obtain an SSN or EIN, whichever is required, 
you must request an assigned number for the purposes of this policy 
from us:
    (1) A number will be provided only if you can demonstrate you are, 
or a person with a substantial beneficial interest in you is, eligible 
to receive Federal benefits;
    (2) If a number cannot be provided for you in accordance with 
section (2)(g)(1), your application will not be accepted; or

[[Page 38514]]

    (3) If a number cannot be provided for any person with a 
substantial beneficial interest in you in accordance with section 
2(g)(1), the amount of coverage for all crops on the application will 
be reduced proportionately by the percentage interest of such person in 
you.
    (h) After acceptance of the application, you may not cancel this 
policy for the initial crop year unless you choose to insure the entire 
crop under another Federally reinsured plan of insurance with the same 
insurance provider on or before the sales closing date. After the first 
year, the policy will continue in force for each succeeding crop year 
unless canceled, voided or terminated as provided in this section.
    (i) Either you or we may cancel this policy after the initial crop 
year by providing written notice to the other on or before the 
cancellation date shown in the Crop Provisions.
    (j) Any amount due to us for any policy authorized under the Act 
will be offset from any indemnity due you for this or any other crop 
insured with us under the authority of the Act.
    (1) Even if your claim has not yet been paid, you must still pay 
the premium and administrative fee on or before the termination date 
for you to remain eligible for insurance.
    (2) If we offset any amount due us from an indemnity owed to you, 
the date of payment for the purpose of determining whether you have a 
delinquent debt will be the date FCIC publishes the final county yield 
for the applicable crop year.
    (k) A delinquent debt for any policy will make you ineligible to 
obtain crop insurance authorized under the Act for any subsequent crop 
year and result in termination of all policies in accordance with 
section 2(k)(2).
    (1) With respect to ineligibility:
    (i) Ineligibility for crop insurance will be effective on:
    (A) The date that a policy was terminated in accordance with 
section 2(k)(2) for the crop for which you failed to pay premium, an 
administrative fee, or any related interest owed, as applicable;
    (B) The payment due date contained in any notification of 
indebtedness for overpaid indemnity and any other amounts due, 
including but not limited to, premium billed with a due date after the 
termination date for the crop year in which premium is earned, if you 
fail to pay the amount owed, including any related interest owed, as 
applicable, by such due date;
    (C) The termination date for the crop year prior to the crop year 
in which a scheduled payment is due under a written payment agreement 
if you fail to pay the amount owed by any payment date in any agreement 
to pay the debt; or
    (D) The termination date the policy was or would have been 
terminated under section 2(k)(2)(i)(A), (B) or (C) if your bankruptcy 
petition is dismissed before discharge.
    (ii) If you are ineligible and a policy has been terminated in 
accordance with section 2(k)(2), you will not receive any indemnity, 
and such ineligibility and termination of the policy may affect your 
eligibility for benefits under other USDA programs. Any indemnity that 
may be owed for the policy before it has been terminated will remain 
owed to you, but may be offset in accordance with section 2(j), unless 
your policy was terminated in accordance with sections 2(k)(2)(i)(A), 
(B), (D), or (E).
    (2) With respect to termination:
    (i) Termination will be effective on:
    (A) For a policy with unpaid administrative fees or premiums, the 
termination date immediately subsequent to the premium billing date for 
the crop year (For policies for which the sales closing date is prior 
to the termination date, such policies will terminate for the current 
crop year even if insurance attached prior to the termination date. 
Such termination will be considered effective as of the sales closing 
date and no insurance will be considered to have attached for the crop 
year and no indemnity will be owed);
    (B) For a policy with other amounts due, including but not limited 
to, premium billed with a due date after the termination date for the 
crop year in which premium is earned, the termination date immediately 
following the date you have a delinquent debt (For policies for which 
the sales closing date is prior to the termination date, such policies 
will terminate for the current crop year even if insurance attached 
prior to the termination date. Such termination will be considered 
effective as of the sales closing date and no insurance will be 
considered to have attached for the crop year and no indemnity will be 
owed);
    (C) For all other policies that are issued by us under the 
authority of the Act, the termination date that coincides with the 
termination date for the policy with the delinquent debt, or if there 
is no coincidental termination date, the termination date immediately 
following the date you become ineligible;
    (D) For execution of a written payment agreement and failure to 
make any scheduled payment, the termination date for the crop year 
prior to the crop year in which you failed to make the scheduled 
payment (for this purpose only, the crop year will start the day after 
the termination date and end on the next termination date, e.g., if the 
termination date is November 30 and you fail to make a payment on 
November 15, 2011, your policy will terminate on November 30, 2010, for 
the 2011 crop year); or
    (E) For dismissal of a bankruptcy petition before discharge, the 
termination date the policy was or would have been terminated under 
section 2(k)(2)(i)(A), (B), (C).
    (ii) For all policies terminated under section 2(k)(2)(i)(A), (B), 
(D), or (E), any indemnities paid subsequent to the termination date 
must be repaid.
    (iii) Once the policy is terminated, it cannot be reinstated for 
the current crop year unless the termination was in error. Failure to 
timely pay because of illness, bad weather, or other such extenuating 
circumstances is not grounds for reinstatement in the current crop 
year.
    (3) To regain eligibility, you must:
    (i) Repay the delinquent debt in full;
    (ii) Execute a written payment agreement and make payments in 
accordance with the agreement (we will not enter into a written payment 
agreement with you if you have previously failed to make a scheduled 
payment under the terms of any other payment agreement with us or any 
other insurance provider); or
    (iii) File a petition to have your debts discharged in bankruptcy 
(Dismissal of the bankruptcy petition before discharge will terminate 
all policies in effect retroactive to the date your policy would have 
been terminated in accordance with section 2(k)(2)(i).)
    (4) If you are determined to be ineligible under section 2(k), 
persons with a substantial beneficial interest in you may also be 
ineligible until you become eligible again.
    (l) In cases where there has been a death, disappearance, 
judicially declared incompetence, or dissolution of any insured person:
    (1) If any married insured dies, disappears, or is judicially 
declared incompetent, the insured on the policy will automatically 
convert to the name of the spouse if:
    (i) The spouse was included on the policy as having a substantial 
beneficial interest in the insured; and
    (ii) The spouse has a share of the crop.
    (2) The provisions in section 2(l)(3) will only be applicable if:
    (i) Any partner, member, shareholder, etc., of an insured entity 
dies, disappears, or is judicially declared incompetent, and such event 
automatically dissolves the entity; or
    (ii) An individual whose estate is left to a beneficiary other than 
a spouse or

[[Page 38515]]

left to the spouse and the criteria in section 2(l)(1) are not met, 
dies, disappears, or is judicially declared incompetent.
    (3) If the death, disappearance, or judicially declared 
incompetence occurred:
    (i) More than 30 days before the cancellation date, the policy is 
automatically canceled as of the cancellation date and a new 
application must be submitted; or
    (ii) Thirty days or less before the cancellation date, or on after 
the cancellation date, the policy will continue in effect through the 
crop year immediately following the cancellation date and be 
automatically canceled as of the cancellation date immediately 
following the end of the insurance period for the crop year, unless 
canceled by the cancellation date prior to the start of the insurance 
period:
    (A) A new application for insurance must be submitted on or before 
the sales closing date for coverage for the subsequent crop year; and
    (B) Any indemnity will be paid to the person or persons determined 
to be beneficially entitled to the payment provided such person or 
persons comply with all policy provisions and timely pays the premium.
    (4) If any insured entity is dissolved for reasons other than 
death, disappearance, or judicially declared incompetence:
    (i) Before the cancellation date, the policy is automatically 
canceled as of the cancellation date and a new application must be 
submitted; or
    (ii) On or after the cancellation date, the policy will continue in 
effect through the crop year immediately following the cancellation 
date and be automatically canceled as of the cancellation date 
immediately following the end of the insurance period for the crop 
year, unless canceled by the cancellation date prior to the start of 
the insurance period.
    (A) A new application for insurance must be submitted on or before 
the sales closing date for coverage for the subsequent crop year; and
    (B) Any indemnity will be paid to the person or persons determined 
to be beneficially entitled to the payment provided such person or 
persons comply with all policy provisions and timely pays the premium.
    (5) If section 2(k)(2) or (4) applies, a remaining member of the 
insured person or the beneficiary is required to report to us the 
death, disappearance, judicial incompetence, or other event that causes 
dissolution of the entity not later than the next cancellation date, 
except if section 2(k)(3)(ii) applies, notice must be provided by the 
cancellation date for the next crop year.
    (m) We may cancel your policy if no premium is earned for 3 
consecutive years.
    (n) The cancellation and termination dates are contained in the 
Crop Provisions.
    (o) Any person may sign any document relative to crop insurance 
coverage on behalf of any other person covered by such a policy, 
provided that the person has a properly executed power of attorney or 
such other legally sufficient document authorizing such person to sign. 
You are still responsible for the accuracy of all information provided 
on your behalf and may be subject to the consequences in section 8(g), 
and any other consequences, including administrative, criminal or civil 
sanctions, if any information has been misreported.
    (p) If voidance, cancellation or termination of insurance coverage 
occurs for any reason, including but not limited to indebtedness, 
suspension, debarment, disqualification, cancellation by you or us or 
your policy is voided due to a conviction of the controlled substance 
provisions of the Food Security Act of 1985 or Title 21, a new 
application must be filed for the crop.
    (1) Insurance coverage will not be provided if you are ineligible 
under the contract or under any Federal statute or regulation.
    (2) Since applications for crop insurance cannot be accepted after 
the sales closing date, if you make any payment, or you otherwise 
become eligible, after the sales closing date, you cannot apply for 
insurance until the next crop year. For example, for the 2012 crop 
year, if crop A, with a termination date of October 31, 2012, and crop 
B, with a termination date of March 15, 2013, are insured and you do 
not pay the premium for crop A by the termination date, you are 
ineligible for crop insurance as of October 31, 2012, and crop A's 
policy is terminated as of that date. Crop B's policy does not 
terminate until March 15, 2013, and an indemnity for the 2012 crop year 
may still be owed. You will not be eligible to apply for crop insurance 
for any crop until after the amounts owed are paid in full or you file 
a petition to discharge the debt in bankruptcy.
3. Contract Changes
    (a) We may change the terms and conditions of this policy from year 
to year.
    (b) Any changes in policy provisions, the CEPP, amounts of 
insurance, expected county yields, premium rates, and program dates can 
be viewed on RMA's Web site not later than the contract change date 
contained in the Crop Provisions. We may only revise this information 
after the contract change date to correct obvious errors (e.g., the 
expected county revenue for a county was announced at $2,500 per acre 
instead of $250 per acre).
    (c) After the contract change date, all changes specified in 
section 3(b) will also be available upon request from your crop 
insurance agent.
    (d) Not later than 30 days prior to the cancellation date for the 
insured crop you will be provided, in accordance with section 20, a 
copy of the changes to the Basic Provisions, Crop Provisions, CEPP, if 
applicable, and Special Provisions.
    (e) Acceptance of all the changes will be conclusively presumed in 
the absence of notice from you to change or cancel your insurance 
coverage.
4. Insured Crop
    (a) The insured crop will be that shown on your accepted 
application and as specified in the Crop Provisions or Special 
Provisions, and must be grown on insurable acreage.
    (b) A crop which will NOT be insured will include, but will not be 
limited to, any crop:
    (1) That is not grown on planted acreage;
    (2) That is a type not generally recognized for the area;
    (3) For which the information necessary for insurance (projected 
price, expected county yield, premium rate, etc.) is not included in 
the actuarial documents;
    (4) That is a volunteer crop;
    (5) Planted following the same crop on the same acreage and the 
first planting of the crop has been harvested in the same crop year 
unless specifically permitted by the Crop Provisions or the Special 
Provisions (For example, the second planting of grain sorghum would not 
be insurable if grain sorghum had already been planted and harvested on 
the same acreage during the crop year);
    (6) That is planted for experimental purposes; or
    (7) That is used solely for wildlife protection or management. If 
the lease states that specific acreage must remain unharvested, only 
that acreage is uninsurable. If the lease specifies that a percentage 
of the crop must be left unharvested, your share will be reduced by 
such percentage.
    (c) Although certain policy documents may state that a specific 
crop, type, or practice is not insurable, it does not mean all other 
crops, types, or practices are insurable. To be

[[Page 38516]]

insurable, the use of such crop, type, or practice must be a good 
faming practice, have been widely used in the county, and meet all the 
conditions in the Basic Provisions, the Crop Provisions, Special 
Provisions, and the actuarial documents.
5. Insurable Acreage
    (a) Except as provided in section 5(c), the insurable acreage is 
all of the acreage of the insured crop for which a premium rate is 
provided by the actuarial documents, in which you have a share, and 
which is planted in the county listed on your accepted application. The 
dollar amount of insurance per acre, amount of premium, and indemnity 
will be calculated separately for each crop, type, and practice shown 
on the actuarial documents.
    (1) The acreage must have been planted and harvested (grazing is 
not considered harvested for the purposes of this section) or insured 
(excluding pasture, rangeland, and forage, vegetation and rainfall 
insurance or any other specific policy listed in the Special 
Provisions) in at least one of the three previous crop years unless:
    (i) Such acreage was not planted:
    (A) In at least two of the three previous crop years to comply with 
any other USDA program;
    (B) Due to the crop rotation, the acreage would not have been 
planted in the previous three years (e.g., a crop rotation of corn, 
soybeans, and alfalfa; and the alfalfa remained for four years before 
the acreage was planted to corn again); or
    (C) Because a perennial crop was on the acreage in at least two of 
the previous three crop years;
    (ii) Such acreage constitutes five percent or less of the insured 
planted acreage of the crop, type and practice as shown on the 
actuarial documents in the county;
    (iii) Such acreage was not planted or harvested because it was 
pasture or rangeland and the crop to be insured is also pasture or 
rangeland; or
    (iv) The Crop Provisions or Special Provisions specifically allow 
insurance for such acreage.
    (b) Only the acreage planted to the insured crop on or before the 
final planting date, as shown in the actuarial documents, and reported 
by the acreage reporting date and physically located in the county 
shown on your accepted application will be insured.
    (c) We will not insure any acreage (and any uninsured acreage and 
production from uninsured acreage will not be included for the purposes 
of establishing the final county yield):
    (1) Where the crop was destroyed or put to another use during the 
crop year for the purpose of conforming with, or obtaining a payment 
under, any other program administered by the USDA;
    (2) Where we determine you have failed to follow good farming 
practices for the insured crop;
    (3) Where the conditions under which the crop is planted are not 
generally recognized for the area (for example, where agricultural 
experts determine that planting a non-irrigated corn crop after a 
failed small grain crop on the same acreage in the same crop year is 
not appropriate for the area);
    (4) Of a second crop, if you elect not to insure such acreage when 
an indemnity for a first insured crop may be subject to reduction in 
accordance with the provisions of section 13 and you intend to collect 
an indemnity payment that is equal to 100 percent of the insurable loss 
for the first insured crop acreage. This election must be made for all 
first insured crop acreage that may be subject to an indemnity 
reduction if the first insured crop is insured under this policy, or on 
a first insured crop unit basis if the first insured crop is not 
insured under this policy (e.g., if the first insured crop under this 
policy consists of 40 acres, or the first insured crop unit insured 
under another policy contains 40 planted acres, then no second crop can 
be insured on any of the 40 acres). In this case:
    (i) If the first insured crop is insured under ARPI, you must 
provide written notice to us of your election not to insure acreage of 
a second crop by the acreage reporting date for the second crop if it 
is insured under ARPI, or before planting the second crop if it is 
insured under any other policy;
    (ii) If the first insured crop is not insured under ARPI, at the 
time the first insured crop acreage is released by us or another 
insurance provider who insures the first insured crop (if no acreage in 
the first insured crop unit is released, this election must be made by 
the earlier of acreage reporting date for the second crop or when you 
sign the claim for the first insured crop);
    (iii) If you fail to provide a notice as specified in section 
5(c)(5)(i) or 5(c)(5)(ii), the second crop acreage will be insured in 
accordance with applicable policy provisions and you must repay any 
overpaid indemnity for the first insured crop;
    (iv) In the event a second crop is planted and insured with a 
different insurance provider, or planted and insured by a different 
person, you must provide written notice to each insurance provider that 
a second crop was planted on acreage on which you had a first insured 
crop; and
    (v) You must report the crop acreage that will not be insured on 
the applicable acreage report; and
    (5) Of a crop planted following a second crop or following an 
insured crop that is prevented from being planted after a first insured 
crop, unless it is a practice that is generally recognized by 
agricultural experts or organic agricultural experts for the area to 
plant three or more crops for harvest on the same acreage in the same 
crop year, and additional coverage insurance provided under the 
authority of the Act is offered for the third or subsequent crop in the 
same crop year. Insurance will only be provided for a third or 
subsequent crop as follows:
    (i) You must provide records acceptable to us that show:
    (A) You have produced and harvested the insured crop following two 
other crops harvested on the same acreage in the same crop year in at 
least two of the last four years in which you produced the insured 
crop; or
    (B) The applicable acreage has had three or more crops produced and 
harvested on it in the same crop year in at least two of the last four 
years in which the insured crop was grown on the acreage; and
    (ii) The amount of insurable acreage will not exceed 100 percent of 
the greatest number of acres for which you provide the records required 
in section 5(c)(5)(i).
    (d) If the Governor of a State designated within the Prairie 
Pothole National Priority Area elects to make section 508(o) of the Act 
effective for the State, any native sod acreage greater than five acres 
located in a county contained within the Prairie Pothole National 
Priority Area that has been tilled after May 22, 2008, is not insurable 
for the first five crop years of planting following the date the native 
sod acreage is tilled.
    (1) If the Governor makes this election after you have received an 
indemnity or other payment for native sod acreage, you will be required 
to repay the amount received and any premium for such acreage will be 
refunded to you.
    (2) If we determine you have tilled less than five acres of native 
sod a year for more than one crop year, we will add all the native sod 
acreage tilled after May 22, 2008, and all such acreage will be 
ineligible for insurance for the first five crop years of planting 
following the date the cumulative native sod acreage tilled exceeds 
five acres.
    6. Coverage, Coverage Levels, Protection Factor, and Policy 
Protection

[[Page 38517]]

    (a) For all acreage of the insured crop in the county, you must 
select the same plan of insurance (e.g., all Area Revenue Protection, 
all Area Revenue Protection with the Harvest Price Exclusion, or all 
Area Yield Protection), if such plans are available on the actuarial 
documents.
    (b) You must choose a protection factor:
    (1) Unless otherwise specified in the Special Provisions from a 
range of 80 percent to 120 percent;
    (2) As a whole percentage from amounts specified; and
    (3) For each crop, type, and practice (you may choose a different 
protection factor for each crop, type, and practice).
    (c) You may select any coverage level shown on the actuarial 
documents for each crop, type, and practice.
    (1) For Area Revenue Protection and Area Revenue Protection with 
the Harvest Price Exclusion:
    (i) CAT level of coverage is not available; and
    (ii) With respect to additional level of coverage, you may select 
any coverage level specified in the actuarial documents for each crop, 
type, and practice. For example: You may choose a 75 percent coverage 
level for one crop, type, and practice (such as corn irrigated 
practice) and a 90 percent coverage level for another crop, type, and 
practice (corn non-irrigated practice).
    (2) For Area Yield Protection:
    (i) CAT level of coverage is available, and you may select the CAT 
level of coverage for any crop, type, and practice;
    (ii) With respect to additional level of coverage, you may select 
any coverage level specified in the actuarial documents for each crop, 
type, and practice. For example: You may choose a 75 percent coverage 
level for one crop, type, and practice (corn irrigated practice) and a 
90 percent coverage level for another crop, type, and practice (corn 
non-irrigated practice); and
    (iii) You may have CAT level of coverage on one type and practice 
shown on the actuarial documents for the crop, and additional coverage 
on another type and practice for the same crop. You may also have 
different additional levels of coverage by type and practice.
    (d) You may change the plan of insurance, protection factor, or 
coverage level, for the following crop year by giving written notice to 
us not later than the sales closing date for the insured crop.
    (e) Since this is a continuous policy, if you do not select a new 
plan of insurance, protection factor, and coverage level on or before 
the sales closing date, we will assign the same plan of insurance, 
protection factor, and coverage level as the previous year.
    (f) Policy protection for ARPI plans of insurance is calculated as 
follows:
    (1) Multiply the dollar amount of insurance per acre for each crop, 
type, and practice by the number of acres insured for such crop, type 
and practice; and
    (2) Multiply the result of paragraph (1) by your share.
    (g) If the projected price cannot be calculated for the current 
crop year under the provisions contained in the CEPP and you previously 
chose Area Revenue Protection or Area Revenue Protection with the 
Harvest Price Exclusion:
    (1) Area Revenue Protection and Area Revenue Protection with the 
Harvest Price Exclusion will not be provided and you will automatically 
be covered under the Area Yield Protection plan of insurance for the 
current crop year unless you cancel your coverage by the cancellation 
date or change your plan of insurance by the sales closing date;
    (2) Notice of availability of the projected price will be provided 
on RMA's Web site by the date specified in the applicable projected 
price definition contained in the CEPP;
    (3) The projected price will be determined by FCIC and will be 
released by the date specified in the applicable projected price 
definition contained in the CEPP; and
    (4) Your coverage will automatically revert back to Area Revenue 
Protection or Area Revenue Protection with the Harvest Price Exclusion, 
whichever is applicable, for the next crop year that revenue protection 
is available unless you cancel your coverage by the cancellation date 
or change your plan of insurance by the sales closing date.
7. Annual Premium and Administrative Fees
    (a) The administrative fee:
    (1) For CAT level of coverage will be an amount specified in the 
CAT Endorsement or the Special Provisions, as applicable;
    (2) For additional levels of coverage is $30, or an amount 
specified in the Special Provisions, as applicable;
    (3) Is payable to us on the premium billing date for the crop;
    (4) Must be paid no later than the time premium is due or the 
amount will be considered a delinquent debt;
    (5) If you select coverage in accordance with section 6(c)(2)(iii):
    (i) Will be charged for both CAT and additional level of coverage 
if a producer elects both for the crop in the county; but
    (ii) Will not be more than one additional and one CAT 
administrative fee no matter how many different coverage levels you 
choose for different type and practice combinations you insure for the 
crop in the county;
    (6) Will be waived if you request it and:
    (i) You qualify as a limited resource farmer; or
    (ii) You were insured prior to the 2005 crop year or for the 2005 
crop year and your administrative fee was waived for one or more of 
those crop years because you qualified as a limited resource farmer 
under a policy definition previously in effect, and you remain 
qualified as a limited resource farmer under the definition that was in 
effect at the time the administrative fee was waived;
    (7) Will not be required if you file a bona fide zero acreage 
report on or before the acreage reporting date for the crop. If you 
falsely file a zero acreage report you may be subject to criminal, 
civil and administrative sanctions; and
    (8) If not paid when due, may make you ineligible for crop 
insurance and certain other USDA benefits.
    (b) The premium is based on the policy protection calculated in 
section 6(f).
    (c) The information needed to determine the premium rate and any 
premium adjustment percentages that may apply are contained in the 
actuarial documents.
    (d) To calculate the premium and subsidy amounts for ARPI plans of 
insurance:
    (1) Multiply your policy protection from section 6(f) by the 
applicable premium rate and any premium adjustment percentages that may 
apply;
    (2) Multiply the result of paragraph (1) by the applicable subsidy 
factor (This is the amount of premium FCIC will pay);
    (3) Subtract the result of paragraph (2) from the result of 
paragraph (1) to calculate the amount of premium you will pay.
    (e) The amount of premium calculated in accordance with section 
7(d)(3) is earned and payable at the time coverage begins. You will be 
billed for such premium and applicable administrative fees not earlier 
than the premium billing date specified in the actuarial documents.
    (f) If the amount of premium calculated in accordance with section 
7(d)(3) and administrative fees you are required to pay for any acreage 
exceeds the amount of policy protection for the acreage, coverage for 
those acres will not be provided (No premium or administrative fee will 
be due and no

[[Page 38518]]

indemnity will be paid for such acreage).
    (g) Premium or administrative fees owed by you will be offset from 
an indemnity due you in accordance with section 2(j).
8. Report of Acreage and Production
    (a) An annual acreage report must be submitted to us on our form 
for each insured crop (separate lines for each type and practice) in 
the county on or before the acreage reporting date contained in the 
actuarial documents.
    (b) If you do not have a share in an insured crop in the county for 
the crop year, you must submit an acreage report, on or before the 
acreage reporting date, so indicating.
    (c) Your acreage report must include the following information, if 
applicable:
    (1) The amount of acreage of the crop in the county (insurable and 
not insurable) in which you have a share, the last date any acreage of 
the insured crop was planted, and the number of acres planted by such 
date (Acreage initially planted after the final planting date must be 
reported as uninsurable);
    (2) Your share at the time coverage begins;
    (3) The practice;
    (4) The type; and
    (5) The land identifier for the crop acreage (e.g., legal 
description, FSA farm number or common land unit number if provided to 
you by FSA, etc.) as required on our form.
    (d) We will not insure any acreage of the insured crop planted 
after the final planting date.
    (e) Regarding the ability to revise an acreage report you have 
submitted to us:
    (1) You cannot revise any information pertaining to the planted 
acreage after the acreage reporting date without our consent;
    (2) Consent may only be provided if the information on the acreage 
report is clearly transposed, or you provide adequate evidence that we 
have or someone from USDA has committed an error regarding the 
information on your acreage report; and
    (3) The provisions in section 8(e)(1) and (2) also pertain to land 
acquired after the acreage reporting date, and we may choose to insure 
or not insure the acreage, provided the crop meets the requirements in 
section 5 and section 8. This requirement does not apply to any acreage 
acquired through a transfer of coverage in accordance with section 17.
    (f) Except as provided in section 8(h), your premium and indemnity, 
if any, will be based on your insured acreage and share on your acreage 
report or section 8(e), if applicable.
    (g) We may elect to determine all premiums and indemnities based on 
the information you submit on the acreage report or upon the factual 
circumstances we determine to have existed, subject to the provisions 
contained in section 8.
    (h) You must provide all required reports and you are responsible 
for the accuracy of all information contained in those reports. You 
should verify the information on all such reports prior to submitting 
them to us.
    (1) Except as provided in section 8(h)(2), if you submit 
information on any report that is different than what is determined to 
be correct and the information reported on the acreage report results 
in:
    (i) A lower liability than the actual, correct liability 
determined, the policy protection will be reduced to an amount 
consistent with the information reported on the acreage report; or
    (ii) A higher liability than the actual, correct liability 
determined, the information contained in the acreage report will be 
revised to be consistent with the correct information.
    (2) If your share is misreported and the share is:
    (i) Under-reported at the time of the acreage report, any claim 
will be determined using the share you reported; or
    (ii) Over-reported at the time of the acreage report, any claim 
will be determined using the share we determine to be correct.
    (i) If we discover you have incorrectly reported any information on 
the acreage report for any crop year, you may be required to provide 
documentation in subsequent crop years substantiating your report of 
acreage for those crop years, including, but not limited to, an acreage 
measurement service at your own expense. If the correction of any 
misreported information would affect an indemnity that was paid in a 
prior crop year, such claim will be adjusted and you will be required 
to repay any overpaid amounts.
    (j) You may request an acreage measurement from FSA or a business 
that provides such measurement service prior to the acreage reporting 
date, submit documentation of such request and an acreage report with 
estimated acreage by the acreage reporting date, and if the acreage 
measurement shows the estimated acreage was incorrect, we will revise 
your acreage report to reflect the correct acreage:
    (1) If an acreage measurement is only requested for a portion of 
the insured crop, type, and practice, you must separately designate the 
acreage for which an acreage measurement has been requested;
    (2) If an acreage measurement is not provided to us by the time the 
final county revenue or final county yield, as applicable, is 
calculated, we may:
    (i) Elect to measure the acreage, and finalize your claim in 
accordance with applicable policy provisions;
    (ii) Defer finalization of the claim until the measurement is 
completed with the understanding that if you fail to provide the 
measurement prior to the termination date, your claim will not be paid; 
or
    (iii) Finalize the claim in accordance with applicable policy 
provisions after you provide the acreage measurement to us; and
    (3) Premium will still be due in accordance with sections 2(k) and 
7 (If the acreage is not measured as specified in section 8(j) and the 
acreage measurement is not provided to us at least 15 days prior to the 
premium billing date, your premium will be based on the estimated 
acreage and will be revised, if necessary, when the acreage measurement 
is provided);
    (4) If the acreage measurement is not provided by the termination 
date, you will be precluded from providing any estimated acreage for 
all subsequent crop years;
    (5) If there is an irreconcilable difference between:
    (i) The acreage measured by FSA or a measuring service and our on-
farm measurement, our on-farm measurement will be used; or
    (ii) The acreage measured by a measuring service, other than our 
on-farm measurement, and FSA, the FSA measurement will be used; and
    (6) If the acreage report has been revised in accordance with 
sections 8(g) and 8(j), the information on the initial acreage report 
will not be considered misreported for the purposes of section 8(h).
    (k) If you do not submit an acreage report by the acreage reporting 
date, or if you fail to report all acreage, we may elect to determine 
the insurable acreage, by crop, type, practice, and share, or to deny 
liability on such acreage. If we deny liability for the unreported 
acreage, no premium will be due on such acreage and no indemnity will 
be paid.
    (l) An annual production report must be submitted, unless otherwise 
specified in the Special Provisions, to us on our form for each insured 
crop (separate lines for each type and practice) in the county by the 
production reporting date specified in the actuarial documents.
    (m) Unless otherwise authorized by FCIC, if you do not submit a 
production report to us by the production reporting date specified in 
the actuarial documents, your protection factor for your policy in the 
following crop year

[[Page 38519]]

will be limited to the lowest protection factor available.
    (n) You must certify to the accuracy of the information on your 
production report and if you fail to accurately report your production, 
you will be subject to the provisions in 8(m), unless the information 
is corrected:
    (1) On or before the production reporting date; or
    (2) Because the incorrect information was the result of our error 
or the error of someone from USDA.
    (o) If you do not have records to support the information on your 
production report, you will be subject to the provisions in 8(m).
    (p) At any time we discover you have misreported any material 
information on your production report, you will be subject to the 
provisions in 8(m).
    (q) If you do not submit a production report or you misreported 
your production report and you switch to another plan of insurance in 
the following crop year, you will be subject to having a yield assigned 
in accordance with FCIC procedures.
    (r) Errors in reporting acreage, share, and other information 
required in this section, may be corrected by us at the time we become 
aware of such errors. However, the provisions regarding incorrect 
information in this section will apply.
9. Share Insured
    (a) Insurance will attach:
    (1) Only if the person completing the application has a share in 
the insured crop; and
    (2) Only to that person's share, except that insurance may attach 
to another person's share of the insured crop if the other person has a 
share of the crop and:
    (i) The application clearly states the insurance is requested for a 
person other than an individual (e.g., a partnership or a joint 
venture); or
    (ii) The application clearly states you as a landlord will insure 
your tenant's share, or you as a tenant will insure your landlord's 
share. If you as a landlord will insure your tenant's share, or you as 
a tenant will insure your landlord's share, you must provide evidence 
of the other party's approval (lease, power of attorney, etc.) and such 
evidence will be retained by us:
    (A) You also must clearly set forth the percentage shares of each 
person on the acreage report; and
    (B) For each landlord or tenant, you must report the landlord's or 
tenant's SSN, EIN, or other identification number we assigned for the 
purposes of this policy, as applicable.
    (b) With respect to your share:
    (1) We will consider included in your share under your policy, any 
acreage or interest reported by or for:
    (i) Your spouse, unless such spouse can prove he/she has a separate 
farming operation, which includes, but is not limited to, separate land 
(transfers of acreage from one spouse to another is not considered 
separate land), separate capital, separate inputs, separate accounting, 
and separate maintenance of proceeds; or
    (ii) Your child who resides in your household or any other member 
of your household, unless such child or other member of the household 
can demonstrate such person has a separate share in the crop (Children 
who do not reside in your household are not included in your share); 
and
    (2) If it is determined that the spouse, child or other member of 
the household has a separate policy but does not have a separate 
farming operation or share of the crop, as applicable:
    (i) The policy for the spouse or child or other member of the 
household will be void and the policy remaining in effect will be 
determined in accordance with section 18(c)(1) and (2);
    (ii) The acreage or share reported under the policy that is voided 
will be included under the remaining policy; and
    (iii) No premium will be due and no indemnity will be paid for the 
voided policy.
    (c) Acreage rented for a percentage of the crop, or a lease 
containing provisions for both a minimum payment (such as a specified 
amount of cash, bushels, pounds, etc.) and a crop share will be 
considered a crop share lease.
    (d) Acreage rented for cash, or a lease containing provisions for 
either a minimum payment or a crop share (such as a 50/50 share or 
$100.00 per acre, whichever is greater) will be considered a cash 
lease.
10. Insurance Period
    Unless specified otherwise in the Crop Provisions, coverage begins 
at the later of:
    (a) The date we accept your application (For the purposes of this 
paragraph, the date of acceptance is the date that you submit a 
properly executed application in accordance with section 2); or
    (b) The date the insured crop is planted.
11. Causes of Loss
    (a) ARPI provides protection against loss of revenue or against 
loss of yield in a county resulting from natural causes of loss that 
cause the final county yield or the final county revenue to be less 
than the trigger yield or the trigger revenue.
    (b) Failure to follow good farming practices, or planting or 
producing a crop using a practice that has not been widely recognized 
as used to establish the expected county yield, is not an insurable 
cause of loss under ARPI.
12. Triggers, Final Policy Protection, Payment Factor, and Indemnity 
Calculations
    (a) Individual farm revenues and yields are not considered when 
calculating losses under ARPI. It is possible that your individual farm 
may experience reduced revenue or reduced yield and you do not receive 
an indemnity under ARPI.
    (b) To calculate the trigger revenue:
    (1) For Area Revenue Protection, multiply the expected county yield 
by the greater of the projected or harvest price and by the coverage 
level.
    (2) For Area Revenue Protection with the Harvest Price Exclusion, 
multiply the expected county yield by the projected price and by the 
coverage level.
    (c) To calculate the Trigger Yield for Area Yield Protection, 
multiply the expected county yield by the coverage level.
    (d) If the harvest price cannot be calculated for the current crop 
year under the provisions contained in the CEPP:
    (1) Revenue protection will continue to be available; and
    (2) The harvest price will be determined and announced by FCIC.
    (e) The final policy protection for:
    (1) Area Revenue Protection is calculated by:
    (i) Multiplying the expected county yield by the greater of the 
harvest price or the projected price;
    (ii) Multiplying the result of subparagraph (i) by your protection 
factor; and
    (iii) Multiplying the result of subparagraph (ii) by your acres and 
by your share.
    (2) Area Revenue Protection with the Harvest Price Exclusion and 
Area Yield Protection are equal to the policy protection and are 
calculated by:
    (i) Multiplying the expected county yield by the projected price;
    (ii) Multiplying the result of subparagraph (i) by your protection 
factor; and
    (iii) Multiplying the result of subparagraph (ii) by your acres and 
by your share.
    (f) An indemnity is due for:
    (1) Area Revenue Protection and Area Revenue Protection with the 
Harvest Price Exclusion if the final county revenue is less than the 
trigger revenue.

[[Page 38520]]

    (2) Area Yield Protection if the final county yield is less than 
the trigger yield.
    (g) The payment factor is calculated for:
    (1) Area Revenue Protection by:
    (i) Subtracting the final county revenue from the trigger revenue 
to determine the amount of loss;
    (ii) Multiplying the expected county yield by the greater of the 
projected or harvest price and by the loss limit factor;
    (iii) Subtracting the result of subparagraph (ii) from the trigger 
revenue; and
    (iv) Dividing the result of subparagraph (i) by the result of 
subparagraph (iii) to obtain the payment factor.
    (2) Area Revenue Protection with the Harvest Price Exclusion by:
    (i) Subtracting the final county revenue from the trigger revenue 
to determine the amount of loss;
    (ii) Multiplying the expected county yield by the projected price 
and by the loss limit factor;
    (iii) Subtracting the result of subparagraph (ii) from the trigger 
revenue; and
    (iv) Dividing the result of subparagraph (i) by the result of 
subparagraph (iii) to obtain the payment factor.
    (3) Area Yield Protection by:
    (i) Subtracting the final county yield from the trigger yield to 
determine the amount of loss;
    (ii) Multiplying the expected county yield by the loss limit 
factor;
    (iii) Subtracting the result of subparagraph (ii) from the trigger 
yield; and
    (iv) Dividing the result of subparagraph (i) by the result of 
subparagraph (iii) to obtain the payment factor.
    (h) Indemnities for all three ARPI plans of insurance are 
calculated by multiplying the final policy protection by the payment 
factor.
    (i) Indemnities for all three ARPI plans of insurance are 
calculated following release of the final county yield and harvest 
price as specified in the Crop Provisions.
13. Indemnity and Premium Limitations
    (a) With respect to acreage where you are due an indemnity for your 
first insured crop in the crop year, except in the case of double 
cropping described in section 13(c):
    (1) You may elect to not plant or to plant and not insure a second 
crop on the same acreage for harvest in the same crop year and collect 
an indemnity payment that is equal to 100 percent of the insurable loss 
for the first insured crop; or
    (2) You may elect to plant and insure a second crop on the same 
acreage for harvest in the same crop year (you will pay the full 
premium and if there is an insurable loss to the second crop, receive 
the full amount of indemnity that may be due for the second crop, 
regardless of whether there is a subsequent crop planted on the same 
acreage) and:
    (i) Collect an indemnity payment that is 35 percent of the 
insurable loss for the first insured crop;
    (ii) Be responsible for a premium that is 35 percent of the premium 
that you would otherwise owe for the first insured crop; and
    (iii) If the second crop does not suffer an insurable loss:
    (A) Collect an indemnity payment for the other 65 percent of 
insurable loss that was not previously paid under section 13(a)(2)(i); 
and
    (B) Be responsible for the remainder of the premium for the first 
insured crop that you did not pay under section 13(a)(2)(ii).
    (b) In lieu of the priority contained in the Agreement to Insure 
section, which states that the Crop Provisions have priority over the 
Basic Provisions, the reduction in the amount of indemnity and premium 
specified in section 13(a) of these Basic Provisions, as applicable, 
will apply to any premium owed or indemnity paid in accordance with the 
Crop Provisions, and any applicable endorsement. This will apply:
    (1) Even if another person plants the second crop on any acreage 
where the first insured crop was planted; or
    (2) If you fail to provide any records we require to determine 
whether an insurable loss occurred for the second crop.
    (c) You may receive a full indemnity for a first insured crop when 
a second crop is planted on the same acreage in the same crop year, 
regardless of whether or not the second crop is insured or sustains an 
insurable loss, if each of the following conditions are met:
    (1) It is a practice that is generally recognized by agricultural 
experts or organic agricultural experts for the area to plant two or 
more crops for harvest in the same crop year;
    (2) The second or more crops are customarily planted after the 
first insured crop for harvest on the same acreage in the same crop 
year in the area;
    (3) Additional coverage insurance offered under the authority of 
the Act is available in the county on the two or more crops that are 
double cropped; and
    (4) You provide records acceptable to us of acreage and production 
that show you have double cropped acreage in at least two of the last 
four crop years in which the first insured crop was planted, or that 
show the applicable acreage was double cropped in at least two of the 
last four crop years in which the first insured crop was grown on it.
    (d) The receipt of a full indemnity on both crops that are double 
cropped is limited to the number of acres for which you can demonstrate 
you have double cropped or that have been historically double cropped 
as specified in section 13(c).
    (1) If the records you provided are from acreage you double cropped 
in at least two of the last four crop years, you may apply your history 
of double cropping to any acreage of the insured crop in the county 
(e.g., if you have double cropped 100 acres of wheat and soybeans in 
the county and you acquire an additional 100 acres in the county, you 
can apply that history of double cropped acreage to any of the 200 
acres in the county as long as it does not exceed 100 acres); or
    (2) If the records you provided are from acreage that another 
producer double cropped in at least two of the last four crop years, 
you may only use the history of double cropping for the same physical 
acres from which double cropping records were provided (e.g., if a 
neighbor has double cropped 100 acres of wheat and soybeans in the 
county and you acquire your neighbor's 100 double cropped acres and an 
additional 100 acres in the county, you can only apply your neighbor's 
history of double cropped acreage to the same 100 acres that your 
neighbor double cropped).
    (e) If any Federal or State agency requires destruction of any 
insured crop or crop production, as applicable, because it contains 
levels of a substance, or has a condition, that is injurious to human 
or animal health in excess of the maximum amounts allowed by the Food 
and Drug Administration, other public health organizations of the 
United States or an agency of the applicable State, you must destroy 
the insured crop or crop production, as applicable, and certify that 
such insured crop or crop production has been destroyed prior to 
receiving an indemnity payment. Failure to destroy the insured crop or 
crop production, as applicable, will result in you having to repay any 
indemnity paid and you may be subject to administrative sanctions in 
accordance with section 515(h) of the Act and 7 CFR part 400, subpart 
R, and any applicable civil or criminal sanctions.

[[Page 38521]]

14. Organic Farming Practices
    (a) Insurance will be provided for a crop grown using an organic 
farming practice for only those acres of the crop that meet the 
requirements for an organic crop on the acreage reporting date.
    (b) If an organic type or practice is shown on the actuarial 
documents, the projected price, dollar amount of insurance, policy 
protection, premium rate, etc., for such organic crop, type and 
practice will be used unless otherwise specified in the actuarial 
documents. If an organic type or practice is not shown on the actuarial 
documents, the projected price, dollar amount of insurance, policy 
protection, premium rate, etc., for the non-organic crop, type and 
practice will be used.
    (c) If insurance is provided for an organic farming practice as 
specified in section 14(a) and (b), only the following acreage will be 
insured under such practice:
    (1) Certified organic acreage;
    (2) Transitional acreage being converted to certified organic 
acreage in accordance with an organic plan; and
    (3) Buffer zone acreage.
    (d) On the date you report your acreage, you must have:
    (1) For certified organic acreage, a written certification in 
effect from a certifying agent indicating the name of the entity 
certified, effective date of certification, certificate number, types 
of commodities certified, and name and address of the certifying agent 
(A certificate issued to a tenant may be used to qualify a landlord or 
other similar arrangement);
    (2) For transitional acreage, a certificate as described in section 
14(d)(1), or written documentation from a certifying agent indicating 
an organic plan is in effect for the acreage; and
    (3) Records from the certifying agent showing the specific location 
of each field of certified organic, transitional, buffer zone, and 
acreage not maintained under organic management.
15. Yields
    (a) The data source used for the county yields will be based on the 
best available data and will be specified in the actuarial documents.
    (b) Except as otherwise provided in this section, the data source 
used to establish the expected county yield will be the data source 
used to establish the final county yield.
    (c) If the data source used to establish the expected county yield 
is not able to provide credible data to establish the final county 
yield because the data is no longer available, credible, or reflect 
changes that may have occurred after the yield was established;
    (1) FCIC will determine the final county yield based on the most 
accurate data available from subsection (g), as determined by FCIC; or
    (2) To the extent that practices used during the crop year change 
from those upon which the expected county yield is based, the final 
county yield may be adjusted to reflect the yield that would have 
resulted but for the change in practice. For example, if the county is 
traditionally 90 percent irrigated and 10 percent non-irrigated, but 
this year the county is now 50 percent irrigated and 50 percent non-
irrigated, the final county yield will be adjusted to an amount as if 
the county had 90 percent irrigated acreage.
    (d) If the final county yield is established from a data source 
other than that used to establish the expected county yield, FCIC will 
provide notice of the data source and the reason for the change at the 
time the final county yield is published.
    (e) If yields are based on NASS data, the final county yield will 
be the most current NASS yield at the time FCIC determines the yield in 
accordance with the payment dates section of the applicable Crop 
Provisions.
    (f) The final county yield determined by FCIC is considered final 
for the purposes of establishing whether an indemnity is due and will 
not be revised for any reason.
    (g) Yields used under this insurance program for a crop, may be 
based on:
    (1) Data collected by NASS, if elected by FCIC, regardless of 
whether such data is published or unpublished; or
    (2) Crop insurance data, other USDA data, or other data sources, if 
elected by FCIC.
16. Assignment of Indemnity
    (a) You may assign your right to an indemnity for the crop year 
only to creditors or other persons to whom you have a financial debt or 
other pecuniary obligation. You may be required to provide proof of the 
debt or other pecuniary obligation before we will accept the assignment 
of indemnity.
    (b) All assignments must be on our form and must be provided to us. 
Each assignment form may contain more than one creditor or other person 
to whom you have a financial debt or other pecuniary obligation.
    (c) Unless you have provided us with a properly executed assignment 
of indemnity, we will not make any payment to a lienholder or other 
person to whom you have a financial debt or other pecuniary obligation 
even if you may have a lien or other assignment recorded elsewhere. 
Under no circumstances will we be liable:
    (1) To any lienholder or other person to whom you have a financial 
debt or other pecuniary obligation where you have failed to include 
such lienholder or person on a properly executed assignment of 
indemnity provided to us; or
    (2) To pay to all lienholders or other persons to whom you have a 
financial debt or other pecuniary obligation any amount greater than 
the total amount of indemnity owed under the policy.
    (d) If we have received the properly executed assignment of 
indemnity form:
    (1) Only one payment will be issued jointly in the names of all 
assignees and you; and
    (2) Any assignee will have the right to submit all notices and 
forms as required by the policy.
17. Transfer of Coverage and Right to Indemnity
    If you transfer any part of your share during the crop year, you 
may transfer your coverage rights, if the transferee is eligible for 
crop insurance.
    (a) We will not be liable for any more than the liability 
determined in accordance with your policy that existed before the 
transfer occurred.
    (b) The transfer of coverage rights must be on our form and will 
not be effective until approved by us in writing.
    (c) Both you and the transferee are jointly and severally liable 
for the payment of the premium and administrative fees.
    (d) The transferee has all rights and responsibilities under this 
policy consistent with the transferee's interest.
18. Other Insurance
    (a) Nothing in this section prevents you from obtaining other 
insurance not authorized under the Act. However, unless specifically 
required by policy provisions, you must not obtain any other crop 
insurance authorized under the Act on your share of the insured crop.
    (b) If you cannot demonstrate that you did not intend to have more 
than one policy in effect, you may be subject to the consequences 
authorized under this policy, the Act, or any other applicable statute.
    (c) If you can demonstrate that you did not intend to have more 
than one policy in effect (For example, an application to transfer your 
policy or written notification to an insurance provider that states you 
want to purchase, or transfer, insurance and you want any other 
policies for the crop canceled would demonstrate you did

[[Page 38522]]

not intend to have duplicate policies) and:
    (1) One is an additional coverage policy and the other is a CAT 
policy:
    (i) The additional coverage policy will apply if both policies are 
with the same insurance provider or, if not, both insurance providers 
agree; or
    (ii) The policy with the earliest date of application will be in 
force if both insurance providers do not agree; or
    (2) Both are additional coverage policies or both are CAT policies, 
the policy with the earliest date of application will be in force and 
the other policy will be void, unless both policies are with:
    (i) The same insurance provider and the insurance provider agrees 
otherwise; or
    (ii) Different insurance providers and both insurance providers 
agree otherwise.
19. Crops as Payment
    You must not abandon any crop to us. We will not accept any crop as 
compensation for payments due us.
20. Notices
    (a) All notices required to be given by you must be in writing and 
received by your crop insurance agent within the designated time unless 
otherwise provided by the notice requirement.
    (1) Notices required to be given immediately may be by telephone or 
in person and confirmed in writing.
    (2) The time the notice is provided will be determined by the time 
of our receipt of the written notice.
    (3) If the date by which you are required to submit a report or 
notice falls on Saturday, Sunday, or a Federal holiday, or if your 
agent's office is, for any reason, not open for business on the date 
you are required to submit such notice or report, such notice or report 
must be submitted on the next business day.
    (b) All policy provisions, notices, and communications required to 
be sent by us to you will be:
    (1) Provided by electronic means, unless:
    (i) We do not have the ability to transmit such information to you 
by electronic means; or
    (ii) You elect to receive a paper copy of such information;
    (2) Sent to the location specified in your records with your crop 
insurance agent; and
    (3) Will be conclusively presumed to have been received by you.
21. Access to Insured Crop and Records, and Record Retention
    (a) We, and any employee of USDA authorized to investigate or 
review any matter relating to crop insurance (authorized employee of 
USDA), have the right to examine the insured crop and all records 
related to the insured crop and this policy, and any mediation, 
arbitration or litigation involving the insured crop as often as 
reasonably required during the record retention period.
    (b) You must retain, and provide upon our request, or the request 
of any authorized employee of USDA, complete records pertaining to the 
planting, acres, share, replanting, inputs, production, harvesting and 
disposition of the insured crop for a period of three years after the 
end of the crop year or three years after the date of final payment of 
indemnity, whichever is later. This requirement also applies to all 
such records for acreage that is not insured.
    (c) We, or any authorized employee of USDA, may extend the record 
retention period beyond three years by notifying you of such extension 
in writing.
    (d) By signing the application for insurance authorized under the 
Act or by continuing insurance for which you have previously applied, 
you authorize us or USDA, or any person acting for us or USDA 
authorized to investigate or review any matter relating to crop 
insurance, to obtain records relating to the planting, acres, share, 
replanting, inputs, production, harvesting, and disposition of the 
insured crop from any person who may have custody of such records, 
including but not limited to, FSA offices, banks, warehouses, gins, 
cooperatives, marketing associations, and accountants. You must assist 
in obtaining all records we or any authorized employee of USDA request 
from third parties.
    (e) Failure to provide access to the insured crop or the farm, 
authorize access to the records maintained by third parties, or assist 
in obtaining all such records will result in a determination that no 
indemnity is due for the crop year in which such failure occurred.

[FCIC Policies]
22. Amounts Due Us
    (a) Any amount illegally or erroneously paid to you or that is owed 
to us but is delinquent may be recovered by us through offset by 
deducting it from any loan or payment due you under any Act of Congress 
or program administered by any United States Government Agency, or by 
other collection action.
    (b) Interest will accrue at the rate of 1.25 percent simple 
interest per calendar month, or any part thereof, on any unpaid premium 
amount or administrative fee due us. With respect to any premiums or 
administrative fees owed, interest will start to accrue on the first 
day of the month following the premium billing date specified in the 
actuarial documents, provided a minimum of 30 days have passed from the 
premium billing date.
    (c) For the purpose of any other amounts due us, such as repayment 
of indemnities found not to have been earned:
    (1) Interest will start on the date that notice is issued to you 
for the collection of the unearned amount;
    (2) Amounts found due under this paragraph will not be charged 
interest if payment is made within 30 days of issuance of the notice by 
us;
    (3) The amount will be considered delinquent if not paid within 30 
days of the date the notice is issued by us;
    (4) Penalties and interest will be charged in accordance with 31 
U.S.C. 3717 and 4 CFR part 102; and
    (5) The penalty for accounts more than 90 days delinquent is an 
additional 6 percent per annum.
    (d) Interest on any amount due us found to have been received by 
you because of fraud, misrepresentation or presentation by you of a 
false claim will start on the date you received the amount with the 
additional 6 percent penalty beginning on the 31st day after the notice 
of amount due is issued to you. This interest is in addition to any 
other amount found to be due under any other federal criminal or civil 
statute.
    (e) If we determine that it is necessary to contract with a 
collection agency, refer the debt to government collection centers, the 
Department of Treasury Offset Program, or to employ an attorney to 
assist in collection, you agree to pay all the expenses of collection.
    (f) All amounts paid will be applied first to expenses of 
collection if any, second to the reduction of any penalties which may 
have been assessed, then to reduction of accrued interest, and finally 
to reduction of the principal balance.

[Reinsured policies]
22. Amounts Due Us
    (a) Interest will accrue at the rate of 1.25 percent simple 
interest per calendar month, or any portion thereof, on any unpaid 
amount owed to us or on any unpaid administrative fees owed to FCIC.
    (1) For the purpose of premium amounts owed to us or administrative 
fees owed to FCIC, interest will start to accrue on the first day of 
the month following the premium billing date specified in the actuarial 
documents,

[[Page 38523]]

provided a minimum of 30 days have passed from the premium billing 
date.
    (2) We will collect any unpaid amounts owed to us and any interest 
owed thereon and, prior to the termination date, we will collect any 
administrative fees and interest owed thereon to FCIC. After the 
termination date, FCIC will collect any unpaid administrative fees and 
any interest owed thereon for any CAT policy and we will collect any 
unpaid administrative fees and any interest owed thereon for additional 
coverage policies.
    (b) For the purpose of any other amounts due us, such as repayment 
of indemnities found not to have been earned, interest will start to 
accrue on the date that notice is issued to you for the collection of 
the unearned amount.
    (1) Amounts found due under this paragraph will not be charged 
interest if payment is made within 30 days of issuance of the notice by 
us.
    (2) The amount will be considered delinquent if not paid within 30 
days of the date the notice is issued by us.
    (c) All amounts paid will be applied first to expenses of 
collection (see subsection (d) of this section), if any, second to the 
reduction of accrued interest, and then to the reduction of the 
principal balance.
    (d) If we determine that it is necessary to contract with a 
collection agency or to employ an attorney to assist in collection, you 
agree to pay all of the expenses of collection.
    (e) The portion of the amounts owed by you for a policy authorized 
under the Act that are owed to FCIC may be collected in part through 
administrative offset from payments you receive from United States 
government agencies in accordance with 31 U.S.C. chapter 37. Such 
amounts include all administrative fees, and the share of the overpaid 
indemnities and premiums retained by FCIC plus any interest owed 
thereon.

[FCIC Policies]
23. Appeal, Reconsideration, and Administrative and Judicial Review
    (a) All determinations required by the policy will be made by us. 
All expected county yields and final county yields are calculated by us 
in accordance with section 15. However, calculations of expected county 
yields and final county yields are matters of general applicability.
    (1) Any matter of general applicability is not subject to appeal 
under 7 CFR part 400, subpart J or 7 CFR part 11.
    (2) Your only remedy is judicial review but if you want to seek 
judicial review of any determination by us that is a matter of general 
applicability, you must request a determination of non-appealability 
from the Director of the National Appeals Division in accordance with 7 
CFR 11.6 before seeking judicial review.
    (3) The timeframe to request a determination of non-appealability 
from the Director of the National Appeals Division is not later than 30 
days after the date the yields are published on the RMA Web site.
    (b) If you disagree with our determinations:
    (1) Except for determinations specified in section 23(b)(2), obtain 
an administrative review in accordance with 7 CFR part 400, subpart J 
or appeal in accordance with 7 CFR part 11; or
    (2) For determinations regarding whether you have used good farming 
practices, request reconsideration in accordance with the 
reconsideration process established for this purpose and published at 7 
CFR part 400, subpart J.
    (c) If you fail to exhaust your administrative remedies under 7 CFR 
part 11 or the reconsideration process for determinations of good 
farming practices described in section 23(b)(2), as applicable, you 
will not be able to resolve the dispute through judicial review.
    (d) If reconsideration for good farming practices under 7 CFR part 
400, subpart J or appeal under 7 CFR part 11 has been initiated within 
the time frames specified in those sections and judicial review is 
sought, any suit against us must be:
    (1) Filed not later than one year after the date of the decision 
rendered in the reconsideration process for good farming practices or 
administrative review process under 7 CFR part 11; and
    (2) Brought in the United States district court for the district in 
which the insured farm involved in the decision is located.
    (e) You may only recover contractual damages from us. Under no 
circumstances can you recover any attorney fees or other expenses, or 
any punitive, compensatory or any other damages from us in 
administrative review, appeal or litigation.

[Reinsured policies]
23. Mediation, Arbitration, Appeal, Reconsideration, and Administrative 
and Judicial Review
    (a) All expected county yields and final county yields are 
calculated by FCIC in accordance with section 15. However, calculations 
of expected county yields and final county yields are matters of 
general applicability.
    (1) Any matter of general applicability is not subject to appeal 
under 7 CFR part 400, subpart J or 7 CFR part 11.
    (2) Your only remedy is judicial review but if you want to seek 
judicial review of any FCIC determination that is a matter of general 
applicability, you must request a determination of non-appealability 
from the Director of the National Appeals Division in accordance with 7 
CFR 11.6 before seeking judicial review.
    (3) The timeframe to request a determination of non-appealability 
from the Director of the National Appeals Division is not later than 30 
days after the date the yields are published on RMA's Web site.
    (b) With respect to good farming practices:
    (1) We will make preliminary decisions regarding what constitutes a 
good farming practice.
    (2) If you disagree with our decision of what constitutes a good 
farming practice, you must request a determination from FCIC of what 
constitutes a good farming practice.
    (3) If you do not agree with any determination made by FCIC 
regarding what constitutes a good farming practice:
    (i) You may request reconsideration by FCIC of this determination 
in accordance with the reconsideration process established for this 
purpose and published at 7 CFR part 400, subpart J; or
    (ii) You may file suit against FCIC as follows:
    (A) You are not required to request reconsideration from FCIC 
before filing suit;
    (B) Any suit must be brought against FCIC in the United States 
district court for the district in which the insured acreage is 
located; and
    (C) Suit must be filed against FCIC not later than one year after 
the date:
    (1) Of the determination made by FCIC regarding what constitutes a 
good farming practice; or
    (2) Reconsideration is completed, if reconsideration was requested 
under section 23(b)(2)(i).
    (c) If you elect to bring suit against FCIC after seeking a 
Director's Review in accordance with section 23(a), such suit must be 
filed against FCIC in the United States district court for the district 
in which the insured acreage is located not later than one year after 
the date of the decision rendered by the Director. Under no 
circumstances can you recover any punitive, compensatory or any other 
damages from FCIC.
    (d) With respect to any other determination under this policy:
    (1) If you and we fail to agree on any determination not covered by 
sections

[[Page 38524]]

23(a) and (c), the disagreement may be resolved through mediation. To 
resolve any dispute through mediation, you and we must both:
    (i) Agree to mediate the dispute;
    (ii) Agree on a mediator; and
    (iii) Be present or have a designated representative who has 
authority to settle the case present, at the mediation.
    (2) If resolution cannot be reached through mediation, or you and 
we do not agree to mediation, the disagreement must be resolved through 
arbitration in accordance with the rules of the American Arbitration 
Association (AAA), unless otherwise stated in this subsection or rules 
are established by FCIC for this purpose. Any mediator or arbitrator 
with a familial, financial or other business relationship to you or us, 
or our agent or loss adjuster, is disqualified from hearing the 
dispute.
    (3) If the dispute in any way involves a policy or procedure 
interpretation, regarding whether a specific policy provision or 
procedure is applicable to the situation, how it is applicable, or the 
meaning of any policy provision or procedure, either you or we must 
obtain an interpretation from FCIC in accordance with 7 CFR part 400, 
subpart X or such other procedures as established by FCIC.
    (i) Any interpretation by FCIC will be binding in any mediation or 
arbitration.
    (ii) Failure to obtain any required interpretation from FCIC will 
result in the nullification of any agreement or award.
    (iii) An interpretation by FCIC of a policy provision is considered 
a determination that is a matter of general applicability. However, 
before such interpretation may be challenged in the courts, you must 
request a determination of non-appealability from the Director of the 
National Appeals Division not later than 30 days after the date the 
interpretation was published on RMA's Web site.
    (4) Unless the dispute is resolved through mediation, the 
arbitrator must provide to you and us a written statement describing 
the issues in dispute, the factual findings, the determinations and the 
amount and basis for any award and breakdown by claim for any award.
    (i) The statement must also include any amounts awarded for 
interest.
    (ii) Failure of the arbitrator to provide such written statement 
will result in the nullification of all determinations of the 
arbitrator.
    (iii) All agreements reached through settlement, including those 
resulting from mediation, must be in writing and contain at a minimum a 
statement of the issues in dispute and the amount of the settlement.
    (5) Regardless of whether mediation is elected:
    (i) The initiation of arbitration proceedings must occur within one 
year of the date we denied your claim or rendered the determination 
with which you disagree, whichever is later;
    (ii) If you fail to initiate arbitration in accordance with section 
23(d)(5)(i) and complete the process, you will not be able to resolve 
the dispute through judicial review;
    (iii) If arbitration has been initiated in accordance with section 
23(d)(5)(i) and completed, and judicial review is sought, suit must be 
filed not later than one year after the date the arbitration decision 
was rendered; and
    (iv) In any suit, if the dispute in any way involves a policy or 
procedure interpretation, regarding whether a specific policy provision 
or procedure is applicable to the situation, how it is applicable, or 
the meaning of any policy provision or procedure, an interpretation 
must be obtained from FCIC in accordance with 7 CFR part 400, subpart X 
or such other procedures as established by FCIC. Such interpretation 
will be binding on all parties.
    (6) Any decision rendered in arbitration is binding on you and us 
unless judicial review is sought in accordance with section 
23(d)(5)(iii). Notwithstanding any provision in the rules of the AAA, 
you and we have the right to judicial review of any decision rendered 
in arbitration.
    (e) In any mediation, arbitration, appeal, administrative review, 
reconsideration or judicial process, the terms of this policy, the Act, 
and the regulations published at 7 CFR chapter IV, including the 
provisions of 7 CFR part 400, subpart P, are binding. Conflicts between 
this policy and any state or local laws will be resolved in accordance 
with section 27. If there are conflicts between any rules of the AAA 
and the provisions of your policy, the provisions of your policy will 
control.
    (f) Except as provided in section 23(g), no award or settlement in 
mediation, arbitration, appeal, administrative review or 
reconsideration process or judicial review can exceed the amount of 
liability established or which should have been established under the 
policy, except for interest awarded in accordance with section 24.
    (g) In a judicial review only, you may recover attorney fees or 
other expenses, or any punitive, compensatory or any other damages from 
us only if you obtain a determination from FCIC that we, our agent or 
loss adjuster failed to comply with the terms of this policy or 
procedures issued by FCIC and such failure resulted in you receiving a 
payment in an amount that is less than the amount to which you were 
entitled. Requests for such a determination should be addressed to the 
following: USDA/RMA/Deputy Administrator for Compliance/Stop 0806, 1400 
Independence Avenue, SW., Washington, DC 20250-0806.
24. Interest Limitations
    We will pay simple interest computed on the net indemnity 
ultimately found to be due by us or by a final judgment of a court of 
competent jurisdiction, from and including the 61st day after the final 
county yield or final county revenue release date as specified in the 
applicable Crop Provision.
    (a) Interest will be paid only if the reason for our failure to 
timely pay is NOT due to your failure to provide information or other 
material necessary for the computation or payment of the indemnity.
    (b) The interest rate will be that established by the Secretary of 
the Treasury under section 12 of the Contract Disputes Act of 1978 (41 
U.S.C. 611) and published in the Federal Register semiannually on or 
about January 1 and July 1 of each year, and may vary with each 
publication.
25. Descriptive Headings
    The descriptive headings of the various policy provisions are 
formulated for convenience only and are not intended to affect the 
construction or meaning of any of the policy provisions.
26. Conformity to Food Security Act
    Although your violation of a number of federal statutes, including 
the Act, may cause cancellation, termination, or voidance of your 
insurance contract, you should be specifically aware that your policy 
will be canceled if you are determined to be ineligible to receive 
benefits under the Act due to violation of the controlled substance 
provisions (title XVII) of the Food Security Act of 1985 (Pub. L. 99-
198) and the regulations promulgated under the Act by USDA.
    (a) Your insurance policy will be canceled if you are determined, 
by the appropriate Agency, to be in violation of these provisions.
    (b) We will recover any and all monies paid to you or received by 
you during your period of ineligibility, and your premium will be 
refunded, less an amount for expenses and handling equal to 20 percent 
of the premium paid or to be paid by you.

[[Page 38525]]

27. Applicability of State and Local Statutes
    If the provisions of this policy conflict with statutes of the 
State or locality in which this policy is issued, the policy provisions 
will prevail. State and local laws and regulations in conflict with 
federal statutes, this policy, and the applicable regulations do not 
apply to this policy.
28. Concealment, Misrepresentation, or Fraud
    (a) If you have falsely or fraudulently concealed the fact that you 
are ineligible to receive benefits under the Act or if you or anyone 
assisting you has intentionally concealed or misrepresented any 
material fact relating to this policy:
    (1) This policy will be voided; and
    (2) You may be subject to remedial sanctions in accordance with 7 
CFR part 400, subpart R.
    (b) Even though the policy is void, you will still be required to 
pay 20 percent of the premium that you would otherwise be required to 
pay to offset costs incurred by us in the service of this policy. If 
previously paid, the balance of the premium will be returned.
    (c) Voidance of this policy will result in you having to reimburse 
all indemnities paid for the crop year in which the voidance was 
effective.
    (d) Voidance will be effective on the first day of the insurance 
period for the crop year in which the act occurred and will not affect 
the policy for subsequent crop years unless a violation of this section 
also occurred in such crop years.
    (e) If you willfully and intentionally provide false or inaccurate 
information to us or FCIC, or you fail to comply with a requirement of 
FCIC, in accordance with 7 CFR part 400, subpart R, FCIC may impose on 
you:
    (1) A civil fine for each violation in an amount not to exceed the 
greater of:
    (i) The amount of the pecuniary gain obtained as a result of the 
false or inaccurate information provided or the noncompliance with a 
requirement of this title; or
    (ii) $10,000; and
    (2) A disqualification for a period of up to 5 years from receiving 
any monetary or nonmonetary benefit provided under each of the 
following:
    (i) Any crop insurance policy offered under the Act;
    (ii) The Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
7333 et seq.);
    (iii) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.);
    (iv) The Commodity Credit Corporation Charter Act (15 U.S.C. 714 et 
seq.);
    (v) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et 
seq.);
    (vi) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et 
seq.);
    (vii) The Consolidated Farm and Rural Development Act (7 U.S.C. 
1921 et seq.); and
    (viii) Any federal law that provides assistance to a producer of a 
commodity affected by a crop loss or a decline in the prices of 
commodities.
29. Multiple Benefits
    (a) If you are eligible to receive an indemnity under an additional 
coverage plan of insurance and are also eligible to receive benefits 
for the same loss under any other USDA program, you may receive 
benefits under both programs, unless specifically limited by the crop 
insurance contract or by law.
    (b) Any amount received for the same loss from any USDA program, in 
addition to the crop insurance payment, will not exceed the difference 
between the crop insurance payment and the amount of the loss, unless 
otherwise provided by law. The amount of loss is the difference between 
the total value of the insured crop before the loss and the total value 
of the insured crop after the loss.
    (c) FSA or another USDA agency, as applicable, will determine and 
pay the additional amount due you for any applicable USDA program, 
after first considering the amount of any crop insurance indemnity.
30. Examples
    The following are examples of the calculation of the premium, 
amount of insurance and indemnity for each of the three plans of 
insurance under ARPI. Your information will likely be different and you 
should consult the actuarial documents in your county and the policy 
information. The following facts are for illustration purposes only and 
apply to each of the examples.
    Producer A farms 100 acres in county X and has a 100 percent share, 
or 1.000, in those acres. From the actuarial documents in county X, 
Producer A elects the 75 percent coverage level and a protection factor 
of 110 percent or 1.10. The actuarial documents in county X also show 
that the expected county yield is 141.4 bushels per acre, the projected 
price is $4.00, and the expected county revenue is $565.60. The subsidy 
factor for the 75 percent coverage level is .55 for revenue coverage 
and .59 for yield coverage. The loss limit factor is 18 percent or .18. 
At the end of the insurance period, for county X, FCIC releases a 
harvest price of $4.57 and a final county yield for county X of 75.0 
bushels.
    The premium rate is based on the published volatility factor and 
for this example is .0166 for Area Revenue Protection, .0146 for Area 
Revenue Protection with Harvest Price Exclusion, and .0116 for Area 
Yield Protection.
    Area Revenue Protection example:
Step 1: Calculate the Dollar Amount of Insurance per Acre
Formula: Expected county yield times projected price times protection 
factor equals dollar amount of insurance
141.4 bushels x $4.00 x 1.1 = $622.16 dollar amount of insurance per 
acre
Step 2: Calculate the Policy Protection
Formula: Dollar amount of insurance per acre times acres times share 
equals policy protection
$622.16 x 100.0 x 1.000 = $62,216 policy protection
Step 3: Calculate the Total Premium
Formula: Policy protection times premium rate equals total premium
$62,216 x .0166 = $1,033 total premium
Step 4: Calculate the Subsidy amount
Formula: Total premium times subsidy factor equals subsidy
$1,033 x .55 = $568 subsidy
Step 5: Calculate the Producer Premium
Formula: Total premium minus subsidy equals producer premium
$1,033 - $568 = $465 producer premium
Step 6: Calculate the Final Policy Protection
Formula: Expected county yield times (greater of projected price or 
harvest price) times protection factor times acres times share equals 
Final Policy Protection
141.4 bushels x $4.57 x 1.10 x 100.0 x 1.000 = $71,082 final policy 
protection
Step 7: Calculate the Final County Revenue
Formula: Final county yield times harvest price equals final county 
revenue
75.0 bushels x $4.57 = $342.75 final county revenue
Step 8: Calculate the Trigger Revenue
Formula: Expected county yield times (greater of projected price or 
harvest price) times coverage level equals trigger revenue
141.4 bushels x $4.57 x .75 = $484.65 trigger revenue

[[Page 38526]]

Step 9: Calculate the Payment Factor
Formula: (Trigger revenue minus final county revenue) divided by 
(trigger revenue minus (expected county yield times the greater of 
projected or harvest price times loss limit factor)) equals payment 
factor
($484.65 - $342.75) / ($484.65-(141.4 x $4.57 x .18)) = .385 payment 
factor
Step 10: Calculate the Indemnity
Formula: Final policy protection times payment factor equals indemnity
$71,082 x .385 = $27,367 indemnity
    Area Revenue Protection with Harvest Price Exclusion example:
Step 1: Calculate the Dollar Amount of Insurance per Acre
Formula: Expected county yield times projected price times protection 
factor equals dollar amount of insurance
141.4 bushels x $4.00 x 1.10 = $622.16 dollar amount of insurance per 
acre
Step 2: Calculate the Policy Protection
Formula: Dollar amount of insurance per acre times acres times share 
equals policy protection
$622.16 x 100.0 x 1.000 = $62,216 policy protection
Step 3: Calculate the Total Premium
Formula: Policy protection times rate equals total premium
$62,216 x .0146 rate = $908 total premium
Step 4: Calculate the Subsidy Amount
Formula: Total premium times subsidy factor equals subsidy
$908 x .55 = $499 subsidy
Step 5: Calculate the Producer Premium
Formula: Total premium minus subsidy equals producer premium
$908 - $499 = $409 producer premium
Step 6: Calculate the Final Policy Protection
Use the policy protection amount calculated at the beginning of the 
insurance period in Step 2
$62,216 policy protection
Step 7: Calculate the Final County Revenue
Formula: Final county yield times harvest price equals final county 
revenue
75.0 bushels x $4.57 = $342.75 final county revenue
Step 8: Calculate the Trigger Revenue
Formula: Expected county yield times projected price times coverage 
level equals trigger revenue
141.4 bushels x $4.00 x .75 = $424.20 trigger revenue
Step 9: Calculate the Payment Factor
Formula: (Trigger revenue minus final county revenue) divided by 
(trigger revenue minus (expected county yield times projected price 
times loss limit factor)) equals payment factor
($424.20 - $342.75) / ($424.20 - (141.4 x $4.00 x .18)) = .253
Step 10: Calculate the Indemnity
Formula: Final policy protection times payment factor equals indemnity
$62,216 x .253 = $15741 indemnity

Area Yield Protection example:

Step 1: Calculate the Dollar Amount of Insurance per Acre
Formula: Expected county yield times projected price times protection 
factor equals dollar amount of insurance
141.4 bushels x $4.00 x 1.10 = $622.16 dollar amount of insurance per 
acre
Step 2: Calculate the Policy Protection
Formula: Dollar amount of insurance per acre times acres times share = 
policy protection
$622.16 x 100.0 x 1.000 = $62,216 policy protection
Step 3: Calculate the Total Premium
Formula: policy protection times premium rate equals total premium
$62,216 x .0116 rate = $722 total premium
Step 4: Calculate the Subsidy amount
Formula: Total premium times subsidy factor equals subsidy
$722 x .59 subsidy factor = $426 subsidy
Step 5: Calculate the Producer Premium
Formula: Total premium minus subsidy equals producer premium
$722 - $426 = $296 producer premium
Step 6: Calculate the Final Policy Protection
Use the policy protection amount calculated at the beginning of the 
insurance period in Step 2
$62,216 policy protection
Step 7: Calculate the Trigger Yield
Formula: Expected county yield times coverage level equals trigger 
yield
141.4 bushels times .75 = 106.1 bushels
Step 8: Calculate the Payment Factor
Formula: (Trigger yield minus final county yield) divided by (trigger 
yield minus (expected county yield times loss limit factor)) equals 
payment factor
(106.1 bushels - 75.0 bushels) / (106.1 bushels - (141.4 bushels x 
.18)) = .386
Step 9: Calculate the Indemnity
Formula: Final policy protection times payment factor equals indemnity
$62,216 times .386 = $24,015 Indemnity


Sec.  407.10  Area risk protection insurance for barley.

    The barley crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Area Risk Protection Insurance

Barley Crop Insurance Provisions
1. Definitions
    Harvest. Combining or threshing the barley for grain.
    Planted acreage. In addition to the definition contained in the 
Area Risk Protection Insurance Basic Provisions, land on which seed is 
initially spread onto the soil surface by any method and which 
subsequently is mechanically incorporated into the soil in a timely 
manner and at the proper depth will also be considered planted.
2. Insured Crop
    The insured crop will be all barley:
    (a) Grown on insurable acreage in the county listed on the accepted 
application;
    (b) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (c) Planted with the intent to be harvested;
    (d) Not planted into an established grass or legume;
    (e) Not interplanted with another crop; and
    (f) Not planted as a nurse crop, unless seeded at the normal rate 
and intended for harvest as grain.
3. Payment Dates
    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to 
April 1 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 1 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.
4. Program Dates

[[Page 38527]]



----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Kit Carson, Lincoln, Elbert, El Paso, Pueblo, Las    September 30.............  June 30.
 Animas Counties, Colorado and all Colorado
 Counties south and east thereof; all New Mexico
 counties except Taos County; Kansas; Missouri;
 Illinois; Indiana; Ohio; Pennsylvania; New York;
 Massachusetts; and all states south and east
 thereof.
Arizona; California; and Clark and Nye Counties,     October 31...............  June 30.
 Nevada.
All Colorado counties except Kit Carson, Lincoln,    March 15.................  November 30.
 Elbert, El Paso, Pueblo, and Las Animas Counties
 and all Colorado counties south and east thereof;
 all Nevada counties except Clark and Nye Counties;
 Taos County, New Mexico; and all other states
 except: Arizona, California, and (except) Kansas,
 Missouri, Illinois, Indiana, Ohio, Pennsylvania,
 New York, and Massachusetts and all States south
 and east thereof.
----------------------------------------------------------------------------------------------------------------

Sec.  407.11  Area risk protection insurance for corn.

    The corn crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Area Risk Protection Insurance

Corn Crop Insurance Provisions
1. Definitions
    Harvest. Combining or picking corn for grain or cutting for hay, 
silage, fodder, or earlage.
    Planted acreage. In addition to the definition contained in the 
Area Risk Protection Insurance Basic Provisions, corn seed that is 
broadcast and subsequently mechanically incorporated will not be 
considered planted.
2. Insured Crop
    (a) The insured crop will be all field corn that is:
    (1) Yellow dent or white corn, including mixed yellow and white, 
waxy or high-lysine corn, high-oil corn blends containing mixtures of 
at least 90 percent high yielding yellow dent female plants with high-
oil male pollinator plants, or commercial varieties of high-protein 
hybrids.
    (2) Grown on insurable acreage in the county listed on the accepted 
application;
    (3) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (4) Planted with the intent to be harvested; and
    (5) Not planted into an established grass or legume or interplanted 
with another crop.
    (b) Corn other than that specified in section 2(a)(1) including but 
not limited to high-amylose, high-oil or high-protein (except as 
authorized in section 2(a)(1)), flint, flour, hybrid seed corn, Indian, 
or blue corn, or a variety genetically adapted to provide forage for 
wildlife or any other open pollinated corn may be insurable under this 
policy if specified in the Special Provisions:
    (1) The insurability requirements in 2(a) apply to this other corn 
and additional requirements for insurability may be stated for this 
other corn in the Special Provisions; and
    (2) This other corn will be insured using the yields, rates, and 
prices for field corn unless otherwise specified in the actuarial 
documents.
3. Payment Dates
    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to 
April 16 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 16 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.
4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, Wilson,    January 31...............  November 30.
 Karnes, Goliad, Victoria, and Jackson Counties,
 Texas, and all Texas counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, Loving,        February 15..............  November 30.
 Winkler, Ector, Upton, Reagan, Sterling, Coke, Tom
 Green, Concho, McCulloch, San Saba, Mills,
 Hamilton, Bosque, Johnson, Tarrant, Wise, and
 Cooke Counties, Texas, and all Texas Counties
 lying south and east thereof to and including
 Terrell, Crockett, Sutton, Kimble, Gillespie,
 Blanco, Comal, Guadalupe, Gonzales, De Witt,
 Lavaca, Colorado, Wharton, and Matagorda Counties,
 Texas.
Alabama; Arizona; Arkansas; California; Florida;     February 28..............  November 30.
 Georgia; Louisiana; Mississippi; Nevada; North
 Carolina; South Carolina.
All other Texas counties and all other states......  March 15.................  November 30.
----------------------------------------------------------------------------------------------------------------

Sec.  407.12  Area risk protection insurance for cotton.

    The cotton crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Area Risk Protection Insurance

Cotton Crop Insurance Provisions
1. Definitions
    Harvest. Removal of the seed cotton from the stalk.
    Planted acreage. In addition to the definition contained in the 
Area Risk Protection Insurance Basic Provisions, cotton seed broadcast 
and subsequently mechanically incorporated will not be considered 
planted.
2. Insured Crop
    (a) The insured crop will be all upland cotton:
    (1) Grown on insurable acreage in the county listed on the accepted 
application;

[[Page 38528]]

    (2) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (3) Planted with the intent to be harvested.
    (b) That is not (unless allowed by the Special Provisions):
    (1) Colored cotton lint;
    (2) Planted into an established grass or legume;
    (3) Interplanted with another spring planted crop;
    (4) Grown on acreage in which a hay crop was harvested in the same 
calendar year unless the acreage is irrigated; or
    (5) Grown on acreage on which a small grain crop reached the 
heading stage in the same calendar year unless the acreage is irrigated 
or adequate measures are taken to terminate the small grain crop prior 
to heading and less than 50 percent of the small grain plants reach the 
heading stage.
    (c) Cotton other than upland cotton may be insurable under this 
policy if specified in the Special Provisions:
    (1) The insurability requirements in 2(a) apply to other cotton and 
additional requirements for insurability may be stated for other cotton 
in the Special Provisions; and
    (2) Other cotton will be insured using the yields, rates, and 
prices for cotton unless otherwise specified in the actuarial 
documents.
3. Payment Dates
    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to 
July 16 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to August 15 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.
4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, Wilson,    January 31...............  November 30.
 Karnes, Goliad, Victoria, and Jackson Counties,
 Texas, and all Texas counties lying south thereof.
Alabama; Arizona; Arkansas; California; Florida;     February 28..............  November 30.
 Georgia; Louisiana; Mississippi; Nevada; North
 Carolina; South Carolina; El Paso, Hudspeth,
 Culberson, Reeves, Loving, Winkler, Ector, Upton,
 Reagan, Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton, Bosque,
 Johnson, Tarrant, Wise, and Cooke Counties, Texas,
 and all Texas counties lying south and east
 thereof to and including Terrell, Crockett,
 Sutton, Kimble, Gillespie, Blanco, Comal,
 Guadalupe, Gonzales, De Witt, Lavaca, Colorado,
 Wharton, and Matagorda Counties, Texas.
All other Texas counties and all other States......  March 15.................  November 30.
----------------------------------------------------------------------------------------------------------------

Sec.  407.13  Area risk protection insurance for forage.

    The forage crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Area Risk Protection Insurance

Forage Crop Insurance Provisions
1. Definitions
    Forage. Planted perennial alfalfa, perennial red clover, perennial 
grasses, or a mixture thereof, or other species as shown in the 
actuarial documents.
    Harvest. Removal of the forage from the field, and rotational 
grazing.
    Rotational grazing. The defoliation of the insured forage by 
livestock, within a pasturing system whereby the forage field is 
subdivided into smaller parcels and livestock are moved from one area 
to another, allowing a period of grazing followed by a period for 
forage regrowth.
2. Insured Crop
    The insured crop will be the forage types shown on the actuarial 
documents:
    (a) Grown on insurable acreage in the county listed on the accepted 
application;
    (b) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (c) Intended for harvest; and
    (d) Not grown with another crop.
3. Insurable Acreage
    In addition to section 5 of the Area Risk Protection Insurance 
Basic Provisions, acreage seeded to forage after July 1 of the previous 
crop year will not be insurable.
4. Payment Dates
    (a) Unless otherwise specified in the Special Provisions the final 
county yields will be determined prior to May 1 following the crop 
year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 31 
following the crop year and following the determination of the final 
county yield.
5. Program Dates
    November 30 is the cancellation and termination date for all 
states, or as specified in the Special Provisions. The contract change 
date is August 31 for all states, or as specified in the Special 
Provisions.
6. Annual Premium
    In lieu of section 7(e) of the Area Risk Protection Insurance Basic 
Provisions, the annual premium is earned and payable on the acreage 
reporting date. You will be billed for premium due on the date shown in 
the actuarial documents. The premium will be determined based on the 
rate shown on the actuarial documents.


Sec.  407.14  Area risk protection insurance for peanuts

    The peanut crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Area Risk Protection Insurance

Peanut Crop Insurance Provisions
1. Definitions
    Harvest. The completion of digging and threshing and removal of 
peanuts from the field.
    Planted acreage. In addition to the definition contained in the 
Area Risk Protection Insurance Basic Provisions, peanuts must initially 
be planted in a row pattern which permits mechanical cultivation, or 
that allows the peanuts to be cared for in a manner recognized by 
agricultural experts as a good farming practice. Acreage planted in any 
other manner will not be insurable unless otherwise provided by the 
Special Provisions.

[[Page 38529]]

2. Insured Crop
    (a) The insured crop will be all peanuts:
    (1) Grown on insurable acreage in the county listed on the accepted 
application;
    (2) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (3) Planted with the intent to be harvested as peanuts; and
    (4) Not planted into an established grass or legume or interplanted 
with another crop.
3. Payment Dates
    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and or final county yields will be determined prior to 
June 16 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to July 16 
and following the determination of the final county revenue or the 
final county yield, as applicable.
4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak, McMullen,  January 15...............  November 30.
 La Salle, and Dimmit Counties, Texas and all Texas
 Counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, Loving,        February 28..............  November 30.
 Winkler, Ector, Upton, Reagan, Sterling, Coke, Tom
 Green, Concho, McCulloch, San Saba, Mills,
 Hamilton, Bosque, Johnson, Tarrant, Wise, and
 Cooke Counties, Texas, and all Texas counties
 south and east thereof; and all other states
 except New Mexico, Oklahoma, and Virginia.
New Mexico; Oklahoma; Virginia; and all other Texas  March 15.................  November 30.
 Counties.
----------------------------------------------------------------------------------------------------------------

Sec.  407.15  Area risk protection insurance for grain sorghum.

    The grain sorghum crop insurance provisions for Area Risk 
Protection Insurance for the 2014 and succeeding crop years are as 
follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Area Risk Protection Insurance

Grain Sorghum Crop Insurance Provisions
1. Definitions
    Harvest. Combining or threshing the sorghum for grain or cutting 
for hay, silage, or fodder.
    Planted acreage. In addition to the definition contained in the 
Area Risk Protection Insurance Basic Provisions, sorghum seed broadcast 
and subsequently mechanically incorporated will not be considered 
planted.
2. Insured Crop
    (a) The insured crop will be all sorghum excluding hybrid sorghum 
seed:
    (1) Grown on insurable acreage in the county listed on the accepted 
application;
    (2) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (3) Planted with the intent to be harvested; and
    (4) Not planted into an established grass or legume or interplanted 
with another crop.
    (b) Other sorghum including hybrid sorghum seed may be insurable 
under this policy if specified in the Special Provisions:
    (1) The insurability requirements in 2(a) apply to these other 
sorghum and additional requirements for insurability may be stated for 
these crops in the Special Provisions; and
    (2) This other sorghum will be insured using the yields, rates, and 
prices for sorghum unless otherwise specified in the actuarial 
documents.
3. Payment Dates
    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to 
April 16 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 16 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.
4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar, Wilson,    January 31...............  November 30.
 Karnes, Goliad, Victoria, and Jackson Counties,
 Texas, and all Texas counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves, Loving,        February 15..............  November 30.
 Winkler, Ector, Upton, Reagan, Sterling, Coke, Tom
 Green, Concho, McCulloch, San Saba, Mills,
 Hamilton, Bosque, Johnson, Tarrant, Wise, and
 Cooke Counties, Texas, and all Texas counties
 south and east thereof to and including Terrell,
 Crockett, Sutton, Kimble, Gillespie, Blanco,
 Comal, Guadalupe, Gonzales, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda Counties, Texas.
Alabama; Arizona; Arkansas; California; Florida;     February 28..............  November 30.
 Georgia; Louisiana; Mississippi; Nevada; North
 Carolina; and South Carolina.
All other Texas counties and all other states......  March 15.................  November 30.
----------------------------------------------------------------------------------------------------------------


[[Page 38530]]

Sec.  407.16  Area risk protection insurance for soybean.

    The soybean crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Area Risk Protection Insurance

Soybean Crop Insurance Provisions
1. Definitions
    Harvest. Combining or threshing the soybeans.
    Planted acreage. In addition to the definition contained in the 
Area Risk Protection Insurance Basic Provisions, land on which seed is 
initially spread onto the soil surface by any method and which 
subsequently is mechanically incorporated into the soil in a timely 
manner and at the proper depth, will also be considered planted, unless 
specified otherwise in the Special Provisions.
2. Insured Crop
    The insured crop will be all soybeans:
    (a) Grown on insurable acreage in the county listed on the accepted 
application;
    (b) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (c) Planted with the intent to be harvested; and
    (d) Not planted into an established grass or legume or interplanted 
with another crop.
3. Payment Dates
    (a) Unless otherwise specified in the Special Provisions final 
county revenues and final county yields will be determined prior to 
April 16 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 16 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.
4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak, McMullen,  January 31...............  November 30.
 La Salle, and Dimmit Counties, Texas and all Texas
 counties lying south thereof.
Alabama; Arizona; Arkansas; California; Florida;     February 28..............  November 30.
 Georgia; Louisiana; Mississippi; Nevada; North
 Carolina; South Carolina; and El Paso, Hudspeth,
 Culberson, Reeves, Loving, Winkler, Ector, Upton,
 Reagan, Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton, Bosque,
 Johnson, Tarrant, Wise, and Cooke Counties, Texas,
 and all Texas counties lying south and east
 thereof to and including Maverick, Zavala, Frio,
 Atascosa, Karnes, De Witt, Lavaca, Colorado,
 Wharton, and Matagorda Counties, Texas.
All other Texas counties and all other states......  March 15.................  November 30.
----------------------------------------------------------------------------------------------------------------

Sec.  407.17  Area risk protection insurance for wheat.

    The wheat crop insurance provisions for Area Risk Protection 
Insurance for the 2014 and succeeding crop years are as follows:

UNITED STATES DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

Area Risk Protection Insurance

Wheat Crop Insurance Provisions
1. Definitions
    Harvest. Combining or threshing the wheat for grain.
    Planted acreage. In addition to the definition contained in the 
Area Risk Protection Insurance Basic Provisions, land on which seed is 
initially spread onto the soil surface by any method and which 
subsequently is mechanically incorporated into the soil in a timely 
manner and at the proper depth will also be considered planted.
2. Insured Crop
    The insured crop will be all wheat:
    (a) Grown on insurable acreage in the county listed on the accepted 
application;
    (b) Properly planted by the final planting date and reported on or 
before the acreage reporting date;
    (c) Planted with the intent to be harvested;
    (d) Not planted into an established grass or legume;
    (e) Not interplanted with another crop; and
    (f) Not planted as a nurse crop, unless seeded at the normal rate 
and intended for harvest as grain.
3. Payment Dates
    (a) Unless otherwise specified in the Special Provisions the final 
county revenues and final county yields will be determined prior to 
April 1 following the crop year.
    (b) If an indemnity is due, unless otherwise specified in the 
Special Provisions we will issue any payment to you prior to May 1 
following the crop year and following the determination of the final 
county revenue or the final county yield, as applicable.
4. Program Dates

----------------------------------------------------------------------------------------------------------------
                                                          Cancellation and
                  State and county                       termination dates            Contract change date
----------------------------------------------------------------------------------------------------------------
All Colorado counties except Alamosa, Conejos,       September 30.............  June 30.
 Costilla, Rio Grande, and Saguache; all Montana
 counties except Daniels and Sheridan Counties; all
 South Dakota counties except Corson, Walworth,
 Edmonds, Faulk, Spink, Beadle, Kingsbury, Miner,
 McCook, Turner, and Yankton Counties and all South
 Dakota counties east thereof; all Wyoming counties
 except Big Horn, Fremont, Hot Springs, Park, and
 Washakie Counties; and all other states except
 Alaska, Arizona, California, Maine, Minnesota,
 Nevada, New Hampshire, North Dakota, Utah, and
 Vermont.
Arizona; California; Nevada; and Utah..............  October 31...............  June 30

[[Page 38531]]

 
Alaska; Alamosa, Conejos, Costilla, Rio Grande, and  March 15.................  November 30.
 Saguache Counties, Colorado; Maine; Minnesota;
 Daniels and Sheridan Counties, Montana; New
 Hampshire; North Dakota; Corson, Walworth,
 Edmunds, Faulk, Spink, Beadle, Kingsbury, Miner,
 McCook, Turner, and Yankton Counties, South
 Dakota, and all South Dakota counties east
 thereof; Vermont; and Big Horn, Fremont, Hot
 Springs, Park, and Washakie Counties, Wyoming.
----------------------------------------------------------------------------------------------------------------


    Signed in Washington, DC, on June 20, 2013.
Brandon Willis,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2013-15222 Filed 6-21-13; 4:15 pm]
BILLING CODE 3410-08-P