SUMMARY OF CHANGES FOR THE LIVESTOCK RISK PROTECTION INSURANCE POLICY
The following is a brief description of the changes to the Livestock Risk Protection insurance policy that are effective for the
2023 and succeeding crop years.
1. Definitions
• Added the definition of “covered livestock” as the livestock insured under an SCE. Throughout the policy the term “insured
livestock” is replaced with “covered livestock” because they have the same meaning.
• Added the definition of “end month” as the calendar month that includes the SCE end date.
• Revised the definition of “expected end value” to refer to “insurance period” since that is the term used most in the policy.
• Added a definition of “insurance period” because the term is used throughout the policy.
• Revised the definition of “insured share” to refer to the “ownership interest” since that is the term defined.
• Revised the definition of “insured value” to replace “livestock or livestock product covered under the Specific Coverage
Endorsement” with “covered livestock” since it is now a defined term.
• Add a definition of “livestock purchase agreement” to include the number of livestock purchased by the insured, the price,
and a delivery or pick up date.
• Added a definition of “bill of sale” as documentation showing a specified number of livestock sold by the insured to a buyer
at a specified price, and a delivery or pick up date that occurs within the insurance period of the applicable Specific
Coverage Endorsement.
• Delete the definition of “livestock product” since no livestock products are insured under the policy.
• Add a definition of “marketable” to mean that the covered livestock whose average actual weight on the earlier of end date
or when livestock is sold meets or exceeds the minimum allowed target weight.
• Add a definition of “ownership interest” to distinguish it from “insured share” since insured share is simply the percentage
of the ownership interest.
• Add a definition of “sold” to clarify that livestock are considered sold at the time they are possessed by the buyer, not the
date of the livestock purchase agreement.
• Revise the definition of “unborn livestock” to clarify they must be marketable by the end date.
• Added the definition for “cancellation date,” and revised definitions for “assignment of indemnity,” “RMA,” and “veteran
farmer or rancher” to be consistent with the Common Crop Insurance Policy – Basic Provisions.
2. Life of Policy, Cancellation, and Termination
• Moved section 2(e) to section 6(b) and revised the reference to the reporting of location to specify the state and county.
• Moved sections 2(g), (h) and (i) to a revised section 6, which is now entitled “Covered Livestock,” and redesignated the
remaining paragraphs.
• Updated section 2(g) (previously 2(k)) to clarify that the written notice of cancellation prior to June 30 prevents automatic
renewal of the policy for the next crop year. Cancellation during a crop year to submit an application to another LRP policy
with a different insurance provider within the same crop year is no longer allowed.
• Updated redesignated section 2(h)(3) (previously 2(m)(3)) to clarify when premium will be deducted from indemnity
payments.
• Deleted previous section 2(l) since premium is owed at the end of the insurance period.
• In redesigned section 2(i)(1)(ii), clarified that the insured will not receive any indemnity for any Specific Coverage
Endorsement in effect for the current crop year if the producer is ineligible and the policy has been terminated.
• In redesignated section 2(i)(2)(i)(A) and (B), clarified that when termination occurs after the start of the crop year it is
effective on July 1 of the current crop year, and added examples.
• In redesignated section 2(i)(2)(i)(D), revised the example to conform to the provisions.
• In redesignated 2(i)(5), updated the example to include the termination date of August 31.
• In redesignated section 2(j)(4), clarified that application for coverage must be submitted by the sales closing date.
• In redesignated section 2(m) clarified that the cancellation and termination dates are now specified in the actuarial
documents.
3. Contract Changes
• Clarified contract change date to be April 30 preceding the cancellation date. Only corrections of clear errors are allowed
after April 30. All changes are available from the agent’s office.
4. Coverage Limitations
• Modified section 4(g) to allow restricted use of multiple FCIC reinsured livestock policies covering the same class of
livestock. The insured may not have any other FCIC reinsured livestock policy covering the same class of livestock with
the same end month or have any other FCIC reinsured livestock policy covering the same covered livestock at the same
time.
5. Premium
• Removed provisions 5(b) and 5(d) relating to payment of premium on the date of purchase and redesignated the remaining
paragraphs.
• Clarify 5(c) to state that the premium is earned at the time coverage begins and the producer will be billed by the billing
date contained in the actuarial documents. The language is now consistent with other policies where premium owed at the
end of the coverage period.
6. Covered Livestock
• Revised section 6 to incorporate the provisions of coverage and insurability.
• Added provision 6(a)(1) regarding ownership interest and what qualifies.
• Added provision 6(a)(1)(ii)(A) regarding insurability of unborn livestock.
• Added provision 6(a)(1)(ii)(B) regarding insurability of unborn swine when a different entity owns pregnant sows.
• Add provision 6(a)(2) regarding documents that must be provided to receive an indemnity.
• Modified 6(c)(1) (previously 2(g)(2)) to allow purchase of multiple endorsements for the same class of livestock on the
same sales date if those endorsements are for different end months.
• Added provision 6(d) requiring the adjustment of the number of covered livestock in cases where the insured disposes of
or sells the covered livestock more than 60 days prior to the end date; when livestock are seized, quarantined or destroyed
by order of any governmental authority, or the livestock are not deliverable due to death or disease and the insured does
not provide prior written notice; the insured fails to provide ownership records; or the total weight of the covered livestock
at the end date is less than the number of covered livestock multiplied by the minimum target weight.
8. Insurance Period
• In section 8, clarify that the insurance period starts on the effective date and ends on the end date specified in the SCE.
9. Indemnity Payment for Losses
• Section 9(b) is revised to clarify that claims must be submitted within 60 days following issuance of the claims form by the
approved insurance provider.
• Section 9(c) is revised to stipulate indemnity payments must be made within 30 days (previously 60 days) following the
receipt of the claim form.
12. Access to Covered Livestock and Records, and Record Retention.
• In section 12(c), revise the acceptable records of ownership to include livestock purchase agreements and certified written
statements.
24. Other Insurance
• New section 24 “Other Insurance” is added to provide protocol for voiding prohibited overlapping insurance coverage.
Other Changes
• Sections 14 (Amounts Due Us) and 17 (Assignment of Indemnity) are revised to make them consistent with Common Crop
Insurance Policy – Basic Provisions.
• Previous section 23 “Subrogation” is deleted, and the same matter is now addressed in the newly added Section 24 “Other
Insurance.”
• Removed references to “livestock products” and “administrative fees” throughout the policy.
• Replace references of “insured livestock” with “covered livestock” to be consistent throughout the policy.
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LIVESTOCK RISK PROTECTION INSURANCE POLICY
(This is a continuous policy. Refer to section 2.)
This is a policy for Livestock Risk Protection insurance between you and the policy issuing company, and, when approved by
us in writing, each shall be subject to all of the terms and conditions of this policy. Each Livestock Risk Protection policy shall
be reinsured by the Federal Crop Insurance Corporation (FCIC) under the authority of sections 508(h) and 523(b) of the Federal
Crop Insurance Act (Act) (7 U.S.C. § 1508(h) and 1523(b)).
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 the crop insurance agent or any other agent or employee of the company.
Neither FCIC nor the Risk Management Agency has the authority to revise, amend or otherwise alter this policy. They can only
approve or disapprove for reinsurance those terms submitted by the developer of this policy. In the event we cannot pay your
loss, your claim will be settled in accordance with the provisions of this policy and paid by FCIC. No state guarantee fund will
be liable for your loss.
Throughout this policy, “you” and “your” refer to the named insured shown on the approved application and “we,” “us,” and
“our” refer to the insurance company providing insurance. Unless the context indicates otherwise, use of the plural form of a
word includes the singular and use of the singular form of a word includes the plural.
AGREEMENT TO INSURE: In return for the payment of the 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 a conflict exists among the policy provisions, the order of
priority is as follows: (1) the Special Provisions;(2) the actuarial documents; (3) the Livestock Risk Protection Endorsement;
and (4) these Basic Provisions, with the provisions of (1) controlling (2), etc.
BASIC PROVISIONS
TERMS AND CONDITIONS
1.
Definitions.
Act - The Federal Crop Insurance Act (7 U.S.C. 1501
et seq.).
Actual ending value - The actual ending value is the
price at the end of the insurance period as defined in
each Specific Coverage Endorsement.
Actuarial documents - The information for the crop
year, available for public inspection in your agent’s
office or on the RMA website, which shows the dates,
coverage prices, rates, coverage levels, practices,
insurable class, and other related information regarding
Livestock Risk Protection coverage in the county or
state.
Agricultural Marketing Service (AMS) - An agency of
the United States Department of Agriculture (USDA).
The AMS website is https://www.ams.usda.gov.
Application - The form required to be completed by
you and approved by us in writing before insurance
coverage will begin. The Application form will identify
the insured and the classes of livestock to be insured.
Assignment of indemnity - A transfer of policy rights,
requested on our form, and effective when approved by
us in writing, whereby you assign your right to an
indemnity payment only to creditors or other persons to
whom you have a financial debt or other pecuniary
obligation.
Beginning farmer or rancher - An individual who has
not actively operated and managed a farm or ranch in
any state, with an insurable interest in a crop or
livestock as an owner-operator, landlord, tenant, or
sharecropper for more than five crop years, as
determined in accordance with FCIC procedures. Any
crop year’s insurable interest may, at your election, be
excluded if earned while under the age of 18, while in
full-time military service of the United States, or while
in post-secondary education, in accordance with FCIC
procedures. A person other than an individual may be
eligible for beginning farmer or rancher benefits if there
is at least one individual substantial beneficial interest
holder and all individual substantial beneficial interest
holders qualify as a beginning farmer or rancher.
Bill of sale - Documentation showing a specified
number of livestock sold to a buyer at a specified price,
with a specified delivery or pick-up date.
Cancellation date - The calendar date specified in the
actuarial documents on which coverage will
automatically renew unless canceled in writing by
either you or us or otherwise terminated in accordance
with the policy terms.
CME - The Chicago Mercantile Exchange Group.
Class - The same species of livestock that shares
common traits or characteristics and can be insured
under a Specific Coverage Endorsement.
Consent - Approval in writing by us allowing you to
take a specific action.
Contract change date - The calendar date by which
we make policy changes that will be effective for the
following crop year available for inspection in the
agent’s office or on RMA’s website in accordance with
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section 3 of these Basic Provisions.
Coverage - The insurance provided by this policy
insures against a decline in price as specified in the
Specific Coverage Endorsement.
Coverage level - The percent of the expected ending
value that is the coverage provided by the policy.
Coverage price - The level of protection provided by
the policy on a dollar per cwt basis as published each
day on RMA’s website.
Covered livestock – The livestock insured under an
SCE.
Crop year - The twelve-month period, beginning on
July 1 and ending on the following June 30 and
designated by the calendar year in which the period
ends. The crop year in which the effective date falls will
determine the crop year for a Specific Coverage
Endorsement.
Cwt - Hundredweight.
Days - Calendar days unless otherwise specified.
Daily price limit - For a given CME futures contract,
the maximum daily price change allowed by the CME,
either up or down, from the previous settlement price.
The Daily Price Limit is defined as the standard amount
that prices may vary from day to day and does not
include expanded limits.
Deductible - The amount determined by subtracting
the coverage level from 100 percent. For example, if
you elected an 85 percent coverage level, your
deductible would be 15 percent (100% - 85% = 15%).
Delinquent debt - Has the same meaning as the term
defined in 7 CFR part 400, subpart U.
Effective date - The date associated with the
beginning of insurance for a Specific Coverage
Endorsement. This is the date that coverage begins.
The effective date will always be the date the rates
were published on the RMA website. If the Specific
Coverage Endorsement was purchased and we
approved it on the day following the date the rates were
published on the RMA website, the effective date is still
the date that the rates were published on the RMA
website.
End date - The date selected by you, and stated in the
Specific Coverage Endorsement, on which coverage
under a Specific Coverage Endorsement ends.
End month – The calendar month that includes the
end date.
Ending period - The period specified by the Specific
Coverage Endorsement, ending on the end date, over
which the actual ending value is determined.
Expected ending value - The expected value of the
livestock at the end of the insurance period, as
published on the RMA website.
FCIC - The Federal Crop Insurance Corporation, a
wholly owned government corporation within USDA.
Insurance period - The period of time coverage is
provided as specified in section 8.
Insured - The named person(s) shown on the
application approved by us. This term does not extend
to any other person having a share or interest in the
covered livestock.
Insured share - Your percentage of ownership interest
in the covered livestock at the time coverage attaches.
Insured value - The insured value is the total dollar
amount of coverage calculated by multiplying the
number of livestock insured under the Specific
Coverage Endorsement by the target weight (as shown
in the Specific Coverage Endorsement), by the
coverage price (in dollars per cwt.), and by the insured
share.
Lean weight - Lean weight is a measure of animal
carcass weight, presented in cwt. To convert live
weight to lean weight, multiply the live weight by the
factor specified in the Specific Coverage Endorsement.
For example, for hogs, a 2.50 cwt. per head live weight
multiplied by .74 is equal to 1.85 cwt. lean weight.
Limited resource farmer or rancher - Has the same
meaning as the term defined by USDA at
https://lrftool.sc.egov.usda.gov/LRP_Definition.aspx or
successor website.
Live weight - Live weight is a measure of the live
animal's weight, stated in cwt.
Livestock - A species of domestic animals sharing the
same traits or characteristics which are insurable under
a Specific Coverage Endorsement.
Livestock purchase agreement – A legal contract,
entered into before the start of the insurance period, to
purchase a specified number of livestock at a specified
sales price or pricing formula, with a specific delivery or
pick-up date.
Marketable - The covered livestock is considered
marketable if the average actual livestock weight on the
earlier of the date when livestock are sold or the SCE
end date meets or exceeds the minimum allowed target
weight as stated in the Specific Coverage
Endorsement. Livestock that does not meet the
minimum weight may be considered marketable if you
can establish that extraordinary circumstances caused
the livestock to weigh less than the minimum weight,
such as drought causing a lack of feed.
Offset - The act of deducting one amount from another
amount.
Ownership interest - Your insurable interest as an
owner in the covered livestock during the insurance
period.
Person - An individual or an association, corporation,
estate, partnership, trust, or other legal entity, and,
where applicable, a State or a political subdivision or
agency of a State. “Person” does not include the United
States Government or any agency thereof.
Policy - The agreement between you and us consisting
of the application approved by us in writing, these Basic
Provisions, the Specific Coverage Endorsement, the
Special Provisions, other applicable endorsements,
and the actuarial documents for the covered livestock.
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Premium billing date – If applicable, the earliest date
upon which you will be billed for the Specific Coverage
Endorsement. The premium billing date is the first day
of the month following the end date for the Specific
Coverage Endorsement and is contained in the
actuarial documents.
Producer premium - Total premium minus the
premium subsidy paid by FCIC.
RMA – Risk Management Agency, an agency within
USDA.
RMA’s website - A website hosted by RMA and
located at https://www.rma.usda.gov/ or a successor
website.
Sales closing date - The effective date of the Specific
Coverage Endorsement.
Sales period - The period of time that begins when the
coverage price and rates are posted and ends at 9:00
am Central Time the following calendar day or as
otherwise specified in each Specific Coverage
Endorsement. Sales will not be available for purchase
on any sales period that would have an effective date
of a Federal or a market holiday or as otherwise
specified in each Specific Coverage Endorsement.
Sold - Livestock transferred to another person through
a valid bill of sale or auction. Livestock is considered
sold on the date the buyer takes physical possession
of the livestock.
Special provisions - The part of the policy that
contains specific provisions of insurance for each
insured class and may vary by geographic area.
Specific Coverage Endorsement (SCE) - An
endorsement to the policy necessary to provide
coverage that includes information about the class to
be insured.
Substantial beneficial interest - An interest held by
any person of at least 10 percent in the applicant or
insured. A spouse who resides in the household or
households of the applicant or insured will be
considered to have a substantial beneficial interest in
the applicant or insured unless the spouse can prove
that the class covered by the Specific Coverage
Endorsement is in a totally separate farming operation
in accordance with FCIC procedures and the spouse
derives no benefit from the farming operation of the
insured or applicant.
Target weight - The anticipated weight at the end date
as specified in the Specific Coverage Endorsement.
Termination date - The calendar date contained in the
actuarial documents upon which your insurance
ceases to be in effect because of nonpayment of any
amount due us under the policy, including premium if
applicable.
Unborn livestock - Livestock not born on the effective
date but expected to be marketable before the end
date.
Veteran farmer or rancher -
(1) An individual who has served active duty in the
United States Army, Navy, Marine Corps, Air
Force, Space Force, or Coast Guard, including the
reserve components; was discharged or released
under conditions other than dishonorable; and:
(i) Has not operated a farm or ranch;
(ii) Has not operated a farm or ranch for not more
than 5 years; or
(iii) First obtained status as a veteran during the
most recent 5-year period.
(2) A person, other than an individual, may be eligible
for veteran farmer or rancher benefits if all
substantial beneficial interest holders qualify as a
veteran farmer or rancher in accordance with
paragraph (1) of this definition; except in cases in
which there is only a married couple, then a veteran
and non-veteran spouse are considered a veteran
farmer or rancher
USDA - United States Department of Agriculture.
2.
Life of Policy, Cancellation, and Termination
(a) This policy provides coverage to protect you
against price decreases during the insurance
period.
(b) The application must be completed by you and
received by us not later than the sales closing date.
If 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
violation of the controlled substance provisions of
the Food Security Act of 1985, a new application
must be filed.
(c) Coverage will not be provided if you are ineligible
under the policy or under any Federal statute or
regulation.
(d) Unless otherwise limited by section 4 of this policy,
an application for coverage under this policy may
be submitted during the sales period, must be
approved in writing by us before you can purchase
coverage under an SCE, and must contain all the
information required by us to be approved to insure
your livestock.
(e) Your agent does not have authority to bind
coverage under this policy. Once approved by us
in writing, coverage for the class described in the
SCE begins on the effective date.
(f) With respect to your application for coverage under
this policy and or SCE:
(1)
You must include your social security number
(SSN) if you are an individual (if you are an
individual applicant operating as a business,
you may provide an employer identification
number (EIN) but you must also provide your
SSN); or
(2)
You must include your EIN if you are a person
other than an individual;
(3)
In addition to the requirements of section
2(f)(1) or 2(f)(2), you must include the following
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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 a substantial beneficial
interest in you;
(4)
Your application will not be accepted, and no
insurance will be provided 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;
(5)
With respect to persons with a substantial
beneficial interest in you:
(i)
The coverage for all the livestock included
on your SCEs 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)
The coverage for all livestock included on
your SCEs 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(f)(5)(ii)(B)and 2(f)(5)(ii)(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;
(6)
When any of your policies are void under
sections 2(f)(4) or 2(f)(5):
(i)
You must repay any indemnity that may
have been paid for all applicable livestock
and crop years as determined by us;
(ii)
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
(iii)
If you previously paid premium, any
amount in excess of the amount required
in section 2(f)(6)(ii) will be returned to you;
(7)
Notwithstanding any of the provisions in this
section, if you certify to an incorrect SSN or
EIN, or receive an indemnity and the SSN or
EIN was not correct, you may be subject to
civil, criminal or administrative sanctions;
(8)
If any of the information regarding persons with
a substantial beneficial interest in you changes
after the cancellation date for the previous crop
year, you must revise your application by the
cancellation date for the current crop year to
reflect the correct information. However, if
such information changed less than 30 days
before the cancellation date for the current
crop year, you must revise your application by
the cancellation date for the next crop year. If
you fail to provide the required revisions, the
provisions in section 2(f)(5) will apply; and
(9)
If you are, or a person with a substantial
beneficial interest in you is, not eligible to
obtain a SSN or EIN, whichever is required,
you must request an assigned number for the
purposes of this policy from us:
(i)
A number will be provided only if you can
demonstrate you are, or a person with a
substantial beneficial interest in you is,
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eligible to receive Federal benefits;
(ii)
If a number cannot be provided for you in
accordance with section 2(f)(9)(i), your
application will not be accepted; or
(iii)
If a number cannot be provided for any
person with a substantial beneficial
interest in you in accordance with section
2(f)(9)(i), the amount of coverage for all
crops on the application will be reduced
proportionately by the percentage interest
of such person in you.
(g) Either you or we may cancel this policy after the
initial crop year by providing written notice to the
other on or before June 30. Cancellation during a
crop year is not allowed.
(h) Any amount owed to us for any policy authorized
under the Act will be offset from any indemnity or
prevented planting 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 on or before the
termination date for you to remain eligible for
insurance.
(2)
If we offset any amount due us from an
indemnity or prevented planting payment owed
to you, the date of payment for the purpose of
determining whether you have a delinquent
debt will be the date that you submit the claim
for indemnity in accordance with section 9.
(Indemnity Payments for Losses.).
(3)
For this agricultural commodity policy and any
other agricultural commodity policy insured
with us and it is:
(i)
Prior to the premium billing date or for any
endorsement that has not ended, you may
request your premium and administrative
fees to be offset from any indemnity or
prevented planting payment due you; or
(ii)
On or after the premium billing date or for
any endorsement that has ended, your
premium and administrative fees will be
offset from any indemnity or prevented
planting payment due you.
(i) 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(i)(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(i)(2) for
the crop for which you failed to pay
premium, or any related interest owed,
as applicable;
(B)
The payment due date contained in
any notification of indebtedness for
any overpaid indemnity if you fail to
pay the amount owed, including any
related interest owed, as applicable,
by such due date; or
(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;
(ii)
If you are ineligible and a policy has been
terminated in accordance with section
2(i)(2), you will not receive any indemnity
for any SCEs in effect for the current crop
year and such ineligibility and termination
of the policy may affect your eligibility for
benefits under other USDA programs. Any
indemnity payment 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(h), unless
your policy was terminated in accordance
with sections 2(i)(2)(i)(A), 2(i)(2)(i)(B), or
2(i)(2)(i)(D).
(2)
With respect to termination:
(i)
Termination will be effective on:
(A)
For a policy with unpaid premiums, the
termination date for the crop year (For
SCEs for which the sales closing dates
and insurance attachment occur prior
to the termination date, such SCEs will
terminate for the current crop year
even though insurance attached prior
to the termination date. Such
termination will be considered
effective as of July 1 of the current
crop year and no insurance will be
considered to have attached for any
SCEs for the crop year and no
indemnity will be owed. For example,
in the crop year 2023, you purchase an
SCE on July 15, 2022, and you fail to
pay all premium due for the crop year
2022 by the termination date for crop
year 2022. Your 2023 policy will
terminate on July 1, 2022, and no
premium or indemnity will be owed for
the SCE purchased on July 15, 2022);
(B)
For a policy with other amounts due
us, the termination date immediately
following the date such payment is
owed (For SCEs for which the sales
closing dates are prior to the
termination date, such SCEs will
terminate for the current crop year
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even if insurance attached prior to the
termination date. Such termination will
be considered effective as of July 1
subsequent to the prior crop year’s
cancellation date and no insurance will
be considered to have attached for the
current crop year and no indemnity will
be owed. For example, you owe
reimbursement of an overpaid
indemnity on an SCE, with payment
due on December 15, 2022, and you
fail to make the payment. Your policy
is terminated as of the next termination
date, August 31, 2023. If you have
purchased an SCE on or after July 1,
2023, those SCEs are terminated
effective on July 1, 2023);
(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., you
enter a payment agreement for the
2021 crop year premium and you fail
to make a payment on April 15, 2022,
your policy will terminate effective on
July 1, 2020, effectively terminating
the 2021 and 2022 crop year policies);
or
(ii)
For all policies terminated under sections
2(i)(2)(i)(A), 2(i)(2)(i)(B), or 2(i)(2)(i)(D),
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:
(A)
The termination was in error;
(B)
The Administrator of the Risk
Management Agency, at his or her
sole discretion, determines that the
following are met:
(1) In accordance with 7 CFR part
400,
subpart U, and FCIC
issued
procedures, you provide
documentation that your
inadvertent failure to pay your debt
is due to an unforeseen or
unavoidable event or other
extenuating circumstances that
created the inadvertent failure for
you to make timely payment;
(2) You remit full payment of the
delinquent debt owed to us or
FCIC with your request submitted
in accordance with section
2(i)(2)(iii)(B)(3); and
(3) You submit a written request for
reinstatement of your policy to us
no later than 60 days after the
termination date or the missed
payment date of a previously
executed written payment
agreement, or in the case of
overpaid indemnity or any amount
that became due after the
termination date, the due date
specified in the notice to you of the
amount due, if applicable
.
(i) If authorization for
reinstatement, as defined in 7
CFR part 400, subpart U, is
granted, your policies will be
reinstated effective at the
beginning of the crop year for
which you were determined
ineligible, and you will be
entitled to all applicable
benefits under such policies,
provided you meet all
eligibility requirements and
comply with the terms of the
policy; and
(ii) There is no evidence of fraud
or misrepresentation; or
(C)
We determine that, in accordance with
7 CFR part 400, subpart U, and FCIC
procedures, the following are met:
(1) You can demonstrate:
(i) You made timely payment for
the amount of premium owed
but you inadvertently omitted
some small amount, such as
the most recent month’s
interest or a small
administrative fee;
(ii) The amount of the payment
was clearly transposed from
the amount that was
otherwise due (For example,
you owed $892 but you paid
$829);
(iii) You timely made the full
payment of the amount owed
23-LRP-BASIC
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but the delivery of that
payment was delayed, and
was postmarked no more than
seven calendar days after the
termination date or the missed
payment date of a previously
executed written payment
agreement, or in the case of
overpaid indemnity or any
amount that became due after
the termination date, the due
date specified in a notice to
you of an amount due, as
applicable.
(iv) For previously executed
written payment agreements,
you made the full payment of
the scheduled payment
amount owed within 15
calendar days after the
missed payment date.
(2) You remit full payment of the
delinquent debt owed to us; and
(3) You submit a written request for
reinstatement of your policy to us
in accordance with 7 CFR part
400, subpart U, and applicable
procedures no later than 30 days
after the termination date or the
missed payment date of a
previously executed written
payment agreement, or in the
case of overpaid indemnity or any
amount that became due after the
termination date, the due date
specified in the notice to you of the
amount due, if applicable; and
(4) If authorization for reinstatement,
as defined in 7 CFR part 400,
subpart U, is granted, your policies
will be reinstated effective at the
beginning of the crop year for
which you were determined
ineligible, and you will be entitled
to all applicable benefits under
such policies, provided you meet
all eligibility requirements and
comply with the terms of the
policy; and
(5) There is no evidence of fraud or
misrepresentation.
(iv)
A determination made under:
(A)
Section 2(i)(2)(iii)(B) may only be
appe
aled to the National Appeals
Division in accordance with 7 CFR part
11; and
(B)
Section 2(i)(2)(iii)(C) may only be
appealed in accordance with section
11.
(3)
To regain eligibility, you must:
(i)
Repay the delinquent debt in full;
(ii)
Execute a written payment agreement, in
accordance with 7 CFR part 400, subpart
U, and make payments in accordance with
the agreement; or
(iii)
Have your debts discharged in bankruptcy.
(4)
After you become eligible for crop or livestock
insurance, if you want to obtain coverage for
your crops or livestock, you must submit a new
application but such application will not be
effective until the beginning of the next crop
year.
(5)
For example, for the 2023 crop year, if you
purchase a Livestock Risk Protection Policy
with a termination date of August 31, 2024, a
nd
y
ou do not pay the premium or other amounts
due by the termination date, your livestock
policy will terminate for the current 2025 crop
year retroactive to July 1 start of the 2025 crop
year, even if insurance has already attached to
the 2025 current crop year. The effective dat
e
of
ineligibility would be August 31, 2024. In
accordance with section 2(i)(2)(i)(C), for any
other policy issued under the authority of the
Federal Crop Insurance Act that does not have
the same termination date of August 31, the
termination for such other policy will be
effective on the termination date following
when a policyholder becomes ineligible. If
a
pr
oducer purchased a 2023 crop year
Livestock Risk Protection SCE on July 5, 2022,
and did not pay the premium by the termination
date of August 31, 2023, and the producer
purchased a Federally reinsured corn policy on
March 15, 2023. The Livestock Risk Protection
Policy is terminated August 31, 2023, effective
on July 1, 2023, and the producer is ineligible
for Livestock Risk Protection as of July 1 of the
current 2024 crop year. However, the
Federally reinsured corn policy would remain
in effect for 2023 and would be terminated as
of March 15, 2024, if the Livestock Risk
Protection premium remained delinquent. No
indemnity will be due for the 2024 crop year
corn policy. The insured will not be eligible to
apply for crop insurance for any crop until after
the amounts owed are paid in full or the
producer files a petition to discharge the debt
in bankruptcy.
(6)
If you are determined to be ineligible under
section 2(i), persons with a substantial
beneficial interest in you may also be ineligible
until you become eligible again.
(j) In cases where there has been a death,
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disappearance, judicially declared incompetence,
or dissolution of any insured person:
(1)
If any married individual insured dies,
disappears, or is judicially declared
incompetent, the named 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 named insured; and
(ii)
The spouse has a share of the crop.
(2)
The provisions in section 2(j)(3) will 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 left to
the spouse and the criteria in section
2(j)(1) are not met, dies, disappears, or is
judicially declared incompetent.
(3)
If section 2(j)(2) applies and 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 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 prior to 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
and such person or persons must
comply with all policy provisions and
pay 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 prior to the sales closing
date; and
(B)
Any indemnity will be paid to the
person or persons determined to be
beneficially entitled to the payment
and such person or persons must
comply with all policy provisions and
pay the premium.
(5)
If section 2(j)(2) or 2(j)(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 not later than the
next cancellation date, except if section
2(j)(3)(ii) applies, notice must be provided by
the cancellation date for the next crop year. If
notice is not provided timely, the provisions of
section 2(j)(2) or 2(j)(4) will apply retroactive to
the date such notice should have been
provided and any payments made after the
date the policy should have been canceled
must be returned.
(k) This Livestock Risk Protection policy is a
continuous policy. If you submit and we approve an
application for coverage under the Livestock Risk
Protection policy on our form, such policy will
remain in effect until June 30 and will automatically
renew on July 1 thereafter unless canceled or
terminated pursuant to the terms of this policy. The
SCE’s are not continuous and are only effective for
the period stated therein.
(l) We may cancel your policy if no premium is earned
for three consecutive years.
(m) The cancellation for the policy is June 30 and the
termination date for the policy is August 31 of the
year following the cancellation date as stated in the
actuarial documents. For example, a policy with the
cancellation date of June 30, 2023, would have the
termination date of August 31, 2024.
(n) Any person may sign any document relative to
Federal 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 any
applicable consequences, if any information has
23-LRP-BASIC
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been misreported.
3.
Contract Changes.
(a) We may change the terms of your coverage under
this policy from crop year to crop year.
(b) Any changes in policy provisions and program
dates will be published on RMA’s website not later
than the contract change date. We may only revise
this information after the contract change date to
correct clear errors.
(c) You will be notified, in writing, of changes to the
Basic Provisions, SCEs, and the Special
Provisions not later than 30 days prior to the
cancellation date. Acceptance of changes will be
conclusively presumed in the absence of written
notice from you to change or cancel your insurance
coverage.
(d) After the contract change date, all changes
specified in the section 3(b) will also be available
upon request from your crop insurance agent.
(e) The contract change date is April 30 preceding the
cancellation date.
4.
Coverage Limitations.
(a) This policy does not cover any other peril except
change in price, including, for example, mortality,
condemnation, physical damage, disease,
individual marketing decisions, local price
aberrations, or any other cause of loss other than
stated.
(b) Insurance coverage will not be provided if you are
ineligible under the contract or under any Federal
statute or regulation.
(c) We will not approve your application or any SCE:
(1)
Unless such application or SCE is accepted by
RMA;
(2)
If the premium calculator (the computer
program that determines your premium) or the
RMA website is not operational;
(3)
If the required data for establishing rates or
coverage prices are not available because
futures did not trade, there was insufficient
trading volume, futures were not able to
continue trading at the end of the day (if the
price moved the maximum allowed by the
exchange), required data were not reported, or
the rates or coverage prices were not timely
provided to RMA; or
(4)
If there has been a news report,
announcement, or other event that occurs
during or after trading hours that is believed by
the Secretary of Agriculture, Manager of the
Risk Management Agency, or other
designated staff of the Risk Management
Agency, to result in market conditions
significantly different than those used to rate
the Livestock Risk Protection program.
(d) Coverage is not available under a SCE if the cause
of the change in price is anything other than the
unavoidable cause of loss, as specified in the Act.
(e) Sales of all SCEs of a given class of livestock will
be suspended for future sales periods if, based on
CME market settlement information, at least four
(4) of the relevant CME futures contracts have a
daily price change equal or exceeding the Daily
Price Limit for two (2) consecutive days. LRP sales
will resume if and when there have been two (2)
consecutive days without there being four (4) or
more of the relevant CME futures contracts
equaling or exceeding the Daily Price Limit. The
relevant CME futures contract for each class of
livestock is provided in the Special Provisions.
(f) Once published by RMA, coverage prices and
premium rates will not be changed as a result of
any late revisions made by the publishers of the
data.
(g) You may not have any other FCIC reinsured
livestock policy covering the same class of
livestock with the same end month or have any
other FCIC reinsured livestock policy insuring the
same covered livestock at the same time. For
example, an insured owns and intends to market
1,000 head of fed cattle. The insured covers 600
head on an SCE with the end month of October
2023. The insured may not declare any target
marketings on LGM-Cattle for October 2023, and
may only declare as target marketings in any other
month the 400 head not already covered on LRP
until that LRP SCE ends.
(1)
If you do and if the duplication was intentional,
you may be subject to the sanctions authorized
under this policy, the Act, 7 CFR part 400,
subpart R, or any other applicable statute.
(2)
If we determine that such duplication was not
intentional, the first coverage issued will
continue in force and all duplicate coverage will
be voided.
(h) The maximum number of livestock that can be
insured during a crop year is stated in the SCE.
5.
Premium.
(a) Coverage attaches on the effective date shown on
the SCE.
(b) The premium is earned and payable at the time
coverage attaches and you will be billed for the
premium on the billing date specified in the
actuarial documents.
(c) Premium will be based on the information you
provide in a SCE.
(d) If you qualify as a beginning farmer or rancher; or
veteran farmer or rancher, your premium subsidy
will be 10 percentage points greater than the
premium subsidy that you would otherwise receive,
unless otherwise specified in the Special
Provisions;
(e) You will be ineligible for any premium subsidy paid
on your behalf by FCIC for any policy issued by us
23-LRP-BASIC
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if:
(1)
USDA determines you have committed a
violation of the highly erodible land
conservation or wetland conservation
provisions of 7 CFR part 12 as amended by the
Agricultural Act of 2014; or
(2)
You have not filed form AD-1026 with FSA for
the reinsurance year by the premium billing
date.
(i)
Notwithstanding section 5(e)(2), you may
be eligible for premium subsidy without
having a timely filed form AD-1026: AD–
1026 on file with FSA.
(A)
For the initial reinsurance year if you
certify by the premium billing date for
your policy that you meet the
qualifications as outlined in FCIC
approved procedures for producers
who are new to farming, new to crop
insurance, a new entity, or have not
previously been required to file form
AD-1026; or
(B)
If FSA approves relief for failure to
timely file due to circumstances
beyond your control or failure to timely
provide adequate information to
complete form AD-1026 in accordance
with the provisions contained in 7 CFR
part 12.
(ii)
To be eligible for premium subsidy paid on
your behalf by FCIC, it is your
responsibility to assure you meet all the
requirements for:
(A)
Compliance with the conservation
provisions specified in section 5(e)(1)
of this section; and
(B)
Filing form AD-1026 to be properly
identified as in compliance with the
conservation provisions specified in
section 5(e)(1) of this section.
(f) Premium owed by you will be offset from an
indemnity or prevented planting payment due you
in accordance with section 2(h)
6.
Covered Livestock
(a) This policy only covers livestock in which you have
an ownership interest during the insurance period
under the applicable SCE and which are
marketable by the end date.
(1)
Such ownership interest may include:
(i)
Livestock owned and raised by you.
(ii)
Unborn livestock, provided that you have:
(A)
An ownership interest in pregnant
cows or sows to which unborn
livestock will be born;
(B)
For swine only: you or holders of a
substantial beneficial interest in you
have an ownership interest in the
entity that owns pregnant sows. You
may insure the number of unborn
swine in proportion to ownership in the
pregnant sows. For example, if a
substantial beneficial holder in you has
a 20 percent ownership in a sow
breeding entity, then you can insure up
to 20 percent of the unborn swine
produced by the sow breeding entity.
(2)
To receive an indemnity, you must provide:
(i)
Documents verifying ownership of your
share of the livestock insured under the
SCE in accordance with section 12(c); or
(ii)
Documents verifying the sale of all covered
livestock during the insurance period, that
show:
(A)
You as a seller;
(B)
The purchaser;
(C)
The date sold;
(D)
The weight of the livestock sold.
(iii)
For covered livestock not sold by the end
date, in addition to 6(a)(2)(i), a certified
statement signed by you attesting that the
covered livestock was not sold prior to the
end date, and the covered livestock was
marketable at the end date.
(iv)
When ownership interest in unborn swine
is claimed under section 6(a)(1)(ii)(B) you
must also provide documentation
establishing:
(A)
Your ownership interest, or the
ownership interest of the person with a
substantial interest in you, in the sow
breeding entity;
(B)
The percentage of ownership interest
in the sow breeding entity.
(C)
The number of sows and offspring
produced and sold annually from the
sow breeding entity; and
(D)
Livestock purchase agreement with
delivery or pickup date within the
insurance period.
(3)
If you dispose of or sell your covered livestock
more than 60 days prior to the SCE end date,
you will not be considered to have an
ownership interest in the disposed of or sold
livestock.
(b) To obtain coverage on a specific class of livestock,
you must submit an SCE during the sales period
that identifies the class, the effective date of
coverage, the state and county, the number of
covered livestock, the target weight at the end
date, the coverage price, your insured share and
your signature. Any SCE submitted without these
elements or submitted outside of the sales period
will not be accepted.
(c) During each crop year where a policy is in effect,
you may obtain coverage for as many head of
livestock, under as many different SCEs, as you
are eligible for, subject to the following restrictions:
23-LRP-BASIC
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(1)
You may not insure the same class of livestock
with the same end date under more than one
SCE during the same sales period.
(2)
You may not insure the same covered livestock
under more than one SCE simultaneously. For
example, an insured owns 1,000 head of
feeder cattle, and has covered all 1,000 head
as Steers Weight 1. Until the SCE on which
these head are covered has ended, the insured
may not cover the same 1,000 head again as
Steers Weight 1 with the same end month
(e.g., if available coverage price has
increased), as Steers Weight 2 with a later end
month, or as Fed Cattle with a later end month.
Once your original Steers Weight 1 SCE ends,
if you have retained some or all of the original
1,000 head, you may then choose to purchase
a new endorsement to cover the cattle at a new
weight with a new end month.
(3)
You may not have any other FCIC reinsured
livestock policy insuring the same class of
livestock with the same end month.
(4)
You may not have any other FCIC reinsured
livestock policy insuring the same covered
livestock at the same time.
(d) The number of covered livestock insured under an
SCE will be adjusted if:
(1)
You dispose of your share or sell the covered
livestock more than 60 days prior to the end
date, unless that portion of your share is
properly transferred, on our form, to an eligible
transferee under section 17.
(2)
At any time during the insurance period your
covered livestock are seized, quarantined or
destroyed by order of any governmental
authority, or your livestock are not deliverable
due to death or disease and you have not
provided us written notice of such
circumstance within 72 hours after your
knowledge of the livestock’s death. For
covered unborn feeder cattle or unborn swine:
(i)
Written notice of death needs to include
either evidence of pregnancy, or records of
number of born livestock in one of the prior
three years.
(ii)
If records for prior years are used in place
of evidence of pregnancy, then the number
of livestock born in a previous year must
be greater than or equal to the number of
insured unborn livestock.
(iii)
Valid records include, but are not limited
to, veterinary reports, or supply or sales
contracts.
(3)
You fail to provide ownership records for any
covered livestock as required in section
6(a)(2).
(4)
The total weight of the covered livestock at the
end date is less than the number of covered
livestock multiplied by the minimum allowed
target weight, unless you can establish that
extraordinary circumstances caused the
livestock to weigh less than the minimum
allowed target weight, such as drought causing
a lack of feed.
(e) If any conditions in 6(d) occur:
(1)
The number of covered livestock insured under
an SCE will be reduced by the number of
livestock no longer insured due to early
disposal, lack of records, or other reasons in
6(d).
(2)
No indemnity will be paid for any livestock no
longer insured under the SCE.
(3)
Because no indemnity is due because of a
breach of this policy, you will still be
responsible to pay for the full premium owed in
accordance with section 5.
(f) In accordance with section 24, you may not have
any other FCIC reinsured livestock policy covering
the same class of livestock with the same end
month.
(1)
If you do, and we determine the duplication is
intentional, you may be subject to the
sanctions authorized under this policy, the Act,
7 CFR Part 400, subpart R, or any other
applicable statute.
(2)
If we determine that such duplication was not
intentional, the first coverage issued will
continue in force and all duplicate coverage will
be voided.
7.
Share Insured.
(a) Only an insured share as an owner of the livestock
will be eligible for insurance under this policy.
(1)
Insured shares as a landlord, tenant, operator,
or any other interest other than as an owner
are not eligible for insurance under this policy.
(2)
Insurance will apply only to the insured share
owned by the person completing the
application. Insurance will not extend to any
other person having a share in the livestock or
livestock product unless the application clearly
states that the insurance is requested for an
entity such as a partnership or a joint venture.
(3)
If you transfer any part of your insured share
during the insurance period to an eligible
person, coverage will transfer in accordance
with section 17.
(b) We may consider any share reported by or for your
spouse, child or any member of your household to
be included in your share if there is no evidence
that they had a separate interest in the livestock.
This does not abrogate the requirement in section
2 that all spouses provide their social security
numbers as a substantial beneficial interest holder
in the applicant or insured.
8.
Insurance Period.
The insurance period is the period of coverage that:
(a) Begins on the covered livestock on the effective
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date for each SCE.
(b) Ends on the covered livestock on the end date
stated on each SCE.
9.
Indemnity Payments for Losses.
(a) The calculation for indemnity payments is found in
the SCE.
(b) In order to receive an indemnity, you must submit
a claim to us on our form within sixty (60) days from
the date we provide you with the claim form.
(c) The indemnity payment shall be made within thirty
(30) days following receipt by us of the properly
executed claim form.
(d) If the end date is on a Saturday, Sunday, or Federal
holiday, or, if for any reason the relevant report is
not available to us for that day or any other day of
the ending period, then the actual ending value will
be based on the most recent reports made prior to
that date.
10.
Agricultural Commodities as Payment.
We will not accept any livestock or other agricultural
commodity as compensation for payments due.
11.
Mediation, Arbitration, Appeal, Reconsideration,
and Administrative and Judicial Review.
(a) If you do not agree with any determination made by
us, the disagreement may be resolved through
mediation in accordance with section 11(f) If the
disagreement cannot be resolved through
mediation, or you and we do not agree to
mediation, you must timely seek resolution through
arbitration in accordance with the rules of the
American Arbitration Association (AAA), except as
provided in sections 11(c) and 11(e), and unless
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.
(1)
All disputes involving determinations made by
us are subject to mediation or arbitration.
However, 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 procedure
may be appealed to the National Appeals
Division in accordance with 7 CFR part 11.
(2)
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. The statement must also include any
amounts awarded for interest.
(i)
Failure of the arbitrator to provide such
written statement will result in the
nullification of all determinations of the
arbitrator.
(ii)
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.
(b) Regardless of whether mediation is elected:
(1)
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;
(2)
If you fail to initiate arbitration in accordance
with section 11(b)(1) and complete the
process, you will not be able to resolve the
dispute through judicial review;
(3)
If arbitration has been initiated in accordance
with section 11(b)(1) 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
(4)
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.
(c) Any decision rendered in arbitration is binding on
you and us unless judicial review is sought in
accordance with section 11(b)(3). Notwithstanding
any provision in the rules of the AAA, you and we
have the right to judicial review of any decision
rendered in arbitration.
(d) If you disagree with any determination made by
FCIC or any claim where FCIC is directly involved
in the claims process or directs us in the resolution
of the claim, you may obtain an administrative
review in accordance with 7 CFR part 400, subpart
J (administrative review) or appeal in accordance
with 7 CFR part 11 (appeal).
(1)
If you elect to bring suit after completion of any
appeal, such suit must be filed against FCIC
not later than one year after the date of the
decision rendered in such appeal.
23-LRP-BASIC
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(2)
Such suit must be brought in the United States
district court for the district in which the
covered livestock is located.
(3)
Under no circumstances can you recover any
attorney fees or other expenses, or any
punitive, compensatory or any other damages
from FCIC.
(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 21. If there are conflicts between any rules
of the AAA and the provisions of your policy, the
provisions of your policy will control.
(f) To resolve any dispute through mediation, you and
we must both:
(1)
Agree to mediate the dispute;
(2)
Agree on a mediator; and
(3)
Be present or have a designated
representative who has authority to settle the
case present, at the mediation.
(g) Except as provided in section 11(h), 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 15.
(h) In a judicial review only, you may recover
attorney’s 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 of
Compliance/ Stop 0806, 1400 Independence
Avenue, SW., Washington, D.C. 20250-0806.
(i) If FCIC elects to participate in the adjustment of
your claim, or modifies, revises or corrects your
claim, prior to payment, you may not bring an
arbitration, mediation or litigation action against us.
You must request administrative review or appeal
in accordance with section 11(d).
(j) Any determination made by FCIC that is a matter
of general applicability is not subject to
administrative review under 7 CFR part 400,
subpart J or appeal under 7 CFR part 11. 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.
12.
Access to Covered Livestock and Records, and
Record Retention.
(a) We, any person designated by us, and any
employee designated by a USDA agency, reserve
the right to perform random, on-site inspections to
verify insured share or disposition of the covered
livestock. Inspections will be conducted in
accordance with generally accepted herd health
practices.
(b) For three years after the end date of any SCE, you
must retain, and provide upon our request, or the
request of any person designated by us or any
employee designated by a USDA agency,
complete records of the ownership of your share
and disposition of all the livestock that were insured
for the applicable period. We may extend the
record retention period beyond three years by
notifying you of such extension in writing. Your
failure to keep and maintain such records will result
in a denial of an indemnity under the SCE. Because
no indemnity is due as a result of a breach of this
policy, all premiums will still be owed.
(c) Documents deemed sufficient to support
verification of ownership include, but are not limited
to: livestock purchase agreements, bills of sale;
financing and credit documents secured by the
covered livestock; or certified written statements
from third parties such as feed suppliers or
veterinarians who have visited the farm or ranch,
who visually identified the livestock listed on the
SCE and can attest to your ownership of the
identified livestock. If livestock purchase
agreements are provided to verify ownership, they
must have a date of delivery or pickup before the
start of the insurance period, other than for
livestock described in section 6(a)(1)(ii)(B).
(d) Records of any mediation, arbitration, or litigation
involving the covered livestock must be made
available to us, any person designated by us, or
any employee designated by a USDA agency.
(e) Our representative and any employee designated
by a USDA agency, will, at any time during the
record retention period, have access to:
(1)
Any records relating to this insurance at any
location where such records may be found or
maintained; and
(2)
The farm, ranch, feedlot or any other facility
related to the production of livestock.
(f) By applying for insurance under the authority of the
Act or by continuing insurance for which you
previously applied, you authorize us, any employee
designated by a USDA agency, or any person
acting for us, to obtain records relating to the
insured livestock or livestock product from any
23-LRP-BASIC
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person who may have custody of those records
including, but not limited to, banks and other
lenders, feedlots, cooperatives, marketing
associations, suppliers, and accountants. You
must assist us in obtaining all records, which we
request from third parties.
13.
Conformity to Food Security Act of 1985.
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. Your insurance
policy will be canceled if you are determined, by the
appropriate Agency, to be in violation of these
provisions. 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.
14.
Amounts Due Us.
(a) Interest will accrue at the rate of 1.25 percent
simple interest per calendar month, on any amount
due us. Interest will start to accrue on the date that
notice is issued to you for the collection of the
amount due.
(1)
For the purpose of premium amounts owed to
us, interest will start to accrue on the first day
of the month following the issuance of the
notice by us, provided that a minimum of 30
days have passed from the premium billing
date specified in the actuarial documents.
(2)
We will collect any unpaid amounts owed to us
and any interest owed thereon.
(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 the
share of the overpaid indemnities and premiums
retained by FCIC plus any interest owed thereon.
15.
Payment and 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 date you sign, date, and
submit to us the properly completed claim on our form.
Interest will be paid only if the reason for our failure to
timely pay is NOT due to your failure to provide a
properly completed claim form to us. 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.
16.
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, including all SCEs, will be voided
for each crop year in which the concealment,
fraud, or misrepresentation occurred; and
(2)
You may be subject to remedial sanctions in
accordance with 7 U.S.C. 1515(h) and 7 C.F.R.
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. Even though the policy is void, you may
still be required to pay the administrative and
operating expenses of the approved insurance
provider contained on your premium billing
statement percent of the premium due under the
policy to offset costs incurred by us in the service
of this policy. If previously paid, the balance of the
premium will be refunded
.
(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
SCE 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
23-LRP-BASIC
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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 FCIC; or
(ii)
$10,000; and
(2)
A disqualification for a period of up to 5 years
from receiving any monetary or non-monetary
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 an agricultural commodity
affected by a crop loss or a decline in the
prices of agricultural commodities.
17.
Transfer of Coverage and Right to Indemnity.
(a) If you transfer any part of your insured share during
the period of insurance, you may transfer your
coverage rights if the transferee is eligible for
livestock insurance.
(b) We will not be liable for any more than the liability
determined in accordance with your policy that
existed before the transfer occurred.
(c) The transfer of coverage rights must be on our form
and will not be effective until approved by us in
writing.
(d) The transferee shall have all rights and
responsibilities under this policy consistent with the
transferee’s interest.
(e) If the transferee is not eligible for livestock
insurance for any reason, and the transfer occurs
before the final 30 days of the insurance period, or
if you fail to inform us of a transfer by the end date
or within 30 days of the transfer whichever is later,
then the transferred portion of the coverage will be
terminated and no premium for that portion will be
refunded.
18.
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
loss notices and forms as required by the
policy.
(e) If you have suffered a loss from an insurable cause
and fail to file a claim for indemnity within the
period specified in section 9(b), the assignee may
submit the claim for indemnity not later than 15
days after the period for filing a claim has expired.
We will honor the terms of the assignment only if
we can accurately determine the amount of the
claim. However, no action will lie against us for
failure to do so.
19.
Descriptive Headings.
The descriptive headings of the various policy
provisions are for convenience only and are not
intended to affect the construction or meaning of any of
the policy provisions.
20.
Notices.
(a) All notices required to be given by you must be in
writing and received by your insurance agent within
the designated time unless otherwise provided by
the notice requirement. Notices required to be
given immediately may be by facsimile, electronic
mail, or delivered in person. Time of the notice will
be determined by the time of our receipt of the
written notice. If the date by which you are required
to submit a report or notice falls on Saturday,
23-LRP-BASIC
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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.
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, these
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.
22.
Multiple Government Benefits
If you are eligible to receive an indemnity under this
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
insurance contract or by law.
23.
Correction of Errors
(a) In addition to any other corrections allowed in your
policy subject to section 24(b), we may correct:
(1)
Within 60 days after the sales closing date, any
incorrect information on your application or
SCE or provided by the sales closing date,
including identification numbers for you and
any person with a substantial beneficial
interest in you, to ensure that the eligibility
information is correct and consistent with
information reported by you to any USDA
agency;
(2)
Within 30 days of any subsequent correction of
data by FSA, erroneous information corrected
as a result of verification of information; and
(3)
At any time, any incorrect information caused
by electronic transmission errors by us or
errors made by any agency within USDA in
transmitting the information provided by you for
purposes of other USDA programs.
(b) Corrections may be made but will not take effect for
the current crop year if the correction would allow
you to:
(1)
Avoid ineligibility requirements for insurance or
obtain a disproportionate benefit under the
crop insurance program or any related
program administered by the Secretary of
Agriculture;
(2)
Obtain, enhance, or increase an insurance
guarantee or indemnity if a cause of loss exists
or has occurred before any correction has
been made, or avoid premium owed if no loss
is likely to occur; or
(3)
Avoid an obligation or requirement under any
Federal or State law.
24.
Other Insurance.
Nothing in this section prevents you from obtaining
other insurance not authorized under the Act. Unless
specifically authorized by policy provisions, you must
not have any other livestock insurance issued under
the authority of the Act on the same class of livestock
with the same end month or same covered livestock. If
you cannot demonstrate that you did not intend to have
more than one policy or endorsement in effect, you may
be subject to the consequences authorized under this
policy, the Act, or any other applicable statute. 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 livestock canceled would demonstrate you did not
intend to have duplicate policies), and:
(a) Both are for LRP 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:
(1)
The same insurance provider and the
insurance provider agrees otherwise; or
(2)
Different insurance providers and both
insurance providers agree otherwise.
(b) One policy is a Livestock Risk Protection and the
other is a livestock policy insuring the same
covered livestock, or same class of livestock for the
same end month, the policy with the earliest date
of endorsement for the insurance period will be in
force and the other endorsement will be void.
