[Code of Federal Regulations]
[Title 7, Volume 6]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR407.6]

[Page 76]
 
                          TITLE 7--AGRICULTURE
 
     CHAPTER IV--FEDERAL CROP INSURANCE CORPORATION, DEPARTMENT OF 
                               AGRICULTURE
 
PART 407--GROUP RISK PLAN OF INSURANCE REGULATIONS FOR THE 2001 AND SUCCEEDING CROP YEARS--Table of Contents
 
Sec. 407.6  Good faith reliance on misrepresentation.

    (a) Notwithstanding any other provision of the crop insurance 
contract, an insured shall be granted relief to the extent of the 
insured's detrimental reliance or the extent of the policy benefits, 
whichever is less, under the following conditions:
    (1) The person has entered into a contract of crop insurance under 
this part;
    (2) A representative of FCIC made a misrepresentation or other 
erroneous action or advice;
    (3) Such error concerned provisions of the insurance contract not 
contained in the Group Risk Plan of Insurance Basic Provisions, the Crop 
Provisions, the Federal Crop Insurance Act, or the regulations contained 
in this chapter;
    (4) As a result of the error, the insured:
    (i) Is indebted for additional premiums; or
    (ii) Has suffered a loss to a crop which is not insured or for which 
the person is not entitled to an indemnity because of failure to comply 
with the terms of the insurance contract, but which the person believed 
to be insured, or believed the terms of the insurance contract to have 
been complied with or waived; and
    (5) The Manager finds that:
    (i) A representative of FCIC made such misrepresentation or took 
other erroneous action or gave erroneous advice;
    (ii) The person reasonably and in good faith relied on such 
misrepresentation, erroneous action or advice to the person's detriment; 
and
    (iii) To require the payment of the additional premiums or to deny 
such person's entitlement to the indemnity would not be fair and 
equitable.
    (b) For FCIC Policies only, requests for relief under this section 
must be submitted to FCIC in writing. FCIC's reviewing officers must 
refer such application for relief to the Manager of FCIC for 
determination as to whether to grant relief. FCIC's reviewing officers 
do not have authority to grant relief under this section.
    (c) For Reinsured Policies only, requests for relief under this 
section must be submitted to the reinsured company in writing. The 
reinsured companies shall use arbitration, in accordance with the rules 
of the American Arbitration Association, under contracts for insurance 
issued by them under the Act to grant relief under the same terms and 
conditions as contained in this section or may establish procedures to 
administratively handle relief in accordance with this section. Granting 
relief under this section does not absolve the reinsured company from 
liability to FCIC for unauthorized acts of its agents.