Section 7CFR407.9

[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: 7CFR407.9]

[Page 77-85]

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. 407.9 Group risk plan common policy.

The provisions of the Group Risk Plan Common Policy for the 2001 and
succeeding crop years are as follows:

[FCIC policies]

Department of Agriculture

Federal Crop Insurance Corporation

Group Risk Plan Common Policy

[Reinsured policies]
(Appropriate title for insurance provider)
(This is a continuous policy. Refer to Section 18.)

[FCIC policies]
This insurance policy establishes a risk management program
developed by the Federal Crop Insurance Corporation (FCIC), an agency of
the United States Government, under the authority of the Federal Crop
Insurance Act (Act), as amended (7 U.S.C. 1501 et seq.). All terms of
the policy and rights and responsibilities of the parties hereto are
subject to the Act and all regulations under the Act published in 7 CFR
chapter IV. The provisions of this policy may not be waived or varied in
any way by the crop insurance representative, or any other
representative or employee of FCIC, the Risk Management Agency (RMA) or
the Farm Service Agency (FSA). In the event that the company cannot pay
a loss, the claim will be settled in accordance with the provisions of
the policy and paid by FCIC. No state guarantee fund will be liable to
pay the loss.
Throughout this policy, ``you'' and ``your'' refer to the person
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer
to the Federal Crop Insurance Corporation. Unless the context indicates
otherwise, the use of the plural form of a word includes the singular
use and the singular form of the word includes the plural.
[Reinsured policies]
This insurance policy establishes a risk management program created
by the Federal Crop Insurance Corporation (FCIC), an agency of the
United States Government, under the authority of the Federal Crop
Insurance Act (Act), as amended (7 U. S. C. 1501 et seq.).
This insurance policy is reinsured by FCIC under the provisions of
the Act. All terms of the policy and rights and responsibilities of the
parties are subject to the Act and all regulations under the Act
published in 7 CFR chapter IV, and may not be waived or varied in any
way by the crop insurance representative, any other representative or
employee of the company, any representative or employee of FCIC, the
Risk Management Agency, or the Farm Service Agency (FSA). All provisions
of State and local law in conflict with the provisions of this policy as
published in 7 CFR part 407 are preempted and the provisions of such
part will control.
Throughout this policy, ``you'' and ``your'' refer to the person
shown on the accepted application and ``we,'' ``us,'' and ``our'' refer
to the reinsured company issuing this policy. Unless the context
indicates otherwise, the use of the plural form of a word includes the
singular use and the singular form of the word includes the plural.
[Both policies]
The Group Risk Plan of Insurance (GRP) is designed as a risk
management tool to insure against widespread loss of production of the
insured crop in a county. It is primarily intended for use by those
producers whose

[[Page 78]]

farm yields tend to follow the average county yield. It is possible for
you to have a low yield on the acreage that you insure and still not
receive a payment under this plan.
For additional coverage you may select any percent coverage level
shown on the actuarial documents. Multiplying your coverage level
percent by the expected county yield shown on the actuarial documents
gives your trigger yield. If the payment yield that FCIC publishes for
the insured crop year falls below your trigger yield, you will receive a
payment.
On or before the sales closing date, you may select any dollar
amount of protection between 60 and 100 percent (except for Catastrophic
Risk Protection (CAT) which is 55 percent) of the maximum protection per
acre shown on the actuarial documents. This protection will be provided
for each acre of the crop planted by the acreage reporting date and
shown on your acreage report (unless otherwise provided in the crop
provisions) in which you have a share.
In accordance with the Act, FCIC will pay a portion of your premium,
as published in the actuarial documents. The premium rates, practices,
types, maximum protection per acre, and maximum subsidy per acre are
also shown on the actuarial documents.
FCIC will issue the payment yield in the calendar year following the
crop year insured. This yield will be the official estimated yield
published by the National Agricultural Statistics Service (NASS). You
will be paid if the payment yield falls below your trigger yield. The
amount of your payment per net insured acre will be calculated by
subtracting the payment yield from the trigger yield, dividing that
quantity by the trigger yield, and multiplying that result by your
protection per acre for each net acre that you have insured.
To be eligible to participate in the Group Risk Plan of Insurance
for any crop in any county, and to receive an indemnity thereunder, you
must have an insurable interest in an insured crop that is planted in
the county shown on the approved application. The crop must be planted
for harvest and be reported to us by the acreage reporting date. You may
only purchase coverage under the Group Risk Plan of Insurance on your
net acres of the insured crop.
The insurance contract shall become effective upon the acceptance by
us of a duly executed application for insurance on our form. Acceptance
occurs when we issue a Summary of Protection to you. The policy shall
consist of the accepted application, Group Risk Plan of Insurance Common
Policy Basic Provisions, Crop Provisions, Special Provisions, actuarial
documents, and any amendments, endorsements, or options.

Agreement To Insure

In return for your payment of the premium and your compliance with
all applicable provisions, we agree to provide risk protection as stated
in this policy. If a conflict exists among the policy provisions, the
order of priority is as follows: (1) The Catastrophic Risk Protection
Endorsement, if applicable; (2) the Special Provisions; (3) the Crop
Provisions; and (4) the Group Risk Plan Basic Provisions, with (1)
controlling (2), etc.

Terms and Conditions

Group Risk Plan of Insurance Basic Provisions

1. Definitions

Acreage report. A report required by section 7 of these Basic
Provisions that contains, in addition to other 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 Special Provisions
by which you must submit your acreage report in order to be eligible for
Group Risk Insurance.
Act. Federal Crop Insurance Act, (7 U.S.C. 1501 et seq.).
Actuarial documents. The material for the crop year which is
available for public inspection in your insurance provider's local
office, and which shows the maximum protection per acre, expected county
yield, coverage levels, premium rates, practices, program dates, and
other related information regarding crop insurance in the county.
Additional coverage. For GRP, an amount of protection greater than
catastrophic risk protection. The protection is on a per acre basis as
specified in the actuarial documents for the crop, practice, and type.
Billing date. The date, contained in the actuarial documents, by
which we will bill you for the premium and administrative fee on the
insured crop.
Cancellation date. The calendar date specified in the Crop
Provisions on which insurance for the next crop year will automatically
renew unless the policy is canceled in writing by either you or us or
terminated in accordance with policy terms.
Catastrophic risk protection. The minimum level of coverage offered
by FCIC. For GRP, an amount of protection equal to 65 percent of the
expected county yield indemnified at 55 percent of the maximum
protection per acre specified in the actuarial documents for the crop,
practice, and type.
County. Any county, parish, or other political subdivision of a
state shown on your accepted application.
Crop practice. The combination of inputs such as fertilizer,
herbicide, and pesticide, and operations such as planting, cultivation,
and irrigation, used to produce the insured

[[Page 79]]

crop. The insurable practices are contained 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 of time within which the insured crop is
normally grown and designated by the calendar year in which the crop is
normally harvested.
Dollar amount of protection per acre. The percentage of coverage
selected by you multiplied by the maximum protection per acre specified
in the actuarial documents for the crop, practice, and type. The dollar
amount of protection per acre is shown on your Summary of Protection.
Expected county yield. The yield contained in the actuarial
documents, on which your coverage for the crop year is based. This yield
is determined using historical NASS county average yields, as adjusted
by FCIC.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
corporation within USDA.
FSA. The Farm Service Agency, an agency of the United States
Department of Agriculture, or a successor agency.
Good farming practices. The cultural practices generally in use in
the county for the crop to make normal progress toward maturity, and are
those recognized by the Cooperative State Research, Education, and
Extension Service as compatible with agronomic and weather conditions in
the county.
GRP. Group Risk Plan of Insurance.
Insurance provider. The FSA or a private insurance company approved
by FCIC which provides crop insurance coverage to producers
participating in any Federal crop insurance program administered under
the Act.
Maximum protection per acre. The highest amount of protection
specified in the actuarial documents.
MPCI. Multiple peril crop insurance, an insurance product based on
an individual yield or amount of insurance.
NASS. National Agricultural Statistics Service, an agency within
USDA, or its successor, that publishes the official United States
Government yield estimates.
Net acres. The planted acreage of the insured crop multiplied by
your share.
Payment yield. The yield determined by FCIC based on NASS yields for
each insurable crop's type and practice, as adjusted by FCIC, and used
to determine whether an indemnity will be due.
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.
Sales closing date. The date contained in the Special Provisions by
which an application must be filed. The last date by which you may
change your crop insurance coverage for a crop year.
Share. Your percentage of interest in the insured crop, as an owner,
operator, or tenant at the time insurance attaches. 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.
Special provisions. The part of the policy that contains specific
provisions of insurance for each crop that may vary by geographic area.
Subsidy. The portion of your premium, shown on the actuarial
documents, that FCIC will pay in accordance with the Act.
Summary of protection. Our statement to you of the crop insured,
dollar amount of protection per acre, premiums, and other information
obtained from your accepted application, acreage report, and the
actuarial documents.
Termination date. The calendar date contained in the Crop Provisions
upon which insurance ceases to be in effect because of nonpayment of any
amount due us under the policy, including premium and administrative
fees.
Trigger yield. The result of multiplying the expected county yield
by the coverage level percentage chosen by you. When the payment yield
falls below the trigger yield, an indemnity is due.
Type. Plants of the insured crop having common traits or
characteristics that distinguish them as a group or class, and which are
designated in the actuarial documents.
USDA. United States Department of Agriculture.

2. Insured Crop

The insured crop will be the crop shown on your accepted
application, as specified in the applicable Crop Provisions, and must be
grown on insurable acres.

3. Insured and Insurable Acreage

(a) The insurable acreage is all of the acreage of the insured crop
for which premium rates are provided by the actuarial documents and in
which you have a share and which is in the county listed in your
accepted application. The dollar amount of protection per acre, amount
of premium, and indemnity will be calculated separately for each county,
type, and practice.
(b) Only the acreage seeded to the insured crop on or before the
acreage reporting date (unless otherwise provided in the Crop
Provisions) and physically located in the county listed on your accepted
application will be insured. Crops grown on acreage physically located
in another county must be reported and insured separately.

[[Page 80]]

(c) We will not insure any crop grown on any acreage where the crop
was destroyed or put to another use during the insurance period for the
purpose of conforming with, or obtaining a payment under, any other
program administered by the USDA.
(d) We will not insure any acreage where you have failed to follow
good farming practices for the insured crop.

4. Policy Protection

(a) For catastrophic risk protection GRP policies, the dollar amount
of protection per acre will be 55 percent of the maximum protection per
acre specified on the actuarial documents for each insured crop,
practice, and type. For additional coverage GRP policies, you may select
any dollar amount of protection from 60 percent through 100 percent of
the maximum protection per acre shown on the actuarial documents for the
crop, practice, and type.
(b) The dollar amount of protection per acre, multiplied by your net
insured acreage, is your policy protection for each insured crop,
practice, and type specified in the actuarial documents.
(c) All yields are based on NASS determinations, and such
determinations for the county will be conclusively presumed to be
accurate.

5. Coverage Levels

(a) For catastrophic risk protection GRP policies, the coverage
level is shown on the actuarial documents for each insured crop,
practice, and type. For additional coverage GRP policies, you may select
any percentage of coverage shown on the actuarial documents for the
crop, practice, and type.
(b) Your coverage level multiplied by the expected county yield
shown on the actuarial documents is your trigger yield. If the payment
yield published by FCIC for the insured crop, practice, and type for the
insured crop year falls below your trigger yield, you will receive an
indemnity payment.
(c) You may change the coverage level or amount of protection for
each insured crop on or before the sales closing date. Changes must be
in writing and received by us by the sales closing date.

6. Payment Calculation Factor

Your payment calculation factor will be ((your trigger yield-payment
yield) / your trigger yield) for the purposes of calculating an
indemnity payment.

7. Report of Acreage and Share

(a) You must report on our form all acreage for each insured crop in
which you have a share (insurable and not insured) by practice and type
specified in the actuarial documents in each county listed on your
accepted application. This report must be submitted each year on or
before the acreage reporting date for the insured crop contained in the
actuarial documents. If you do not submit an acreage report by the
acreage reporting date, we will determine your acreage and share or deny
liability on the policy.
(b) We will not insure any acreage of the insured crop planted after
the acreage reporting date, unless otherwise provided in the Crop
Provisions.
(c) Your premium will be based on the greater of the acreage
reported on the acreage report or the acreage determined by us to be
accurate.
(d) The payment of an indemnity will be based on your insurable
acreage on the acreage reporting date.
(e) If you misrepresent or omit any information, we will revise the
premium or liability or both for each insured crop in the county, by
type and practice, to the amount we determine to be correct.
(f) You may insure only your share of the crop, which includes any
share of your spouse and dependent children unless it is demonstrated to
our satisfaction, prior to the sales closing date, that you and your
spouse maintain completely separate farming operations and that each
spouse is the operator of his or her own separate operation. Any
commingling of any part of the operations will cause shares of you and
your spouse to be combined.

8. Administrative Fees and Annual Premium

(a) If you obtain a catastrophic risk protection GRP policy, you
will pay an administrative fee, unless otherwise specified in 7 CFR part
400:
(1) Of $100 per crop per county;
(2) Payable to the insurance provider on the billing date for the
crop.
(b) If you obtain an additional coverage GRP policy, you will pay an
administrative fee:
(1) Of $30 per crop per county;
(2) Payable to the insurance provider on the billing date for the
crop.
(c) Limited resource farmers as defined in 7 CFR 457.8 may apply for
a waiver of administrative fees.
(d) For additional coverage GRP policies, your premium is determined
by multiplying your policy protection by the premium rate per hundred
dollars of protection for your coverage level contained in the actuarial
documents, by 0.01, and subtracting the applicable subsidy.
(e) For catastrophic risk protection and additional coverage GRP
policies, payment of an administrative fee 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 and administrative sanctions).

[[Page 81]]

(f) The annual premium is earned and payable at the time the insured
crop is planted. For each insured crop, you will be billed for premium
and the administrative fee by the billing date specified in the Special
Provisions. Premium, administrative fee, and any other amount owed us is
due on the billing date and interest will accrue if the premium,
administrative fee, or any other amount owed is not received by us
before the first day of the month following the premium billing date.
(g) The premium, administrative fee, and any other amount due, plus
any accrued interest, will be considered delinquent if it is not paid on
or before the termination date specified in the Crop Provisions. This
may affect your eligibility for benefits under other USDA programs. A
debt for any crop insured with us under the authority of the Act will be
deducted from any indemnity due you for this or any other crop insured
with us.
(h) Failure to pay the premium and any administrative fee due, plus
any accrued interest and penalties, by the termination date will make
you ineligible for any crop insurance under the Act for subsequent crop
years until the sales closing date after the date the debt, including
interest and penalties, is paid or satisfactory arrangements acceptable
to us for such payment are made.

9. Written Agreements

Terms of this policy which are specifically designated for the use
of written agreements may be altered by written agreement in accordance
with the following:
(a) You must apply in writing for each written agreement no later
than the sales closing date;
(b) The application for written agreement must contain all variable
terms of the contract between you and us that will be in effect if the
written agreement is not approved;
(c) If approved by us, the written agreement will include all
variable terms of the contract, including, but not limited to, crop type
or variety, the protection per acre, premium rate, and price election;
and
(d) Each written agreement will only be valid for one year. If the
written agreement is not specifically renewed the following year,
insurance coverage for subsequent crop years will be in accordance with
the printed policy.

10. Access to Insured Crop and Record Retention

We may examine the insured crop and any records relating to the crop
and this insurance at any location where such crop or such records may
be found or maintained, as often as we reasonably require. Records
relating to the planting of the insured crop and your net acres must be
retained for three years after the end of the crop year or three years
after the date of payment of the final indemnity, whichever is later. We
may extend the record retention period beyond three years by notifying
you of such extension in writing. Failure to maintain such records will,
at our option, result in cancellation of the policy or a determination
that no indemnity is due.

11. 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. We will not be liable for any more than the liability
determined in accordance with your policy that existed before the
transfer occurred. The transfer of coverage rights must be on our form
and will not be effective until approved by us in writing. Both you and
the transferee are jointly and severally liable for payment of the
premium. The transferee has all rights and responsibilities under this
policy consistent with the transferee's interest.

12. Assignment of Indemnity

You may assign to another person your right to an indemnity for the
crop year. The assignment must be on our form and will not be effective
until approved in writing by us.

13. Other Insurance

You may not obtain any other crop insurance issued under the
authority of the Act on your share of the insured crop. If we determine
that more than one policy on your share is intentional, you may be
subject to the sanctions authorized under this policy, the Act, or any
other applicable statute. If we determine that the violation was not
intentional, the policy with the earliest date of application will be in
force and all other policies will be void. Nothing in this paragraph
prevents you from obtaining other insurance not issued under the Act.

14. Legal Action Against Us

(a) You may not bring legal action against us unless you have
complied with all of the policy provisions.
(b) If you do take legal action against us, you must do so within 12
months of the date of denial of a claim. Suit must be brought in
accordance with the provisions of 7 U.S.C. 1508(j).
(c) Your right to recover damages (compensatory, punitive, or
other), attorney's fees, or other charges is limited or excluded by this
contract or by Federal Regulations.
[FCIC policy]

[[Page 82]]

15. Restrictions, Limitations, and Amounts Due Us

(a) We may restrict the amount of acreage we will insure to the
amount allowed under any acreage limitation program established by USDA.
(b) Violation of Federal statutes including, but not limited to, the
Act; the controlled substance provisions of the Food Security Act of
1985; the Food, Agriculture, Conservation, and Trade Act of 1990; and
the Omnibus Budget Reconciliation Act of 1993, and any regulation
promulgated thereunder, will result in cancellation, termination, or
voidance of your crop insurance contract. 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 not to exceed 20 percent of the premium paid or to
be paid by you.
(c) Our maximum liability under this policy will be limited to the
policy protection specified in section 4 of this policy. Under no
circumstances will we be liable for the payment of damages
(compensatory, punitive, or other), attorney's fees, or other charges in
connection with any claim for indemnity, whether we approve or
disapprove such indemnity.
(d) We will pay simple interest computed on the net indemnity
ultimately found to be due by us or determined by a final judgment of a
court of competent jurisdiction or a final administrative determination
from, and including, the 61st day after the date we receive the NASS
county yield estimates for the insured crop year. 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. 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 et seq.), and published in
the Federal Register.
(e) 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.
(f) Interest will accrue at the rate not to exceed 1.25 percent
simple interest per calendar month, or any part thereof, on any unpaid
premium or administrative fee balance. For the purpose of premium and
administrative fee amounts due us, interest will begin to accrue on the
first day of the month following the premium billing date specified in
the Special Provisions.
(g) For the purpose of any other amounts due us, such as repayment
of indemnities found not to have been earned:
(1) Interest will start to accrue 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 in full 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.
(h) 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.
(i) If we determine that it is necessary to contract with a
collection agency, refer the debt to governmental collection centers,
the Department of Treasury Offset Program, or to employ an attorney to
assist in collection, you agree to pay all of the expenses of
collection.
(j) All amounts paid by you will be applied first to expenses of
collection if any, second to reduction of any penalties which may have
been assessed, then to reduction of accrued interest, and finally, to
reduction of the principal balance.
[Reinsured policy]

15. Restrictions, Limitations, and Amounts Due Us

[[Page 83]]

specified in section 4 of this policy. Under no circumstances will we be
liable for the payment of damages (compensatory, punitive, or other),
attorney's fees, or other charges in connection with any claim for
indemnity, whether we approve or disapprove such indemnity.
(d) Interest will accrue at the rate not to exceed 1.25 percent
simple interest per calendar month, or any part thereof, on any unpaid
premium or administrative fee balance. For the purpose of premium and
administrative fee amounts due us, interest will begin to accrue on the
first day of the month following the premium billing date specified in
the Special Provisions.
(e) For the purpose of any 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. Amounts found due under this paragraph will not be
charged interest if payment in full is made within 30 days of issuance
of notice by us. The amount will be considered delinquent if not paid in
full within 30 days of the date the notice is issued by us.
(f) All amounts paid will be applied first to expenses of collection
(see subsection (g) of this section) if any, second to reduction of
accrued interest, and then to reduction of the principal balance.
(g) 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.
(h) A portion of the amount paid to you to which you were not
entitled may be collected through administrative offset from payments
you receive from United States government agencies in accordance with 31
U.S.C. chapter 37.
[FCIC policy]

16. Determinations

All determinations required by the policy will be made by us. If you
disagree with our determinations, you may obtain reconsideration or you
may appeal our determinations in accordance with 7 CFR part 11.
[Reinsured policy]

16. Determinations

(a) If you and we fail to agree on any factual determination, the
disagreement will be resolved in accordance with the rules of the
American Arbitration Association. Failure to agree with any factual
determination made by FCIC must be resolved through the FCIC appeal
provisions published at 7 CFR part 11.
(b) No award determined by arbitration or appeal can exceed the
amount of liability established or which should have been established
under this policy.
[Both policies]

17. Holidays and Weekends

If any date specified in this program falls on Saturday, Sunday, or
a legal Federal holiday, that date will be extended to the next business
day.

18. 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.
(b) Your application for insurance must contain all the information
required by us to insure the crop. Applications that do not contain all
social security numbers and employer identification numbers, as
applicable (except as stated herein), coverage level, price election,
crop, type, variety, or class, plan of insurance, and any other material
information required to insure the crop, are not acceptable. If a person
with a substantial beneficial interest in the insured crop refuses to
provide a social security number or employer identification number, the
amount of coverage available under the policy will be reduced
proportionately by that person's share of the crop.
(c) After acceptance of the application, you may not cancel this
policy for the initial crop year. Thereafter, the policy will continue
in force for each succeeding crop year unless canceled or terminated as
provided below.
(d) 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.
(e) If any amount due, including premium, is not paid on or before
the termination date for the crop on which an amount is due:
(1) For a policy with the unpaid premium, the policy will terminate
effective on the termination date immediately subsequent to the billing
date for the crop year;
(2) For a policy with other amounts due, the policy will terminate
effective on the termination date immediately after the account becomes
delinquent;
(3) Ineligibility will be effective as of the date that the policy
was terminated for the crop for which you failed to pay an amount owed
and for all other insured crops with coincidental termination dates;
(4) All other policies that are issued by us under the authority of
the Act will also terminate as of the next termination date contained in
the applicable policy;
(5) If you are ineligible, you may not obtain any crop insurance
under the Act until payment is made, you execute an agreement to repay
the debt and make the payments in accordance with the agreement, or you
file a

[[Page 84]]

petition to have your debts discharged in bankruptcy;
(6) If you execute an agreement to repay the debt and fail to timely
make any scheduled payment, you will be ineligible for crop insurance
effective on the date the payment was due until the debt is paid in full
or you file a petition to discharge the debt in bankruptcy and
subsequently obtain discharge of the amounts due. Dismissal of the
bankruptcy petition before discharge will void all policies in effect
retroactive to the date you were originally determined ineligible to
participate;
(7) Once the policy is terminated, the policy cannot be reinstated
for the current crop year unless the termination was in error;
(8) After you again become eligible for crop insurance, if you want
to obtain coverage for your crops, you must reapply on or before the
sales closing date for the crop (since applications for crop insurance
cannot be accepted after the sales closing date, if you make any payment
after the sales closing date, you cannot apply for insurance until the
next crop year); and
(9) If we deduct the amount due us from an indemnity, the date of
payment for the purpose of this section will be the date you sign the
properly executed claim for indemnity.
(10) For example, if crop A, with a termination date of October 31,
1997, and crop B, with a termination date of March 15, 1998, 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, 1997, and crop A's
policy is terminated on that date. Crop B's policy is terminated as of
March 15, 1998. If you enter an agreement to repay the debt on April 25,
1998, you can apply for insurance for crop A by the October 31, 1998,
sales closing date and crop B by the March 15, 1999, sales closing date.
If you fail to make a scheduled payment on November 1, 1998, you will be
ineligible for crop insurance effective on November 1, 1998, and you
will not be eligible unless the debt is paid in full or you file a
petition to have the debt discharged in bankruptcy and subsequently
receive discharge.
(f) If you die, disappear, or are judicially declared incompetent,
or if you are an entity other than an individual and such entity is
dissolved, the policy will terminate as of the date of death, judicial
declaration, or dissolution. If such event occurs after coverage begins
for any crop year, the policy will continue in force through the crop
year and terminate at the end of the insurance period and any indemnity
will be paid to the person or persons determined to be beneficially
entitled to the indemnity. The premium will be deducted from the
indemnity or collected from the estate. Death of a partner in a
partnership will dissolve the partnership unless the partnership
agreement provides otherwise. If two or more persons having a joint
interest are insured jointly, death of one of the persons will dissolve
the joint entity.
(g) We may terminate your policy if no premium is earned for 3
consecutive years.
(h) The cancellation and termination dates are contained in the Crop
Provisions.

19. Contract Changes

(a) We may change any terms and conditions of this policy from year
to year.
(b) Any changes in policy provisions, expected county yields,
maximum amounts of protection, premium rates, and program dates will be
provided by us to your local crop insurance provider not later than the
contract change date contained in the Crop Provisions. You may view the
documents or request copies from your local crop insurance provider.
(c) You will be notified, in writing, of changes to the Basic
Provisions, Crop Provisions, and Special Provisions of this policy not
later than 30 days prior to the cancellation date for the insured crop.
Acceptance of changes will be conclusively presumed in the absence of
notice from you to change or cancel your insurance coverage.

20. Eligibility for Other Farm Program Benefits

To remain eligible for benefits under the Agriculture Marketing
Transition Act, the conservation reserve program, or certain farm loans,
you are required to obtain at least the catastrophic level of coverage
for either GRP or any other plan of insurance that is available in the
county, for all crops of economic significance, or execute a waiver of
your rights to any emergency crop assistance on or before the sales
closing date for the crop.

An Example To Demonstrate How GRP Works

Producer A buys 90 percent coverage and selects $160 protection per
acre. Producer B buys 75 percent coverage and selects $185 protection
per acre. Both producers have 100 percent share and both plant 200 acres
of a crop in the county. The expected county yield is 45 bushels per
acre. The premium rate for 90 percent coverage is $6.14 per hundred
dollars of protection and the premium rate for 75 percent coverage is
$3.30 per hundred dollars of protection.
A's trigger yield is 40.5 bushels per acre (90% x 45), and the total
premium due is $1,965 ($160 x $6.14 x 200 acres x 0.01). Of that amount,
FCIC pays $614 (200 acres x the maximum subsidy of $3.07 per acre). A's
policy protection is $32,000 ($160 x 200 acres).
B's trigger yield is 33.8 bushels per acre (75% of 45), and the
total premium due is $1,221 ($185 x $3.30 x 200 acres x 0.01). Of that
amount, FCIC pays $442 (200 acres x the subsidy amount of $2.21 per
acre). B's policy protection is $37,000 ( $185 x 200 acres).

[[Page 85]]

Scenario 1 (likely)
FCIC issues a payment yield of 46 bushels per acre. This is above
both producers' trigger yields, so no indemnity payment is made, even if
one or both have individual yields that are below the trigger yield.
Scenario 2 (less likely)
FCIC issues a payment yield of 38 bushels per acre. A's payment
calculation factor is 0.062 ((40.5 - 38) / 40.5). This number multiplied
by the policy protection yields an indemnity payment of $1,984 (.062 x
$32,000). B's trigger yield is less than the payment yield, so no
indemnity payment is made.
Scenario 3 (least likely)
FCIC issues a payment yield of 22 bushels per acre. A's payment
calculation factor is 0.457 ((40.5 - 22) / 40.5). The payment is $14,624
(0.457 x $32,000). B's payment calculation factor is 0.349 ((33.8 - 22)
/ 33.8), and the final indemnity payment is $12,913 (0.349 x $37,000).

[64 FR 30219, June 7, 1999, as amended at 65 FR 40485, June 30, 2000]