CHAPTER 36 —CROP INSURANCE
Chapter Referred to in Other Sections
This chapter is referred to in
§1501. Short title; application of other laws
This chapter may be cited as the "Federal Crop Insurance Act". Except as otherwise expressly provided the provisions in titles I to IV, inclusive, shall not apply with respect to this chapter, and the term "Act" wherever it appears in such titles shall not be construed to include this chapter.
(Feb. 16, 1938, ch. 30, title V, §501,
References in Text
"Titles I to IV, inclusive," and "such titles", referred to in text, are references to titles I to IV of act Feb. 16, 1938, ch. 30,
Short Title of 1994 Amendment
Short Title of 1980 Amendment
§1502. Purpose and definitions
(a) Purpose
It is the purpose of this chapter to promote the national welfare by improving the economic stability of agriculture through a sound system of crop insurance and providing the means for the research and experience helpful in devising and establishing such insurance.
(b) Definitions
As used in this chapter:
(1) Additional coverage
The term "additional coverage" means a plan of crop insurance coverage providing a level of coverage greater than the level available under catastrophic risk protection.
(2) Approved insurance provider
The term "approved insurance provider" means a private insurance provider that has been approved by the Corporation to provide insurance coverage to producers participating in the Federal crop insurance program established under this chapter.
(3) Board
The term "Board" means the Board of Directors of the Corporation established under
(4) Corporation
The term "Corporation" means the Federal Crop Insurance Corporation established under
(5) Department
The term "Department" means the United States Department of Agriculture.
(6) Loss ratio
The term "loss ratio" means the ratio of all sums paid by the Corporation as indemnities under any eligible crop insurance policy to that portion of the premium designated for anticipated losses and a reasonable reserve, other than that portion of the premium designated for operating and administrative expenses.
(7) Secretary
The term "Secretary" means the Secretary of Agriculture.
(8) Transitional yield
The term "transitional yield" means the maximum average production per acre or equivalent measure that is assigned to acreage for a crop year by the Corporation in accordance with the regulations of the Corporation whenever the producer fails—
(A) to certify that acceptable documentation of production and acreage for the crop year is in the possession of the producer; or
(B) to present the acceptable documentation on the demand of the Corporation or an insurance company reinsured by the Corporation.
(Feb. 16, 1938, ch. 30, title V, §502,
Amendments
1994—
1947—Act Aug. 1, 1947, amended section generally, restating purpose of chapter to improve all agriculture by crop insurance instead of being limited only to wheat.
1941—Act June 21, 1941, substituted "crop" for "wheat-crop" and "agricultural commodities" for "wheat".
Effective Date of 1994 Amendment
Section 120 of title I of
§1503. Federal Crop Insurance Corporation; creation; offices
To carry out the purposes of this chapter, there is hereby created as an agency of and within the Department a body corporate with the name "Federal Crop Insurance Corporation". The principal office of the Corporation shall be located in the District of Columbia, but there may be established agencies or branch offices elsewhere in the United States under rules and regulations prescribed by the Board.
(Feb. 16, 1938, ch. 30, title V, §503,
Amendments
1994—
Effective Date of 1994 Amendment
Amendment by
Transfer of Functions
Under authority of Ex. Ord. No. 9577, June 29, 1945, Secretary of Agriculture consolidated administration of program of Federal Crop Insurance Corporation in Production and Marketing Administration by Memorandum 1118, Aug. 18, 1945. 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Federal Crop Insurance Corporation consolidated with other agencies into Agricultural Conservation and Adjustment Administration for duration of war, see Ex. Ord. No. 9069.
Cross References
Financial control of Corporation, see
Section Referred to in Other Sections
This section is referred to in
§1504. Capital stock of Corporation
(a) Subscription by United States
The Corporation shall have a capital stock of $500,000,000 subscribed by the United States of America, payment for which shall, with the approval of the Secretary, be subject to call in whole or in part by the Board.
(b) Appropriations
There is authorized to be appropriated such sums as are necessary for the purpose of subscribing to the capital stock of the Corporation.
(c) Issuance of stock to Secretary of the Treasury
Receipts for payments by the United States of America for or on account of such stock shall be issued by the Corporation to the Secretary of the Treasury and shall be evidence of the stock ownership by the United States of America.
(d) Cancellation of receipts; nonliability of Corporation
Within thirty days after September 26, 1980, the Secretary of the Treasury shall cancel, without consideration, receipts for payments for or on account of the stock of the Corporation outstanding on September 26, 1980, and such receipts shall cease to be liabilities of the Corporation.
(Feb. 16, 1938, ch. 30, title V, §504,
Amendments
1994—Subsec. (a).
Subsec. (d).
1980—Subsec. (a).
Subsec. (d).
1977—Subsec. (a).
1949—Subsec. (a). Act Aug. 25, 1949, §4, struck out second sentence relating to restoration of impairment of capital stock.
Subsec. (b). Act Aug. 25, 1949, §6, authorized appropriations for subscribing to corporation's capital stock in order to offset losses suffered prior to time program was placed on an experimental basis in 1947.
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Section 112 of
Section 101(a) of
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
Cancellation of Outstanding Receipts for Stock in Excess of $27,000,000
Section 5 of act Aug. 25, 1949, provided that: "The Secretary of the Treasury is authorized and directed to cancel, without consideration, outstanding receipts for payments for or on account of the stock of the Corporation in excess of $27,000,000."
Institution of Expanded Program; Payment of Cost for Fiscal Year 1950
Section 11 of act Aug. 25, 1949, provided that: "The expanded program authorized herein [
§1504a. Capitalization of Corporation
The payment for capital stock in the Federal Crop Insurance Corporation shall be effected by transfer of funds on the books of the Treasury Department to the credit of the Corporation.
(June 27, 1940, ch. 437, title I,
Codification
Section was not enacted as part of the Federal Crop Insurance Act which comprises this chapter.
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1505. Management of Corporation
(a) Establishment, composition, and appointment of Board
The management of the Corporation shall be vested in a Board subject to the general supervision of the Secretary. The Board shall consist of the manager of the Corporation, the Under Secretary of Agriculture responsible for the Federal crop insurance program, one additional Under Secretary of Agriculture (as designated by the Secretary of Agriculture), one person experienced in the crop insurance business who is not otherwise employed by the Federal Government, and three active farmers who are not otherwise employed by the Federal Government. The Board shall be appointed by, and hold office at the pleasure of, the Secretary. The Secretary shall not be a member of the Board. The Secretary, in appointing the three active farmers who are not otherwise employed by the Federal Government, shall ensure that such members are policyholders and are from different geographic areas of the United States, in order that diverse agricultural interests in the United States are at all times represented on the Board.
(b) Vacancies
Vacancies in the Board so long as there shall be four members in office shall not impair the powers of the Board to execute the functions of the Corporation, and four of the members in office shall constitute a quorum for the transaction of the business of the Board.
(c) Compensation
The Directors of the Corporation who are employed in the Department shall receive no additional compensation for their services as such Directors but may be allowed necessary traveling and subsistence expenses when engaged in business of the Corporation, outside of the District of Columbia. The Directors of the Corporation who are not employed by the Federal Government shall be paid such compensation for their services as Directors as the Secretary shall determine, but such compensation shall not exceed the daily equivalent of the rate prescribed for grade GS–18 under
(d) Manager of Corporation
The manager of the Corporation shall be its chief executive officer, with such power and authority as may be conferred by the Board. The manager shall be appointed by, and hold office at the pleasure of, the Secretary.
(Feb. 16, 1938, ch. 30, title V, §505,
Amendments
1994—Subsec. (a).
Subsec. (c).
Subsec. (d).
1980—Subsec. (a).
Subsec. (b).
Subsec. (c).
1949—Subsec. (c). Act Aug. 25, 1949, reduced compensation of members of Board of Directors who are not Government employees from "not to exceed $100 per day" to "not to exceed $50 per day", and changed from "subsistence expenses" to "transportation expenses and not to exceed $10 per diem".
1947—Act Aug. 1, 1947, amended section generally and, among other changes, increased membership of Board from three to five, provided for two members with insurance experience, not Government employees, increased from two to three the number of members necessary to carry on functions and to constitute a quorum, provided for compensation and expenses of Board members not otherwise Government employed, and for appointment of manager of corporation by the Secretary of Agriculture instead of being selected by the Board.
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
References in Other Laws to GS–16, 17, or 18 Pay Rates
References in laws to the rates of pay for GS–16, 17, or 18, or to maximum rates of pay under the General Schedule, to be considered references to rates payable under specified sections of Title 5, Government Organization and Employees, see section 529 [title I, §101(c)(1)] of
Section Referred to in Other Sections
This section is referred to in
§1506. General powers
(a) Succession
The Corporation shall have succession in its corporate name.
(b) Corporate seal
The Corporation may adopt, alter, and use a corporate seal, which shall be judicially noticed.
(c) Property
The Corporation may purchase or lease and hold such real and personal property as it deems necessary or convenient in the transaction of its business, and may dispose of such property held by it upon such terms as it deems appropriate.
(d) Suit
The Corporation, subject to the provisions of
(e) Bylaws and regulations
The Corporation may adopt, amend, and repeal bylaws, rules, and regulations governing the manner in which its business may be conducted and the powers granted to it by law may be exercised and enjoyed.
(f) Mails
The Corporation shall be entitled to the use of the United States mails in the same manner as the other executive agencies of the Government.
(g) Assistance
The Corporation, with the consent of any board, commission, independent establishment, or executive department of the Government, including any field service thereof, may avail itself of the use of information, services, facilities, officials, and employees thereof in carrying out the provisions of this chapter.
(h) Data collection
The Corporation shall assemble data for the purpose of establishing sound actuarial bases for insurance on agricultural commodities.
(i) Expenditures
The Corporation shall determine the character and necessity for its expenditures under this chapter and the manner in which they shall be incurred, allowed, and paid, without regard to the provisions of any other laws governing the expenditure of public funds and such determinations shall be final and conclusive upon all other officers of the Government.
(j) Settling claims
The Corporation shall have the authority to make final and conclusive settlement and adjustment of any claim by or against the Corporation or a fiscal officer of the Corporation.
(k) Other powers
The Corporation shall have such powers as may be necessary or appropriate for the exercise of the powers herein specifically conferred upon the Corporation and all such incidental powers as are customary in corporations generally.
(l) Contracts
The Corporation may enter into and carry out contracts or agreements, and issue regulations, necessary in the conduct of its business, as determined by the Board. State and local laws or rules shall not apply to contracts, agreements, or regulations of the Corporation or the parties thereto to the extent that such contracts, agreements, or regulations provide that such laws or rules shall not apply, or to the extent that such laws or rules are inconsistent with such contracts, agreements, or regulations.
(m) Submission of certain information
(1) Social security account and employer identification numbers
The Corporation shall require, as a condition of eligibility for participation in the multiple peril crop insurance program, submission of social security account numbers, subject to the requirements of section 405(c)(2)(C)(iii) 1 of title 42, and employer identification numbers, subject to the requirements of
(2) Notification by policyholders
Each policyholder shall notify each individual or other entity that acquires or holds a substantial beneficial interest in such policyholder of the requirements and limitations under this chapter.
(3) Identification of holders of substantial interests
The Manager of the Corporation may require each policyholder to provide to the Manager, at such times and in such manner as prescribed by the Manager, the name of each individual that holds or acquires a substantial beneficial interest in the policyholder.
(4) "Substantial beneficial interest" defined
For purposes of this subsection, the term "substantial beneficial interest" means not less than 5 percent of all beneficial interests in the policyholder.
(n) Penalties
(1) False information
If a person willfully and intentionally provides any false or inaccurate information to the Corporation or to any insurer with respect to an insurance plan or policy under this chapter, the Corporation may, after notice and an opportunity for a hearing on the record—
(A) impose a civil fine of not to exceed $10,000 on the person; and
(B) disqualify the person from purchasing catastrophic risk protection or receiving noninsured assistance for a period of not to exceed 2 years, or from receiving any other benefit under this chapter for a period of not to exceed 10 years.
(2) Assessment of penalty
In assessing penalties under this subsection, the Corporation shall consider the gravity of the violation.
(o) Actuarial soundness
(1) Projected loss ratio as of October 1, 1995
The Corporation shall take such actions as are necessary to improve the actuarial soundness of Federal multiperil crop insurance coverage made available under this chapter to achieve, on and after October 1, 1995, an overall projected loss ratio of not greater than 1.1, including—
(A) instituting appropriate requirements for documentation of the actual production history of insured producers to establish recorded or appraised yields for Federal crop insurance coverage that more accurately reflect the associated actuarial risk, except that the Corporation may not carry out this paragraph in a manner that would prevent beginning farmers (as defined by the Secretary) from obtaining Federal crop insurance;
(B) establishing in counties, to the extent practicable, a crop insurance option based on area yields in a manner that allows an insured producer to qualify for an indemnity if a loss has occurred in a specified area in which the farm of the insured producer is located;
(C) establishing a database that contains the social security account and employee identification numbers of participating producers, agents, and loss adjusters and using the numbers to identify insured producers, agents, and loss adjusters who are high risk for actuarial purposes and insured producers who have not documented at least 4 years of production history, to assess the performance of insurance providers, and for other purposes permitted by law; and
(D) taking any other measures authorized by law to improve the actuarial soundness of the Federal crop insurance program while maintaining fairness and effective coverage for agricultural producers.
(2) Projected loss ratio as of October 1, 1998
The Corporation shall take such actions, including the establishment of adequate premiums, as are necessary to improve the actuarial soundness of Federal multiperil crop insurance made available under this chapter to achieve, on and after October 1, 1998, an overall projected loss ratio of not greater than 1.075.
(3) Nonstandard classification system
To the extent that the Corporation uses the nonstandard classification system, the Corporation shall apply the system to all insured producers in a fair and consistent manner.
(p) Regulations
The Secretary and the Corporation are each authorized to issue such regulations as are necessary to carry out this chapter.
(q) Program compliance
(1) Timeliness
The Corporation shall work actively with approved insurance providers to address program compliance and integrity issues as the issues develop.
(2) Notification of compliance problems
The Corporation shall notify in writing any approved insurance provider with whom the Corporation has an agreement under this chapter of any error, omission, or failure to follow Corporation regulations or procedures for which the approved insurance provider may be responsible and which may result in a debt owed the Corporation. The notice shall be given within 3 years of the end of the insurance period during which the error, omission, or failure is alleged to have occurred, except that this time limit shall not apply with respect to errors, omissions, or procedural violations that are willful or intentional. The failure to timely provide the notice required under this subsection shall relieve the approved insurance provider from the debt owed the Corporation.
(r) Purchase of American-made equipment and products
(1) Sense of Congress
It is the sense of Congress that, to the greatest extent practicable, all equipment and products purchased by the Corporation using funds made available to the Corporation should be American-made.
(2) Notice requirement
In providing financial assistance to, or entering into any contract with, any entity for the purchase of equipment and products to carry out this chapter, the Corporation, to the greatest extent practicable, shall provide to the entity a notice describing the statement made in paragraph (1).
(s) Procedures for responding to certain inquiries
(1) Procedures required
The Corporation shall establish procedures under which the Corporation will provide a final agency determination in response to an inquiry regarding the interpretation by the Corporation of this chapter or any regulation issued under this chapter.
(2) Implementation
Not later than 180 days after June 23, 1998, the Corporation shall issue regulations to implement this subsection. At a minimum, the regulations shall establish—
(A) the manner in which inquiries described in paragraph (1) are required to be submitted to the Corporation; and
(B) a reasonable maximum number of days within which the Corporation will respond to all inquiries.
(3) Effect of failure to timely respond
If the Corporation fails to respond to an inquiry in accordance with the procedures established pursuant to this subsection, the person requesting the interpretation of this chapter or regulation may assume the interpretation is correct for the applicable reinsurance year.
(Feb. 16, 1938, ch. 30, title V, §506,
References in Text
Amendments
1998—Subsec. (s).
1994—Subsec. (d).
Subsec. (j).
Subsec. (k).
Subsec. (l).
Subsec. (m).
Subsec. (n).
Subsec. (n)(1)(B).
Subsec. (o).
Subsec. (o)(1).
Subsec. (o)(1)(A).
Subsec. (o)(1)(B).
Subsec. (o)(1)(C).
Subsec. (o)(1)(D).
Subsec. (o)(2) to (4).
Subsecs. (p) to (r).
1993—Subsec. (n).
1991—Subsec. (d).
Subsec. (m)(1).
1990—
Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsec. (i).
Subsec. (j).
Subsec. (k).
Subsec. (l).
Subsec. (m).
1980—Subsec. (c).
Subsec. (d).
Subsec. (f).
Subsec. (h).
Subsec. (k).
1949—Subsec. (h). Act Aug. 25, 1949, struck out obsolete language and included authority for a study of the possibility of developing some type of livestock insurance.
1947—Subsec. (d). Act Aug. 1, 1947, provided for suits in State courts of general jurisdiction or in United States district courts regardless of amount in controversy.
1941—Subsec. (h). Act June 21, 1941, substituted "and preparatory to the application of the chapter to other basic commodities when so provided by law, shall assemble data relative to field corn, for the purpose of establishing a satisfactory actuarial basis for such commodity" for "for wheat and other agricultural commodities."
Effective Date of 1998 Amendment
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1993 Amendment
Section 1403(c)(1) of
Effective Date of 1980 Amendment
Amendment by
Regulations
Section 1403(c)(2) of
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
Required Terms and Conditions of Standard Reinsurance Agreements
"(a)
"(b)
"(1)
"(2)
"(A) Section II, concerning the terms of reinsurance and underwriting gain and loss for an approved insurance provider.
"(B) Section III, concerning the terms for subsidies and administrative fees for an approved insurance provider.
"(C) Section IV, concerning the terms for loss adjustment for an approved insurance provider under catastrophic risk protection.
"(D) Section V.C., concerning interest payments between the Corporation and an approved insurance provider.
"(E) Section V.I.5., concerning liquidated damages.
"(c)
Crop Insurance Provider Evaluation
Section 118 of
"(a)
"(b)
"(c)
"(d)
"(1) consider the changes made by the Corporation in response to increased program participation resulting from the enactment of this Act;
"(2) include an evaluation and opinion of the accuracy and reasonableness of—
"(A) the average actual costs for approved insurance providers to deliver multiple peril crop insurance;
"(B) the cost per policy of complying with the requirements, regulations, procedures, and processes of the Federal Crop Insurance Act;
"(C) the cost differences for various provider firm sizes and any business delivered by the Federal Government;
"(D) the adequacy of the standard reimbursement for potential new providers; and
"(E) the identification of any new costs related to the enactment of this Act not previously identified in the information reported by the providers;
"(3) compare delivery costs of multiple peril crop insurance to other insurance coverages that the provider may sell and determine the extent, if any, to which any funds provided to carry out the Federal Crop Insurance Act are being used to fund any other business enterprise operated by the provider;
"(4)(A) assess alternative methods for reimbursing providers for reasonable and necessary expenses associated with delivery of multiple peril crop insurance;
"(B) recommend changes under this paragraph that reasonably demonstrate the need to achieve the greatest operating efficiencies on the part of the provider and the Corporation has been recognized; and
"(C) identify areas for improved operating efficiencies, if any, in the requirements made by the Corporation for compliance and program integrity;
"(5) assess the potential for alternative forms of reinsurance arrangements for providers of different firm sizes, taking into consideration—
"(A) the need to achieve a reasonable return on the capital of the provider compared to other lines of insurance;
"(B) the relative risk borne by the provider for the different lines of insurance;
"(C) the availability and price of commercial reinsurance; and
"(D) any additional costs that may be incurred by the Federal Government in carrying out the Federal Crop Insurance Act; and
"(6) include an analysis of the effect of the current or proposed reinsurance arrangements on providers having different business levels.
"(e)
"(1)
"(2)
Cross References
Amount in controversy, generally, see
Amount in controversy immaterial in action arising under Act regulating commerce, see
Jurisdiction of district court of action by corporation organized under federal law, see
Section Referred to in Other Sections
This section is referred to in
1 See References in Text note below.
§§1506a, 1506b. Omitted
Codification
Section 1506a, act July 30, 1947, ch. 356, title II, §202,
Section 1506b, acts June 29, 1954, ch. 409, title II, §201,
§1507. Personnel of Corporation
(a) Appointment; civil service exemption; compensation
The Secretary shall appoint such officers and employees as may be necessary for the transaction of the business of the Corporation pursuant to civil-service laws and regulations, fix their compensation in accordance with the provisions of
(b) Application of employees' compensation law
Insofar as applicable, the benefits of subchapter I of
(c) Use of associations of producers and private insurance companies; payment of administrative and program expenses; sale of crop insurance through private agents and brokers: renewals, exclusion of compensation from premium rates, indemnification for errors or omissions of Commission or its contractors
In the administration of this chapter, the Board shall, to the maximum extent possible, (1) establish or use committees or associations of producers and make payments to them to cover the administrative and program expenses, as determined by the Board, incurred by them in cooperating in carrying out this chapter, (2) contract with private insurance companies, private rating bureaus, and other organizations as appropriate for actuarial, loss adjustment, and other services to avoid duplication by the Federal Government of services that are or may readily be available in the private sector, and reimburse such companies for the administrative and program expenses, as determined by the Board, incurred by them, under terms and provisions and rates of compensation consistent with those generally prevailing in the insurance industry, and (3) encourage the sale of Federal crop insurance through licensed private insurance agents and brokers and give the insured the right to renew such insurance for successive terms through such agents and brokers, in which case the agent or broker shall be reasonably compensated from premiums paid by the insured for such sales and renewals recognizing the function of the agent or broker to provide continuing services while the insurance is in effect: Provided, That such compensation shall not be included in computations establishing premium rates. The Board shall provide such agents and brokers with indemnification, including costs and reasonable attorney fees, from the Corporation for errors or omissions on the part of the Corporation or its contractors for which the agent or broker is sued or held liable, except to the extent the agent or broker has caused the error or omission. Nothing in this subsection shall permit the Corporation to contract with other persons to carry out the responsibility of the Corporation to review and approve policies, rates, and other materials submitted under
(d) Allotment of funds to Federal and State agencies
The Secretary may allot to bureaus and offices of the Department or transfer to such other agencies of the State and Federal Governments that the Secretary requests to assist in carrying out this chapter any funds made available pursuant to the provisions of
(e) Utilization of producer cooperative associations
In carrying out the provisions of this chapter the Board may, in its discretion, utilize producer-owned and producer-controlled cooperative associations.
(f) Use of resources, data, boards, and committees of Federal agencies
The Board should use, to the maximum extent possible, the resources, data, boards, and the committees of (1) the Soil Conservation Service, in assisting the Board in the classification of land as to risk and production capability and in the development of acceptable conservation practices; (2) the Forest Service, in assisting the Board in the development of a timber insurance plan; (3) the Agricultural Stabilization and Conservation Service, in assisting the Board in the determination of individual producer yields and in serving as a local contact point for farmers where the Board deems necessary; and (4) other Federal agencies in any way the Board deems necessary in carrying out this chapter.
(g) Specialty Crops Coordinator
(1) The Corporation shall establish a management-level position to be known as the Specialty Crops Coordinator.
(2) The Specialty Crops Coordinator shall have primary responsibility for addressing the needs of specialty crop producers, and for providing information and advice, in connection with the activities of the Corporation to improve and expand the insurance program for specialty crops. In carrying out this paragraph, the Specialty Crops Coordinator shall act as the liaison of the Corporation with representatives of specialty crop producers and assist the Corporation with the knowledge, expertise, and familiarity of the producers with risk management and production issues pertaining to specialty crops.
(3) The Specialty Crops Coordinator shall use information collected from Corporation field office directors in States in which specialty crops have a significant economic effect and from other sources, including the extension service and colleges and universities.
(Feb. 16, 1938, ch. 30, title V, §507,
References in Text
The civil-service laws, referred to in subsec. (a), are set out in Title 5, Government Organization and Employees. See, particularly
In subsec. (a), "
Provisions that authorized personnel paid by the hour, day, or month when actually employed, and county crop insurance committeemen to have their compensation fixed without regard to "the Classification Act of 1923, as amended" were omitted as obsolete. Sections 1202 and 1204 of the Classification Act of 1949,
In subsec. (b), reference to "subchapter I of
Amendments
1994—Subsec. (a).
Subsec. (c).
Subsec. (d).
Subsec. (g).
1991—Subsec. (c).
1990—Subsec. (c).
1980—Subsec. (c).
Subsec. (f).
1972—Subsec. (a).
1949—Act Oct. 28, 1949, substituted "Classification Act of 1949" for "Classification Act of 1923".
Act Aug. 25, 1949, inserted requirement that officers and employees be appointed subject to civil service laws and regulations, and exempted personnel paid by hour, day, or month when employed, and county crop-insurance committeemen from civil-service laws and regulations or the Classification Act of 1923.
1947—Act Aug. 1, 1947, provided for selection and designation of county employees and agencies and their direct responsibility.
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Repeals
Act Oct. 29, 1949, ch. 782, cited as a credit to this section, was repealed (subject to a savings clause) by
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1508. Crop insurance
(a) Authority to offer insurance
(1) In general
If sufficient actuarial data are available (as determined by the Corporation), the Corporation may insure, or provide reinsurance for insurers of, producers of agricultural commodities grown in the United States under 1 or more plans of insurance determined by the Corporation to be adapted to the agricultural commodity concerned. To qualify for coverage under a plan of insurance, the losses of the insured commodity must be due to drought, flood, or other natural disaster (as determined by the Secretary).
(2) Period
Except in the cases of tobacco and potatoes, insurance shall not extend beyond the period during which the insured commodity is in the field. As used in the preceding sentence, in the case of an aquacultural species, the term "field" means the environment in which the commodity is produced.
(3) Exclusions
Insurance provided under this subsection shall not cover losses due to—
(A) the neglect or malfeasance of the producer;
(B) the failure of the producer to reseed to the same crop in such areas and under such circumstances as it is customary to reseed; or
(C) the failure of the producer to follow good farming practices (as determined by the Secretary).
(4) Expansion to other areas or single producers
(A) Area expansion
The Corporation may offer plans of insurance or reinsurance for production of agricultural commodities in the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau in the same manner as provided in this section for production of agricultural commodities in the United States.
(B) Producer expansion
In an area in the United States or specified in subparagraph (A) where crop insurance is not available for a particular agricultural commodity, the Corporation may offer to enter into a written agreement with an individual producer operating in the area for insurance coverage under this chapter if the producer has actuarially sound data relating to the production by the producer of the commodity and the data is acceptable to the Corporation.
(5) Dissemination of crop insurance information
The Corporation shall make available to producers through local offices of the Department—
(A) current and complete information on all aspects of Federal crop insurance; and
(B) a listing of insurance agents and companies offering to sell crop insurance in the area of the producers.
(6) Addition of new and specialty crops
(A) Data collection
Not later than 180 days after October 13, 1994, the Secretary shall issue guidelines for publication in the Federal Register for data collection to assist the Corporation in formulating crop insurance policies for new and specialty crops.
(B) Addition of new crops
Not later than 1 year after October 13, 1994, and annually thereafter, the Corporation shall report to Congress on the progress and expected timetable for expanding crop insurance coverage under this chapter to new and specialty crops.
(C) Addition of direct sale perishable crops
Not later than 1 year after October 13, 1994, the Corporation shall report to Congress on the feasibility of offering a crop insurance program designed to meet the needs of specialized producers of vegetables and other perishable crops who market through direct marketing channels.
(D) Addition of nursery crops
Not later than 2 years after April 4, 1996, the Corporation shall conduct a study and limited pilot program on the feasibility of insuring nursery crops.
(b) Catastrophic risk protection
(1) In general
The Corporation shall offer a catastrophic risk protection plan to indemnify producers for crop loss due to loss of yield or prevented planting, if provided by the Corporation, when the producer is unable, because of drought, flood, or other natural disaster (as determined by the Secretary), to plant other crops for harvest on the acreage for the crop year.
(2) Amount of coverage
(A) In general
Subject to subparagraph (B)—
(i) in the case of each of the 1995 through 1998 crop years, catastrophic risk protection shall offer a producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 60 percent of the expected market price, or a comparable coverage (as determined by the Corporation); and
(ii) in the case of each of the 1999 and subsequent crop years, catastrophic risk protection shall offer a producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 55 percent of the expected market price, or a comparable coverage (as determined by the Corporation).
(B) Reduction in actual payment
The amount paid to a producer on a claim under catastrophic risk protection may reflect a reduction that is proportional to the out-of-pocket expenses that are not incurred by the producer as a result of not planting, growing, or harvesting the crop for which the claim is made, as determined by the Corporation.
(3) Yield and loss basis
A producer shall have the option of basing the catastrophic coverage of the producer on an individual yield and loss basis or on an area yield and loss basis, if both options are offered by the Corporation.
(4) Sale of catastrophic risk coverage
(A) In general
Catastrophic risk coverage may be offered by—
(i) approved insurance providers, if available in an area; and
(ii) at the option of the Secretary that is based on considerations of need, local offices of the Department.
(B) Need
For purposes of considering need under subparagraph (A)(ii), the Secretary may take into account the most efficient and cost-effective use of resources, the availability of personnel, fairness to local producers, the needs and convenience of local producers, and the availability of private insurance carriers.
(C) Delivery of coverage
(i) In general
In full consultation with approved insurance providers, the Secretary may continue to offer catastrophic risk protection in a State (or a portion of a State) through local offices of the Department if the Secretary determines that there is an insufficient number of approved insurance providers operating in the State or portion of the State to adequately provide catastrophic risk protection coverage to producers.
(ii) Coverage by approved insurance providers
To the extent that catastrophic risk protection coverage by approved insurance providers is sufficiently available in a State (or a portion of a State) as determined by the Secretary, only approved insurance providers may provide the coverage in the State or portion of the State.
(iii) Timing of determinations
Not later than 90 days after April 4, 1996, the Secretary shall announce the results of the determinations under clause (i) for policies for the 1997 crop year. For subsequent crop years, the Secretary shall make the announcement not later than April 30 of the year preceding the year in which the crop will be produced, or at such other times during the year as the Secretary finds practicable in consultation with affected crop insurance providers for those States (or portions of States) in which catastrophic coverage remains available through local offices of the Department.
(iv) Current policies
This clause shall take effect beginning with the 1997 crop year. Subject to clause (ii) all catastrophic risk protection policies written by local offices of the Department shall be transferred to the approved insurance provider for performance of all sales, service, and loss adjustment functions. Any fees in connection with such policies that are not yet collected at the time of the transfer shall be payable to the approved insurance providers assuming the policies. The transfer process for policies for the 1997 crop year with sales closing dates before January 1, 1997, shall begin at the time of the Secretary's announcement under clause (iii) and be completed by the sales closing date for the crop and county. The transfer process for all subsequent policies (including policies for the 1998 and subsequent crop years) shall begin at a date that permits the process to be completed not later than 45 days before the sales closing date.
(5) Administrative fee
(A) Basic fee
Each producer shall pay an administrative fee for catastrophic risk protection in an amount equal to 10 percent of the premium for the catastrophic risk protection or $50 per crop per county, whichever is greater, as determined by the Corporation.
(B) Additional fee
In addition to the amount required under subparagraph (A), the producer shall pay a $10 fee for each amount determined under subparagraph (A).
(C) Time for payment
The amounts required under subparagraphs (A) and (B) shall be paid by the producer on the date that premium for a policy of additional coverage would be paid by the producer.
(D) Use of fees
(i) In general
The amounts paid under this paragraph shall be deposited in the crop insurance fund established under
(ii) Limitation
No funds deposited in the crop insurance fund under this subparagraph may be used to compensate an approved insurance provider or agent for the delivery of services under this subsection.
(E) Waiver of fee
The Corporation shall waive the amounts required under this paragraph for limited resource farmers, as defined by the Corporation.
(6) Participation requirement
A producer may obtain catastrophic risk coverage for a crop of the producer on land in the county only if the producer obtains the coverage for the crop on all insurable land of the producer in the county.
(7) Eligibility for Department programs
(A) In general
Effective for the spring-planted 1996 and subsequent crops (and fall-planted 1996 crops at the option of the Secretary), to be eligible for any payment or loan under the Agricultural Market Transition Act [
(i) obtain at least the catastrophic level of insurance for each crop of economic significance in which the person has an interest; or
(ii) provide a written waiver to the Secretary that waives any eligibility for emergency crop loss assistance in connection with the crop.
(B) "Crop of economic significance" defined
As used in this paragraph, the term "crop of economic significance" means a crop that has contributed, or is expected to contribute, 10 percent or more of the total expected value of all crops grown by the producer.
(8) Limitation due to risk
The Corporation may limit catastrophic risk coverage in any county or area, or on any farm, on the basis of the insurance risk concerned.
(9) Transitional coverage for 1995 crops
Effective only for a 1995 crop planted or for which insurance attached prior to January 1, 1995, the Corporation shall allow producers of the crops until not later than the end of the 180-day period beginning on the date of enactment of the Federal Crop Insurance Reform Act of 1994 [Oct. 13, 1994] to obtain catastrophic risk protection for the crop. On enactment of such Act, a producer who made timely purchases of a crop insurance policy before the date of enactment of such Act, under the provisions of this chapter then in effect, shall be eligible for the same benefits to which a producer would be entitled under comparable additional coverage under subsection (c) of this section.
(10) Simplification
(A) Catastrophic risk protection plans
In developing and carrying out the policies and procedures for a catastrophic risk protection plan under this chapter, the Corporation shall, to the maximum extent practicable, minimize the paperwork required and the complexity and costs of procedures governing applications for, processing, and servicing of the plan for all parties involved.
(B) Other plans
To the extent that the policies and procedures developed under subparagraph (A) may be applied to other plans of insurance offered under this chapter without jeopardizing the actuarial soundness or integrity of the crop insurance program, the Corporation shall apply the policies and procedures to the other plans of insurance within a reasonable period of time (as determined by the Corporation) after the effective date of this paragraph.
(11) Loss adjustment
The rate for reimbursing an approved insurance provider or agent for expenses incurred by the approved insurance provider or agent for loss adjustment in connection with a policy of catastrophic risk protection shall not exceed 11 percent of the premium for catastrophic risk protection that is used to define loss ratio.
(c) General coverage levels
(1) Additional coverage generally
(A) In general
The Corporation shall offer to producers of agricultural commodities grown in the United States plans of crop insurance that provide additional coverage.
(B) Purchase
To be eligible for additional coverage, a producer must apply to an approved insurance provider for purchase of additional coverage if the coverage is available from an approved insurance provider. If additional coverage is unavailable privately, the Corporation may offer additional coverage plans of insurance directly to producers.
(2) Transfer of relevant information
If a producer has already applied for catastrophic risk protection at the local office of the Department and elects to purchase additional coverage, the relevant information for the crop of the producer shall be transferred to the approved insurance provider servicing the additional coverage crop policy.
(3) Yield and loss basis
A producer shall have the option of purchasing additional coverage based on an individual yield and loss basis or on an area yield and loss basis, if both options are offered by the Corporation.
(4) Level of coverage
The level of coverage shall be dollar denominated and may be purchased at any level not to exceed 85 percent of the individual yield or 95 percent of the area yield (as determined by the Corporation). Not later than the beginning of the 1996 crop year, the Corporation shall provide producers with information on catastrophic risk and additional coverage in terms of dollar coverage (within the allowable limits of coverage provided in this paragraph).
(5) Price level
The Corporation shall establish a price level for each commodity on which insurance is offered that—
(A) shall not be less than the projected market price for the commodity (as determined by the Corporation); or
(B) at the discretion of the Corporation, may be based on the actual market price at the time of harvest (as determined by the Corporation).
(6) Price elections
(A) In general
Subject to subparagraph (B), insurance coverage shall be made available to a producer on the basis of any price election that equals or is less than the price election established by the Corporation. The coverage shall be quoted in terms of dollars per acre.
(B) Minimum price elections
The Corporation may establish minimum price elections below which levels of insurance shall not be offered.
(C) Wheat classes and malting barley
The Corporation shall, as the Corporation determines practicable, offer producers different price elections for classes of wheat and malting barley (including contract prices in the case of malting barley), in addition to the standard price election, that reflect different market prices, as determined by the Corporation. The Corporation shall, as the Corporation determines practicable, offer additional coverage for each class determined under this subparagraph and charge a premium for each class that is actuarially sound.
(7) Fire and hail coverage
For levels of additional coverage equal to 65 percent or more of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, a producer may elect to delete from the additional coverage any coverage against damage caused by fire and hail if the producer obtains an equivalent or greater dollar amount of coverage for damage caused by fire and hail from an approved insurance provider. On written notice of the election to the company issuing the policy providing additional coverage and submission of evidence of substitute coverage on the commodity insured, the premium of the producer shall be reduced by an amount determined by the Corporation to be actuarially appropriate, taking into account the actuarial value of the remaining coverage provided by the Corporation. In no event shall the producer be given credit for an amount of premium determined to be greater than the actuarial value of the protection against losses caused by fire and hail that is included in the additional coverage for the crop.
(8) State premium subsidies
The Corporation may enter into an agreement with any State or agency of a State under which the State or agency may pay to the approved insurance provider an additional premium subsidy to further reduce the portion of the premium paid by producers in the State.
(9) Limitations on additional coverage
The Board may limit the availability of additional coverage under this subsection in any county or area, or on any farm, on the basis of the insurance risk involved. The Board shall not offer additional coverage equal to less than 50 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage.
(10) Administrative fee
(A) Fee required
Except as otherwise provided in this paragraph, if a producer elects to purchase additional coverage for a crop at a level that is less than 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the producer shall pay an administrative fee for the additional coverage. The administrative fee for the producer shall be $50 per crop per county, but not to exceed $200 per producer per county, up to a maximum of $600 per producer for all counties in which a producer has insured crops. Subparagraphs (D) and (E) of subsection (b)(5) of this section shall apply with respect to the use of administrative fees under this subparagraph.
(B) Exception
If a producer elects to purchase additional coverage for a crop equal to 65 percent or more of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the producer shall not be subject to the administrative fee required by this paragraph or subsection (b)(5) of this section. If the producer has already paid the administrative fee for a lower level of coverage for the crop, the administrative fee shall be refunded to the producer unless the refund would reduce to less than $200 the total amount of the administrative fees paid by the producer for 2 or more crops in the same county for which a lower level of coverage is obtained.
(C) Additional fee
If a producer elects to purchase additional coverage for a crop equal to or exceeding 65 percent of the recorded or appraised average yield and 100 percent of the expected market price or an equivalent coverage, the producer shall pay an administrative fee of $20 for the coverage. If a producer has already paid an administrative fee for lesser coverage for the crop, the fee for lesser coverage shall be refunded to the producer unless the producer has paid the maximum fee for lesser coverage and refund of the fee will not reduce the amount to be paid below the maximum amount.
(D) Deposit of fees
Notwithstanding the authority granted to the Secretary under the Federal Crop Insurance Corporation account provisions of the Agricultural, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1995, administrative fees collected under subparagraph (B) in excess of $100 per producer per county and under subparagraph (C) shall be deposited in the insurance fund established under
(d) Premiums
(1) Premiums required
The Corporation shall fix adequate premiums for all the plans of insurance of the Corporation at such rates as the Board determines are actuarially sufficient to attain an expected loss ratio of not greater than 1.1 through September 30, 1998, and not greater than 1.075 after October 1, 1998.
(2) Premium amounts
The premium amounts for catastrophic risk protection under subsection (b) of this section and additional coverage under subsection (c) of this section shall be fixed as follows:
(A) In the case of catastrophic risk protection, the amount of the premium shall be sufficient to cover anticipated losses and a reasonable reserve.
(B) In the case of additional coverage below 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, but greater than 50 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the amount of the premium shall—
(i) be sufficient to cover anticipated losses and a reasonable reserve; and
(ii) include an amount for operating and administrative expenses, as determined by the Corporation.
(C) In the case of additional coverage equal to or greater than 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the amount of the premium shall—
(i) be sufficient to cover anticipated losses and a reasonable reserve; and
(ii) include an amount for operating and administrative expenses, as determined by the Corporation, on an industry-wide basis as a percentage of the amount of the premium used to define loss ratio.
(e) Payment of portion of premium by Corporation
(1) In general
For the purpose of encouraging the broadest possible participation of producers in the catastrophic risk protection provided under subsection (b) of this section and the additional coverage provided under subsection (c) of this section, the Corporation shall pay a part of the premium in the amounts provided in accordance with this subsection.
(2) Amount of payment
The amount of the premium to be paid by the Corporation shall be as follows:
(A) In the case of catastrophic risk protection, the amount shall be equivalent to the premium established for catastrophic risk protection under subsection (d)(2)(A) of this section.
(B) In the case of coverage below 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, but greater than 50 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the amount shall be equivalent to the amount of premium established for catastrophic risk protection coverage and the amount of operating and administrative expenses established under subsection (d)(2)(B) of this section.
(C) In the case of coverage equal to or greater than 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, on an individual or area basis, the amount shall be equivalent to an amount equal to the premium established for 50 percent loss in yield indemnified at 75 percent of the expected market price and the amount of operating and administrative expenses established under subsection (d)(2)(C) of this section.
(3) Premium reduction
If an approved insurance provider determines that the provider may provide insurance more efficiently than the expense reimbursement amount established by the Corporation, the approved insurance provider may reduce, subject to the approval of the Corporation, the premium charged the insured by an amount corresponding to the efficiency. The approved insurance provider shall apply to the Corporation for authority to reduce the premium before making such a reduction, and the reduction shall be subject to the rules, limitations, and procedures established by the Corporation.
(4) Individual and area crop insurance coverage
The Corporation shall allow approved insurance providers to offer a plan of insurance to producers that combines both individual yield coverage and area yield coverage at a premium rate determined by the provider under the following conditions:
(A) The individual yield coverage shall be equal to or greater than catastrophic risk protection as described in subsection (b) of this section.
(B) The combined policy shall include area yield coverage that is offered by the Corporation or similar area coverage, as determined by the Corporation.
(C) The Corporation shall provide reinsurance on the area yield portion of the combined policy at the request of the provider, except that the provider shall agree to pay to the producer any portion of the area yield and loss indemnity payment received from the Corporation or a commercial reinsurer that exceeds the individual indemnity payment made by the provider to the producer.
(D) The Corporation shall pay a part of the premium equivalent to—
(i) the amount authorized under paragraph (2) (except provisions regarding operating and administrative expenses); and
(ii) the amount of operating and administrative expenses authorized by the Corporation for the area yield coverage portion of the combined policy.
(E) The provider shall provide all underwriting services for the combined policy, including the determination of individual yield coverage premium rates, the terms and conditions of the policy, and the acceptance and classification of applicants into risk categories, subject to subparagraph (F).
(F) The Corporation shall approve the combined policy unless the Corporation determines that the policy is not actuarially sound or that the interests of producers are not adequately protected.
(f) Eligibility
(1) In general
To participate in catastrophic risk protection coverage under this section, a producer shall submit an application at the local office of the Department or to an approved insurance provider.
(2) Sales closing date
(A) In general
For coverage under this chapter, each producer shall purchase crop insurance on or before the sales closing date for the crop by providing the required information and executing the required documents. Subject to the goal of ensuring actuarial soundness for the crop insurance program, the sales closing date shall be established by the Corporation to maximize convenience to producers in obtaining benefits under price and production adjustment programs of the Department.
(B) Established dates
Except as provided in subparagraph (C), the Corporation shall establish, for an insurance policy for each insurable crop that is planted in the spring, a sales closing date that is 30 days earlier than the corresponding sales closing date that was established for the 1994 crop year.
(C) Exception
If compliance with subparagraph (B) results in a sales closing date for an agricultural commodity that is earlier than January 31, the sales closing date for that commodity shall be January 31 beginning with the 2000 crop year.
(3) Records and reporting
To obtain catastrophic risk protection under subsection (b) of this section or additional coverage under subsection (c) of this section, a producer shall—
(A) provide, to the extent required by the Corporation, records acceptable to the Corporation of historical acreage and production of the crops for which the insurance is sought or accept a yield determined by the Corporation; and
(B) report acreage planted and prevented from planting by the designated acreage reporting date for the crop and location as established by the Corporation.
(g) Yield determinations
(1) In general
Subject to paragraph (2), the Corporation shall establish crop insurance underwriting rules that ensure that yield coverage, as specified in this subsection, is provided to eligible producers obtaining catastrophic risk protection under subsection (b) of this section or additional coverage under subsection (c) of this section.
(2) Yield coverage plans
(A) Actual production history
Subject to subparagraph (B), the yield for a crop shall be based on the actual production history for the crop, if the crop was produced on the farm without penalty during each of the 4 crop years immediately preceding the crop year for which actual production history is being established, building up to a production data base for each of the 10 consecutive crop years preceding the crop year for which actual production history is being established.
(B) Assigned yield
If the producer does not provide satisfactory evidence of the yield of a commodity under subparagraph (A), the producer shall be assigned a yield that is not less than 65 percent of the transitional yield of the producer (adjusted to reflect actual production reflected in the records acceptable to the Corporation for continuous years), as specified in regulations issued by the Corporation based on production history requirements.
(C) Area yield
The Corporation may offer a crop insurance plan based on an area yield that allows an insured producer to qualify for an indemnity if a loss has occurred in an area (as specified by the Corporation) in which the farm of the producer is located. Under an area yield plan, an insured producer shall be allowed to select the level of area production at which an indemnity will be paid consistent with such terms and conditions as are established by the Corporation.
(D) Commodity-by-commodity basis
A producer may choose between individual yield or area yield coverage or combined coverage (as provided in subsection (e)(4) of this section), if available, on a commodity-by-commodity basis.
(3) Transitional yields for producers of feed or forage
(A) In general
If a producer does not provide satisfactory evidence of a yield under paragraph (2)(A), the producer shall be assigned a yield that is at least 80 percent of the transitional yield established by the Corporation (adjusted to reflect the actual production history of the producer) if the Secretary determines that—
(i) the producer grows feed or forage primarily for on-farm use in a livestock, dairy, or poultry operation; and
(ii) over 50 percent of the net farm income of the producer is derived from the operation.
(B) Yield calculation
The Corporation shall—
(i) for the first year of participation of a producer, provide the assigned yield under this paragraph to the producer of feed or forage; and
(ii) for the second year of participation of the producer, apply the actual production history or assigned yield requirement, as provided in this subsection.
(C) Termination of authority
The authority provided by this paragraph shall terminate on the date that is 3 years after the effective date of this paragraph.
(h) Submission of policies and materials to Board
(1) In general
In addition to any standard forms or policies that the Board may require be made available to producers under subsection (c) of this section, a person may prepare for submission or propose to the Board—
(A) other crop insurance policies and provisions of policies; and
(B) rates of premiums for multiple peril crop insurance pertaining to wheat, soybeans, field corn, and any other crops determined by the Secretary.
(2) Submission of policies
A policy or other material submitted to the Board under this subsection may be prepared without regard to the limitations contained in this chapter, including the requirements concerning the levels of coverage and rates and the requirement that a price level for each commodity insured must equal the expected market price for the commodity as established by the Board. In the case of such a policy, the payment by the Corporation of a portion of the premium of the policy may not exceed the amount that would otherwise be authorized under subsection (e) of this section.
(3) Review and approval by the Board
A policy or other material submitted to the Board under this subsection shall be reviewed by the Board and, if the Board finds that the interests of producers are adequately protected and that any premiums charged to the producers are actuarially appropriate, shall be approved by the Board for reinsurance and for sale to producers as an additional choice at actuarially appropriate rates and under appropriate terms and conditions. The Corporation may enter into more than 1 reinsurance agreement with the approved insurance provider simultaneously to facilitate the offering of the new policies.
(4) Guidelines for submission and review
The Corporation shall issue regulations to establish guidelines for the submission, and Board review, of policies or other material submitted to the Board under this subsection. At a minimum, the guidelines shall ensure the following:
(A) A proposal submitted to the Board under this subsection shall be considered as confidential commercial or financial information for purposes of
(B) The Board shall provide an applicant with the opportunity to present the proposal to the Board in person if the applicant so desires.
(C) The Board shall provide an applicant with notification of intent to disapprove a proposal not later than 30 days prior to making the disapproval. An applicant that receives the notification may modify the application of the applicant. Any modification shall be considered an original application for purposes of this paragraph.
(D) Specific guidelines shall prescribe the timing of submission of proposals under this subsection and timely consideration by the Board so that any approved proposal may be made available to all persons reinsured by the Corporation in a manner permitting the persons to participate, if the persons so desire, in offering such a proposal in the first crop year in which the proposal is approved by the Board for reinsurance, premium subsidy, or other support offered by this chapter.
(5) Required publication
Any policy, provision of a policy, or rate approved under this subsection shall be published as a notice in the Federal Register and made available to all persons contracting with or reinsured by the Corporation under the terms and conditions of the contract between the Corporation and the person originally submitting the policy or other material.
(6) Pilot cost of production risk protection plan
(A) In general
The Corporation shall offer, to the extent practicable, a cost of production risk protection plan of insurance that indemnifies producers (including new producers) for insurable losses as provided in this paragraph.
(B) Pilot basis
The cost of production risk protection plan shall—
(i) be established as a pilot project for each of the 1996 and 1997 crop years; and
(ii) be carried out in a number of counties that is determined by the Corporation to be adequate to provide a comprehensive evaluation of the feasibility, effectiveness, and demand among producers for the plan.
(C) Insurable loss
An insurable loss shall be incurred by a producer if the gross income of the producer (as determined by the Corporation) is less than an amount determined by the Corporation, as a result of a reduction in yield or price resulting from an insured cause.
(D) "New producer" defined
As used in this paragraph, the term "new producer" means a person that has not been actively engaged in farming for a share of the production of the insured crop for more than 2 crop years, as determined by the Secretary.
(7) Additional prevented planting policy coverage
(A) In general
Beginning with the 1995 crop year, the Corporation shall offer to producers additional prevented planting coverage that insures producers against losses in accordance with this paragraph.
(B) Approved insurance providers
Additional prevented planting coverage shall be offered by the Corporation through approved insurance providers.
(C) Timing of loss
A crop loss shall be covered by the additional prevented planting coverage if—
(i) crop insurance policies were obtained for—
(I) the crop year the loss was experienced; and
(II) the crop year immediately preceding the year of the prevented planting loss; and
(ii) the cause of the loss occurred—
(I) after the sales closing date for the crop in the crop year immediately preceding the loss; and
(II) before the sales closing date for the crop in the year in which the loss is experienced.
(8) Pilot program of assigned yields for new producers
(A) Program required
For each of the 1995 and 1996 crop years, the Corporation shall carry out a pilot program to assign to eligible new producers higher assigned yields than would otherwise be assigned to the producers under subsection (g) of this section. The Corporation shall include in the pilot program 30 counties that are determined by the Corporation to be adequate to provide a comprehensive evaluation of the feasibility, effectiveness, and demand among new producers for increased assigned yields.
(B) Increased assigned yields
In the case of an eligible new producer participating in the pilot program, the Corporation shall assign to the new producer a yield that is equal to not less than 110 percent of the transitional yield otherwise established by the Corporation.
(C) Eligible new producer
The Secretary shall establish a definition of new producer for purposes of determining eligibility to participate in the pilot program.
(9) Revenue insurance pilot program
(A) In general
Not later than December 31, 1996, the Secretary shall carry out a pilot program in a limited number of counties, as determined by the Secretary, for crop years 1997 through 2001, under which a producer of wheat, feed grains, soybeans, or such other commodity as the Secretary considers appropriate may elect to receive insurance against loss of revenue, as determined by the Secretary.
(B) Administration
Revenue insurance under this paragraph shall—
(i) be offered through reinsurance arrangements with private insurance companies;
(ii) offer at least a minimum level of coverage that is an alternative to catastrophic crop insurance;
(iii) be actuarially sound; and
(iv) require the payment of premiums and administrative fees by an insured producer.
(10) Time limits for response to submission of new policies
(A) In general
The Board shall establish a reasonable time period within which the Board shall approve or disapprove a proposal from a person regarding a new policy submitted in accordance with this subsection.
(B) Effect of failure to meet time limits
Except as provided in subparagraph (C), if the Board fails to provide a response to a proposal described in subparagraph (A) in accordance with subparagraph (A), the new policy shall be deemed to be approved by the Board for purposes of this subsection for the initial reinsurance year designated for the new policy in the request.
(C) Exceptions
Subparagraph (B) shall not apply to a proposal submitted under this subsection if the Board and the person submitting the request agree to an extension of the time period.
(i) Adoption of rates and coverages
The Corporation shall adopt, as soon as practicable, rates and coverages that will improve the actuarial soundness of the insurance operations of the Corporation for those crops that are determined to be insured at rates that are not actuarially sound, except that no rate may be increased by an amount of more than 20 percent over the comparable rate of the preceding crop year.
(j) Claims for losses
(1) In general
Under rules prescribed by the Corporation, the Corporation may provide for adjustment and payment of claims for losses. The rules prescribed by the Corporation shall establish standards to ensure that all claims for losses are adjusted, to the extent practicable, in a uniform and timely manner.
(2) Denial of claims
(A) In general
Subject to subparagraph (B), if a claim for indemnity is denied by the Corporation or an approved provider, an action on the claim may be brought against the Corporation or Secretary only in the United States district court for the district in which the insured farm is located.
(B) Statute of limitations
A suit on the claim may be brought not later than 1 year after the date on which final notice of denial of the claim is provided to the claimant.
(3) Indemnification
The Corporation shall provide approved insurance providers with indemnification, including costs and reasonable attorney fees incurred by the approved insurance provider, due to errors or omissions on the part of the Corporation.
(4) Marketing windows
The Corporation shall consider marketing windows in determining whether it is feasible to require planting during a crop year.
(k) Reinsurance
(1) In general
Notwithstanding any other provision of this chapter, the Corporation shall, to the maximum extent practicable, provide reinsurance to insurers approved by the Corporation that insure producers of any agricultural commodity under 1 or more plans acceptable to the Corporation.
(2) Terms and conditions
The reinsurance shall be provided on such terms and conditions as the Board may determine to be consistent with subsections (b) and (c) of this section and sound reinsurance principles.
(3) Share of risk
The reinsurance agreements of the Corporation with the reinsured companies shall require the reinsured companies to bear a sufficient share of any potential loss under the agreement so as to ensure that the reinsured company will sell and service policies of insurance in a sound and prudent manner, taking into consideration the financial condition of the reinsured companies and the availability of private reinsurance.
(4) Rate
(A) In general
Except as provided in subparagraph (B), the rate established by the Board to reimburse approved insurance providers and agents for the administrative and operating costs of the providers and agents shall not exceed—
(i) for the 1998 reinsurance year, 27 percent of the premium used to define loss ratio; and
(ii) for each of the 1999 and subsequent reinsurance years, 24.5 percent of the premium used to define loss ratio.
(B) Proportional reductions
A policy of additional coverage that received a rate of reimbursement for administrative and operating costs for the 1998 reinsurance year that is lower than the rate specified in subparagraph (A)(i) shall receive a reduction in the rate of reimbursement that is proportional to the reduction in the rate of reimbursement between clauses (i) and (ii) of subparagraph (A).
(5) Cost and regulatory reduction
Consistent with section 118 of the Federal Crop Insurance Reform Act of 1994, and consistent with maintenance of program integrity, prevention of fraud and abuse, the need for program expansion, and improvement of quality of service to customers, the Board shall alter program procedures and administrative requirements in order to reduce the administrative and operating costs of approved insurance providers and agents in an amount that corresponds to any reduction in the reimbursement rate required under paragraph (4) during the 5-year period beginning on October 13, 1994.
(6) Agency discretion
The determination of whether the Corporation is achieving, or has achieved, corresponding administrative cost savings shall not be subject to administrative review, and is wholly committed to agency discretion within the meaning of
(7) Plan
The Corporation shall submit to Congress a plan outlining the measures that will be used to achieve the reduction required under paragraph (5). If the Corporation can identify additional cost reduction measures, the Corporation shall describe the measures in the plan.
(l) Optional coverages
The Corporation may offer specific risk protection programs, including protection against prevented planting, wildlife depredation, tree damage and disease, and insect infestation, under such terms and conditions as the Board may determine, except that no program may be undertaken if insurance for the specific risk involved is generally available from private companies.
(m) Research
(1) In general
Except as provided in paragraph (2), the Corporation may conduct research, surveys, pilot programs, and investigations relating to crop insurance and agriculture-related risks and losses including insurance on losses involving reduced forage on rangeland caused by drought and by insect infestation, livestock poisoning and disease, destruction of bees due to the use of pesticides, and other unique special risks related to fruits, nuts, vegetables, aquacultural species, forest industry needs (including appreciation), and other agricultural products as determined by the Board.
(2) Exception
No action may be undertaken with respect to a risk under paragraph (1) if insurance protection against the risk is generally available from private companies.
(3) Evaluation
After the completion of any pilot program under this subsection, the Corporation shall evaluate the pilot program and submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, a report of the operations of the pilot program, including the evaluation by the Corporation of the pilot program and the recommendations of the Corporation with respect to implementing the program on a national basis.
(n) Limitation on multiple benefits for same loss
(1) In general
Except as provided in paragraph (2), if a producer who is eligible to receive benefits under catastrophic risk protection under subsection (b) of this section is also eligible to receive assistance for the same loss under any other program administered by the Secretary, the producer shall be required to elect whether to receive benefits under this chapter or under the other program, but not both. A producer who purchases additional coverage under subsection (c) of this section may also receive assistance for the same loss under other programs administered by the Secretary, except that the amount received for the loss under the additional coverage together with the amount received under the other programs may not exceed the amount of the actual loss of the producer.
(2) Exception
Paragraph (1) shall not apply to emergency loans under subtitle C of the Consolidated Farm and Rural Development Act (
(Feb. 16, 1938, ch. 30, title V, §508,
References in Text
The Agricultural Market Transition Act, referred to in subsec. (b)(7)(A), is title I of
For the effective date of this paragraph, referred to in subsecs. (b)(10)(B) and (g)(3)(C), as being Oct. 13, 1994, see Effective Date of 1994 Amendment note below.
The Agricultural, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1995, referred to in subsec. (c)(10)(D), is
Section 118 of the Federal Crop Insurance Reform Act of 1994, referred to in subsec. (k)(5), is section 118 of
The Consolidated Farm and Rural Development Act, referred to in subsec. (n)(2), is title III of
Amendments
1999—Subsec. (f)(2).
Subsec. (h)(9)(A).
1998—Subsec. (b)(5).
Subsec. (b)(11).
Subsec. (c)(10)(A).
Subsec. (c)(10)(C).
Subsec. (h)(10).
Subsec. (k)(4).
"(A) for the 1997 reinsurance year, 29 percent of the premium used to define loss ratio;
"(B) for the 1998 reinsurance year, 28 percent of the premium used to define loss ratio; and
"(C) for the 1999 reinsurance year, 27.5 percent of the premium used to define loss ratio."
Subsec. (n).
1996—Subsec. (a)(6)(D).
Subsec. (b)(4)(C).
Subsec. (b)(7)(A).
Subsec. (h)(9).
Subsec. (j)(4).
Subsec. (n).
1994—
1993—Subsec. (h).
Subsec. (n).
1991—Subsec. (a).
Subsecs. (k) to (n).
1990—
Subsec. (a).
Subsecs. (b) to (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsec. (i).
Subsec. (j).
Subsec. (k).
Subsec. (l).
Subsec. (m).
Subsec. (n).
1988—Subsec. (j).
1980—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsecs. (g), (h).
Subsec. (i).
1964—Subsec. (a).
1959—Subsec. (a).
1957—Subsec. (f).
1953—Subsec. (a). Act Aug. 13, 1953, authorized extension of Federal crop insurance program into an additional 100 counties, struck out commodity formula basis on which this expansion may take place, and provided an exception to the strict county limitation by providing that producers on farms situated in a local producing area bordering on a county with a crop insurance program may be included in that county's program.
1949—Subsec. (a). Act Aug. 25, 1949, §1, provided for an annual increase in number of counties in which insurance now offered by Corporation can be issued.
Subsec. (b). Act Aug. 25, 1949, §2, struck out provision under which Corporation's administrative expenses are restricted, after the crop year 1949, to a sum equivalent to 25 percent of the premiums collected in the preceding year.
Subsec. (c). Act Aug. 25, 1949, §3, struck out provision which required prorating of losses beginning with crop year 1950.
1947—Subsec. (a). Act Aug. 1, 1947, §1, amended subsec. (a) generally, and among other changes, provided for crop insurance, commencing with crops planted for harvest in 1948, made provision for reinsurance, enumerated specific crops insurable in 1948, provided for additional crops in subsequent years, limited number of counties in which certain crops were insurable, increased required number of applications in any one county from fifty to two hundred, and authorized Board to refuse insurance in any county where agricultural commodity to be insured constitutes an unimportant part of total agricultural income.
Subsec. (b). Act Aug. 1, 1947, §2, inserted proviso relating to basis for premiums.
Subsec. (c). Act Aug. 1, 1947, §3, inserted first proviso relating to determination of price basis for indemnities.
1944—Subsec. (a). Act Dec. 23, 1944, §1, amended subsec. (a) generally to provide insurance against loss not only for wheat and cotton crops but also for flax, corn, oats, etc.
Subsec. (b). Act Dec. 23, 1944, §2, provided for the establishment of such rates as would cover crop losses and build up a reasonable reserve, and inserted proviso.
Subsec. (c). Act Dec. 23, 1944, §3, inserted first proviso, and inserted "and received" after "mailed to" in last proviso.
1941—Subsec. (a). Act June 21, 1941, §§3–5, struck out comma after "1939" and inserted "and with the cotton crop planted for harvest in 1942", and substituted "producers of the agricultural commodity against loss in yields of the agricultural commodity" for "producers of wheat against loss in yields of wheat" in the first sentence, and "the agricultural commodity" for "wheat" in the third sentence, respectively.
Subsecs. (b), (c). Act June 21, 1941, §6, substituted "the agricultural commodity" for "wheat" wherever appearing.
Subsec. (d). Act June 21, 1941, §§6, 10, substituted "the agricultural commodity" for "wheat" wherever appearing, and inserted second sentence.
Subsec. (e). Act June 21, 1941, §7, added subsec. (e).
1938—Subsec. (a). Act June 22, 1938, inserted second proviso in first sentence.
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1993 Amendment
Amendment by
Effective Date of 1980 Amendment
Section 105 of
Section 106 of
Amendment by section 107(b) of
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
Expansion of Crop Insurance Pilots
Limitation on Fee for Catastrophic Risk Protection
Special Rule for 1996 Crop Year Regarding Catastrophic Risk Protection Insurance
Section 193(a)(3) of
"(A)
"(B)
"(C)
"(D)
"(i) the policy is a continuation of a policy that was obtained for a previous crop year; and
"(ii) the cancellation request is made before the acreage reporting date for the policy for the 1996 crop year."
Crop Insurance Pilot Program
Section 193(b) of
"(1)
"(2)
"(3)
Prevented Planting
Section 116 of
"(a)
"(1) obtaining from the Secretary of Agriculture the applicable amount that is payable under the conserving use program described in subsection (b)(4); and
"(2) obtaining from the Federal Crop Insurance Corporation the amount that is equal to the difference between—
"(A) the amount that is payable under the conserving use program; and
"(B) the amount that is payable under the prevented planting coverage policy.
"(b)
"(1) purchased a prevented planting policy for the 1994 crop year from the Federal Crop Insurance Corporation prior to the spring sales closing date for the 1994 crop year;
"(2) is unable to plant a crop due to major, widespread flooding in the Midwest, or excessive ground moisture, that occurred prior to the spring sales closing date for the 1994 crop year;
"(3) had a reasonable expectation of planting a crop on the prevented planting acreage for the 1994 crop year; and
"(4) participates in a conserving use program established for the 1994 crop of wheat, feed grains, upland cotton, or rice established under section 107B(c)(1)(E), 105B(c)(1)(E), 103B(c)(1)(D), or 101B(c)(1)(D), respectively, of the Agricultural Act of 1949 ([former] 7 U.S.C. 1445b–3a(c)(1)(E), 1444f(c)(1)(E), 1444–2(c)(1)(D), or 1441–2(c)(1)(D)).
"(c)
"(1)
"(2)
"(d)
Report on Improving Dissemination of Crop Insurance Information
Section 117 of
Federal Crop Insurance Commission
Loss Adjustment Obligations
"(1) should not be required to assume 100 percent of all loss adjustments in the Federal crop insurance program; and
"(2) should assume and perform the loss adjustment obligations of a reinsured company if the Corporation determines that such company's loss adjustment performance and practices are not carried out in accordance with the applicable reinsurance agreement."
Notice to Producers of Right To Elect Subsidized Crop Insurance or Disaster Payments on 1981 Crops
Section 202 of
Study of Alternative All-Risk, All-Crop Insurance Programs
Validity and Termination of Prior Insurance Contracts
Section 5 of act Aug. 1, 1947, provided: "Nothing in this Act [amending sections 1502, 1505 (a to d), 1506(d), 1507(d), and 1508 (a to c) of this title] shall be construed to affect the validity of any insurance contract entered into prior to the enactment of this Act [Aug. 1, 1947] insofar as such contract covers the 1947 crop year. Any such contract which purports to cover a crop in the 1948 or any subsequent crop year in any county in which insurance on such crop will be discontinued pursuant to this Act is hereby terminated at the end of the 1947 crop year."
Cross References
Amount in controversy, generally, see
Amount in controversy immaterial in action arising under Act regulating commerce, see
Section Referred to in Other Sections
This section is referred to in
§1508a. Repealed. Pub. L. 103–354, title I, §107, Oct. 13, 1994, 108 Stat. 3197
Section, act Feb. 16, 1938, ch. 30, title V, §508A, as added Aug. 14, 1989,
Effective Date of Repeal
Repeal effective Oct. 13, 1994, and applicable to provision of crop insurance under Federal Crop Insurance Act (
§1509. Exemption of indemnities from levy
Claims for indemnities under this chapter shall not be liable to attachment, levy, garnishment, or any other legal process before payment to the insured or to deduction on account of the indebtedness of the insured or the estate of the insured to the United States except claims of the United States or the Corporation arising under this chapter.
(Feb. 16, 1938, ch. 30, title V, §509,
Amendments
1994—
Effective Date of 1994 Amendment
Amendment by
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
Federal Rules of Civil Procedure
Attachment and garnishment, see rules 64 and 70, Title 28, Appendix, Judiciary and Judicial Procedure.
§1510. Deposit and investment of funds; Federal Reserve banks as fiscal agents
All money of the Corporation not otherwise employed may be deposited with the Treasurer of the United States or in any bank approved by the Secretary of the Treasury, subject to withdrawal by the Corporation at any time, or with the approval of the Secretary of the Treasury may be invested in obligations of the United States or in obligations guaranteed as to principal and interest by the United States. Subject to the approval of the Secretary of the Treasury, the Federal Reserve banks are hereby authorized and directed to act as depositories, custodians, and fiscal agents for the Corporation in the performance of its powers conferred by this chapter.
(Feb. 16, 1938, ch. 30, title V, §510,
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1511. Tax exemption
The Corporation, including its franchise, its capital, reserves, and surplus, and its income and property, shall be exempt from all taxation on or after February 16, 1938, imposed by the United States or by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority. A contract of insurance of the Corporation, and a contract of insurance reinsured by the Corporation, shall be exempt from taxation imposed by any State, municipality, or local taxing authority.
(Feb. 16, 1938, ch. 30, title V, §511,
Amendments
1994—
Effective Date of 1994 Amendment
Amendment by
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1512. Corporation as fiscal agent of Government
When designated for that purpose by the Secretary of the Treasury, the Corporation shall be a depository of public money, except receipts from customs, under such regulations as may be prescribed by said Secretary; and it may also be employed as a financial agent of the Government; and it shall perform all such reasonable duties, as a depository of public money and financial agent of the Government, as may be required of it.
(Feb. 16, 1938, ch. 30, title V, §512,
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1513. Books of account and annual reports of Corporation
The Corporation shall at all times maintain complete and accurate books of accounts and shall file annually with the Secretary a complete report as to the business of the Corporation.
(Feb. 16, 1938, ch. 30, title V, §513,
Amendments
1994—
1975—
Effective Date of 1994 Amendment
Amendment by
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
Audit of Government Corporations
§1514. Crimes and offenses
(a) to (e) Repealed. June 25, 1948, ch. 645, §21, 62 Stat. 862 , eff. Sept. 1, 1948
(f) Application of laws on interest of Members of Congress in contracts
The provisions of
(Feb. 16, 1938, ch. 30, title V, §514,
Amendments
1948—Subsecs. (a) to (e). Act June 25, 1948, §21, repealed provisions relating to crimes and offenses. See sections 371, 433, 657, 658, 1006, 1014, and former
Subsec. (f). Act June 25, 1948, §4, struck out provisions relating to former
Effective Date of 1948 Amendment
Amendment by act June 25, 1948, effective Sept. 1, 1948, see section 20 of that act.
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
§1515. Advisory Committee for Federal Crop Insurance
(a) Establishment
The Secretary may establish within the Department an advisory committee to be known as the "Advisory Committee for Federal Crop Insurance".
(b) Primary responsibility
The primary responsibility of the Advisory Committee shall be to advise the Secretary on the implementation of this chapter and on other issues related to crop insurance, as determined by the Manager of the Corporation.
(c) Membership
The Advisory Committee shall be composed of the Manager of the Corporation, the Secretary (or a designee of the Secretary), and not fewer than 12 members representing organizations and agencies involved in the provision of crop insurance under this chapter. Not fewer than 3 of the members of the Advisory Committee shall be representatives of the specialty crops industry. The organizations or agencies represented by members on the Advisory Committee may include insurance companies, insurance agents, farm producer organizations, experts on agronomic practices, and banking and lending institutions.
(d) Administrative provisions
(1) Terms
Members of the Advisory Committee (other than the Manager of the Corporation and the Secretary) shall be appointed by the Secretary for a term of up to 2 years from nominations made by the organizations and agencies specified in subsection (c) of this section. The terms of the members (other than the Manager of the Corporation and the Secretary) shall be staggered.
(2) Chairperson
The Advisory Committee shall be chaired by the Manager of the Corporation.
(3) Meetings
The Advisory Committee shall meet at least annually. The meetings of the Advisory Committee shall be publicly announced in advance and shall be open to the public. Appropriate records of the activities of the Advisory Committee shall be kept and made available to the public on request.
(e) Reports
Not later than June 30 of each year, the Advisory Committee shall submit to the Secretary a report specifying the conclusions and recommendations of the Advisory Committee regarding—
(1) the progress toward implementation of this chapter;
(2) the actuarial soundness of the Federal crop insurance program;
(3) the rate of producer participation in both catastrophic risk protection under
(4) the progress toward improved crop insurance coverage for new and specialty crops.
(f) Termination of authority
The authority provided by this section shall terminate on September 30, 1998.
(Feb. 16, 1938, ch. 30, title V, §515, as added
Prior Provisions
A prior section, act Feb. 16, 1938, ch. 30, title V, §515,
Effective Date
Section effective Oct. 13, 1994, and applicable to provision of crop insurance under Federal Crop Insurance Act (
§1516. Funding
(a) Authorization of appropriations
(1) Discretionary expenses
There are authorized to be appropriated for fiscal year 1999 and each subsequent fiscal year such sums as are necessary to cover the salaries and expenses of the Corporation.
(2) Mandatory expenses
There are authorized to be appropriated such sums as are necessary to cover for each of the 1999 and subsequent reinsurance years—
(A) the administrative and operating expenses of the Corporation for the sales commissions of agents; and
(B) premium subsidies, including the administrative and operating expenses of an approved insurance provider for the delivery of policies with additional coverage.
(b) Payment of Corporation expenses from insurance fund
(1) Expenses generally
For each of the 1999 and subsequent reinsurance years, the Corporation may pay from the insurance fund established under subsection (c) of this section all expenses of the Corporation (other than expenses covered by subsection (a)(1) of this section and expenses covered by paragraph (2)(A)), including—
(A) premium subsidies and indemnities;
(B) administrative and operating expenses of the Corporation necessary to pay the sales commissions of agents; and
(C) all administrative and operating expense reimbursements due under a reinsurance agreement with an approved insurance provider.
(2) Research and development expenses
(A) In general
For each of the 1999 and subsequent reinsurance years, the Corporation may pay from the insurance fund established under subsection (c) of this section research and development expenses of the Corporation, but not to exceed $3,500,000 for each fiscal year.
(B) Dairy options pilot program
Amounts necessary to carry out the dairy options pilot program shall not be counted toward the limitation on research and development expenses specified in subparagraph (A).
(c) Insurance fund
(1) In general
There is established an insurance fund, for the deposit of premium income and amounts made available under subsection (a)(2) of this section, to be available without fiscal year limitation.
(2) Commodity Credit Corporation funds
If at any time the amounts in the insurance fund are insufficient to enable the Corporation to carry out subsection (b) of this section, to the extent the funds of the Commodity Credit Corporation are available—
(A) the Corporation may request the Secretary to use the funds of the Commodity Credit Corporation to carry out subsection (b) of this section; and
(B) the Secretary may use the funds of the Commodity Credit Corporation to carry out subsection (b) of this section.
(Feb. 16, 1938, ch. 30, title V, §516,
Amendments
1998—Subsec. (a)(1).
"(A) the salaries and expenses of the Corporation; and
"(B) the administrative and operating expenses of the Corporation for the sales commissions of agents."
Subsec. (a)(2).
Subsec. (a)(2)(A).
Subsec. (b).
"(1)
"(2)
"(A) all other expenses of the Corporation (other than expenses covered by subsection (a)(1) of this section), including all premium subsidies and indemnities;
"(B) in the case of each of the 1995 through 1997 reinsurance years, all administrative and expense reimbursements due under a reinsurance agreement with an approved insurance provider; and
"(C) to the extent necessary, expenses incurred by the Corporation to carry out research and development."
1996—Subsec. (a)(2)(C).
Subsec. (b)(1).
Subsec. (b)(2)(A).
Subsec. (b)(2)(B).
1994—
1985—Subsec. (c)(1).
1981—Subsec. (a).
1980—Subsec. (a).
Subsecs. (c), (d).
1956—Subsec. (a). Act Aug. 3, 1956, added to list of costs which may be considered as nonadministrative or nonoperating, the direct cost of loss adjusters for crop inspections and loss adjustment, and authorized use of premium income for administrative and operating costs within limits prescribed by applicable appropriation.
1941—Subsec. (a). Act June 21, 1941, substituted "the agricultural commodity" for "wheat", and "$12,000,000" for "$6,000,000".
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Section 109 of
Section 110 of
Transfer of Functions
Administration of program of Federal Crop Insurance Corporation transferred to Secretary of Agriculture by 1946 Reorg. Plan No. 3, §501, eff. July 16, 1946, 11 F.R. 7877,
Wartime consolidation of Federal Crop Insurance Corporation into Agricultural Conservation and Adjustment Administration, see note set out under
Additional Appropriation
Act Dec. 23, 1944, ch. 713, §6,
Section Referred to in Other Sections
This section is referred to in
§1517. Separability
The sections of this chapter and subdivisions of sections are declared to be separable, and in the event any one or more sections or parts of the same of this chapter be held to be unconstitutional, the same shall not affect the validity of other sections or parts of sections of this chapter.
(Feb. 16, 1938, ch. 30, title V, §517,
§1518. "Agricultural commodity" defined
"Agricultural commodity", as used in this chapter, means wheat, cotton, flax, corn, dry beans, oats, barley, rye, tobacco, rice, peanuts, soybeans, sugar beets, sugar cane, tomatoes, grain sorghum, sunflowers, raisins, oranges, sweet corn, dry peas, freezing and canning peas, forage, apples, grapes, potatoes, timber and forests, nursery crops, citrus, and other fruits and vegetables, nuts, tame hay, native grass, aquacultural species (including, but not limited to, any species of finfish, mollusk, crustacean, or other aquatic invertebrate, amphibian, reptile, or aquatic plant propagated or reared in a controlled or selected environment), or any other agricultural commodity, excluding livestock and stored grain, determined by the Board under subsection (a) or (m) of
(Feb. 16, 1938, ch. 30, title V, §518, as added June 21, 1941, ch. 214, §9,
Prior Provisions
A former section 1518, act Feb. 16, 1938, ch. 30, title V, §518,
Amendments
1994—
1991—
1980—
1949—Act Aug. 25, 1949, amended section to correct a clerical error in citation of "subsection (a) of section 1508".
1944—Act Dec. 23, 1944, increased scope of definition of "agricultural commodity" from "wheat or cotton" to include all crops now set out.
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
§1519. Repealed. Pub. L. 104–127, title I, §196(j), Apr. 4, 1996, 110 Stat. 950
Section, act Feb. 16, 1938, ch. 30, title V, §519, formerly §518,
§1520. Producer eligibility
Except as otherwise provided in this chapter, a producer shall not be denied insurance under this chapter if—
(1) for purposes of catastrophic risk protection coverage, the producer is a "person" (as defined by the Secretary); and
(2) for purposes of any other plan of insurance, the producer is 18 years of age and has a bona fide insurable interest in a crop as an owner-operator, landlord, tenant, or sharecropper.
(Feb. 16, 1938, ch. 30, title V, §520, as added
Amendments
1994—
Effective Date of 1994 Amendment
Amendment by
§1521. Ineligibility for catastrophic risk and noninsured assistance payments
If the Secretary determines that a person has knowingly adopted a material scheme or device to obtain catastrophic risk, additional coverage, or noninsured assistance benefits under this chapter to which the person is not entitled, has evaded this chapter, or has acted with the purposes of evading this chapter, the person shall be ineligible to receive all benefits applicable to the crop year for which the scheme or device was adopted. The authority provided by this section shall be in addition to, and shall not supplant, the authority provided by
(Feb. 16, 1938, ch. 30, title V, §521, as added
Effective Date
Section effective Oct. 13, 1994, and applicable to provision of crop insurance under Federal Crop Insurance Act (