(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, potatoes, and sweet 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) Exclusion of losses due to certain actions of producer
(A) Exclusions Insurance provided under this subsection shall not cover losses due to
(i) the neglect or malfeasance of the producer;
(ii) 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
(iii) the failure of the producer to follow good farming practices, including scientifically sound sustainable and organic farming practices.
(B) Good farming practices
(i) Informal administrative process A producer shall have the right to a review of a determination regarding good farming practices made under subparagraph (A)(iii) in accordance with an informal administrative process to be established by the Corporation.
(ii) Administrative review
(I) No adverse decision The determination shall not be considered an adverse decision for purposes of subtitle H of the Department of Agriculture Reorganization Act of 1994 (
7 U.S.C.
6991 et seq.).
(II) Reversal or modification Except as provided in clause (i), the determination may not be reversed or modified as the result of a subsequent administrative review.
(iii) Judicial review
(I) Right to review A producer shall have the right to judicial review of the determination without exhausting any right to a review under clause (i).
(II) Reversal or modification The determination may not be reversed or modified as the result of judicial review unless the determination is found to be arbitrary or capricious.
(C) Limitation on revenue coverage for potatoes
No policy or plan of insurance provided under this subchapter (including a policy or plan of insurance approved by the Board under subsection (h) of this section) shall cover losses due to a reduction in revenue for potatoes except as covered under a whole farm policy or plan of insurance, as determined by the Corporation.
(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 subchapter if the producer has actuarially sound data relating to the production by the producer of the commodity or similar commodities and the data is acceptable to the Corporation.
(5) Dissemination of crop insurance information
(A) Available information The Corporation shall make available to producers through local offices of the Department
(i) current and complete information on all aspects of Federal crop insurance; and
(ii) a listing of insurance agents and companies offering to sell crop insurance in the area of the producers.
(B) Use of electronic methods
(i) Dissemination by Corporation The Corporation shall make the information described in subparagraph (A) available electronically to producers and approved insurance providers.
(ii) Submission to Corporation To the maximum extent practicable, the Corporation shall allow producers and approved insurance providers to use electronic methods to submit information required by the Corporation.
(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 subchapter 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.
(7) Adequate coverage for States
(A) Definition of adequately served
In this paragraph, the term adequately served means having a participation rate that is at least 50 percent of the national average participation rate.
(B) Review
The Board shall review the policies and plans of insurance that are offered by approved insurance providers under this subchapter to determine if each State is adequately served by the policies and plans of insurance.
(C) Report
(i) In general Not later than 30 days after completion of the review under subparagraph (B), the Board shall submit to Congress a report on the results of the review.
(ii) Recommendations The report shall include recommendations to increase participation in States that are not adequately served by the policies and plans of insurance.
(8) Special provisions for cotton and rice
Notwithstanding any other provision of this subchapter, beginning with the 2001 crops of upland cotton, extra long staple cotton, and rice, the Corporation shall offer plans of insurance, including prevented planting coverage and replanting coverage, under this subchapter that cover losses of upland cotton, extra long staple cotton, and rice resulting from failure of irrigation water supplies due to drought and saltwater intrusion.
(9) Premium adjustments
(A) Prohibition
Except as provided in subparagraph (B), no person shall pay, allow, or give, or offer to pay, allow, or give, directly or indirectly, either as an inducement to procure insurance or after insurance has been procured, any rebate, discount, abatement, credit, or reduction of the premium named in an insurance policy or any other valuable consideration or inducement not specified in the policy.
(B) Exceptions Subparagraph (A) does not apply with respect to
(i) a payment authorized under subsection (b)(5)(B);
(ii) a performance-based discount authorized under subsection (d)(3); or
(iii) a patronage dividend, or similar payment, that is paid
(I) by an entity that was approved by the Corporation to make such payments for the 2005, 2006, or 2007 reinsurance year, in accordance with subsection (b)(5)(B) as in effect on the day before the date of enactment of this paragraph; and
(II) in a manner consistent with the payment plan approved in accordance with that subsection for the entity by the Corporation for the applicable reinsurance year.
(10) Commissions
(A) Definition of immediate family
In this paragraph, the term immediate family means an individuals father, mother, stepfather, stepmother, brother, sister, stepbrother, stepsister, son, daughter, stepson, stepdaughter, grandparent, grandson, granddaughter, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, the spouse of the foregoing, and the individuals spouse.
(B) Prohibition No individual (including a subagent) may receive directly, or indirectly through an entity, any compensation (including any commission, profit sharing, bonus, or any other direct or indirect benefit) for the sale or service of a policy or plan of insurance offered under this subchapter if
(i) the individual has a substantial beneficial interest, or a member of the individuals immediate family has a substantial beneficial interest, in the policy or plan of insurance; and
(ii) the total compensation to be paid to the individual with respect to the sale or service of the policies or plans of insurance that meet the condition described in clause (i) exceeds 30 percent or the percentage specified in State law, whichever is less, of the total of all compensation received directly or indirectly by the individual for the sale or service of all policies and plans of insurance offered under this subchapter for the reinsurance year.
(C) Reporting
Not later than 90 days after the annual settlement date of the reinsurance year, any individual that received directly or indirectly any compensation for the service or sale of any policy or plan of insurance offered under this subchapter in the prior reinsurance year shall certify to applicable approved insurance providers that the compensation that the individual received was in compliance with this paragraph.
(D) Sanctions The procedural requirements and sanctions prescribed in section
1515 (h) of this title shall apply to the prosecution of a violation of this paragraph.
(E) Applicability
(i) In general Sanctions for violations under this paragraph shall only apply to the individuals or entities directly responsible for the certification required under subparagraph (C) or the failure to comply with the requirements of this paragraph.
(ii) Prohibition No sanctions shall apply with respect to the policy or plans of insurance upon which compensation is received, including the reinsurance for those policies or plans.
(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) Alternative catastrophic coverage Beginning with the 2001 crop year, the Corporation shall offer producers of an agricultural commodity the option of selecting either of the following:
(A) The catastrophic risk protection coverage available under paragraph (2)(A).
(B) An alternative catastrophic risk protection coverage that
(i) indemnifies the producer on an area yield and loss basis if such a policy or plan of insurance is offered for the agricultural commodity in the county in which the farm is located;
(ii) provides, on a uniform national basis, a higher combination of yield and price protection than the coverage available under paragraph (2)(A); and
(iii) the Corporation determines is comparable to the coverage available under paragraph (2)(A) for purposes of subsection (e)(2)(A) of this section.
(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 Secretarys 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 the amount of $300 per crop per county.
(B) Payment of catastrophic risk protection fee on behalf of producers
(i) Payment authorized If State law permits a licensing fee to be paid by an insurance provider to a cooperative association or trade association and rebated to a producer through the payment of catastrophic risk protection administrative fees, a cooperative association or trade association located in that State may pay, on behalf of a member of the association in that State or a contiguous State who consents to be insured under such an arrangement, all or a portion of the administrative fee required by this paragraph for catastrophic risk protection.
(ii) Selection of provider Nothing in this subparagraph limits the option of a producer to select the licensed insurance agent or other approved insurance provider from whom the producer will purchase a policy or plan of insurance or to refuse coverage for which a payment is offered to be made under clause (i).
(iii) Delivery of insurance Catastrophic risk protection coverage for which a payment is made under clause (i) shall be delivered by a licensed insurance agent or other approved insurance provider.
(iv) Additional coverage encouraged A cooperative association or trade association, and any approved insurance provider with whom a licensing fee is made, shall encourage producer members to purchase appropriate levels of coverage in order to meet the risk management needs of the member producers.
(C) Time for payment
The administrative fee required by this paragraph shall be paid by the producer on the same date on which the 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 section
1516 (c) of this title, to be available for the programs and activities of the Corporation.
(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 [
7 U.S.C.
7201 et seq.], for the conservation reserve program, or for any benefit described in section
2008f of this title, a person shall
(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 subchapter 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 subchapter, 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 subchapter 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 6 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) Expected market price
(A) Establishment or approval
For the purposes of this subchapter, the Corporation shall establish or approve the price level (referred to in this subchapter as the expected market price) of each agricultural commodity for which insurance is offered.
(B) General rule
Except as otherwise provided in subparagraph (C), the expected market price of an agricultural commodity shall be not less than the projected market price of the agricultural commodity, as determined by the Corporation.
(C) Other authorized approaches The expected market price of an agricultural commodity
(i) may be based on the actual market price of the agricultural commodity at the time of harvest, as determined by the Corporation;
(ii) in the case of revenue and other similar plans of insurance, may be the actual market price of the agricultural commodity, as determined by the Corporation;
(iii) in the case of cost of production or similar plans of insurance, shall be the projected cost of producing the agricultural commodity, as determined by the Corporation; or
(iv) in the case of other plans of insurance, may be an appropriate amount, as determined by the Corporation.
(D) Grain sorghum price election
(i) In general The Corporation, in conjunction with the Secretary (referred to in this subparagraph as the Corporation), shall
(I) not later than 60 days after the date of enactment of this subparagraph, make available all methods and data, including data from the Economic Research Service, used by the Corporation to develop the expected market prices for grain sorghum under the production and revenue-based plans of insurance of the Corporation; and
(II) request applicable data from the grain sorghum industry.
(ii) Expert reviewers
(I) In general Not later than 120 days after the date of enactment of this subparagraph, the Corporation shall contract individually with 5 expert reviewers described in subclause (II) to develop and recommend a methodology for determining an expected market price for sorghum for both the production and revenue-based plans of insurance to more accurately reflect the actual price at harvest.
(II) Requirements The expert reviewers under subclause (I) shall be comprised of agricultural economists with experience in grain sorghum and corn markets, of whom
(aa) 2 shall be agricultural economists of institutions of higher education;
(bb) 2 shall be economists from within the Department; and
(cc) 1 shall be an economist nominated by the grain sorghum industry.
(iii) Recommendations
(I) In general Not later than 90 days after the date of contracting with the expert reviewers under clause (ii), the expert reviewers shall submit, and the Corporation shall make available to the public, the recommendations of the expert reviewers.
(II) Consideration The Corporation shall consider the recommendations under subclause (I) when determining the appropriate pricing methodology to determine the expected market price for grain sorghum under both the production and revenue-based plans of insurance.
(III) Publication Not later than 60 days after the date on which the Corporation receives the recommendations of the expert reviewers, the Corporation shall publish the proposed pricing methodology for both the production and revenue-based plans of insurance for notice and comment and, during the comment period, conduct at least 1 public meeting to discuss the proposed pricing methodologies.
(iv) Appropriate pricing methodology
(I) In general Not later than 180 days after the close of the comment period in clause (iii)(III), but effective not later than the 2010 crop year, the Corporation shall implement a pricing methodology for grain sorghum under the production and revenue-based plans of insurance that is transparent and replicable.
(II) Interim methodology Until the date on which the new pricing methodology is implemented, the Corporation may continue to use the pricing methodology that the Corporation determines best establishes the expected market price.
(III) Availability On an annual basis, the Corporation shall make available the pricing methodology and data used to determine the expected market prices for grain sorghum under the production and revenue-based plans of insurance, including any changes to the methodology used to determine the expected market prices for grain sorghum from the previous year.
(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
If a producer elects to purchase coverage for a crop at a level in excess of catastrophic risk protection, the producer shall pay an administrative fee for the additional coverage of $30 per crop per county.
(B) Use of fees; waiver
Subparagraphs (D) and (E) of subsection (b)(5) of this section shall apply with respect to the collection and use of administrative fees under this paragraph.
(C) Time for payment
Subsection (b)(5)(C) shall apply with respect to the collection date for the administrative fee.
(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
(A) 1.1 through September 30, 1998;
(B) 1.075 for the period beginning October 1, 1998, and ending on the day before the date of enactment of the Food, Conservation, and Energy Act of 2008; and
(C) 1.0 on and after the date of enactment of that Act.
(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 equal to or greater than 50 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, 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.
(3) Performance-based discount
The Corporation may provide a performance-based premium discount for a producer of an agricultural commodity who has good insurance or production experience relative to other producers of that agricultural commodity in the same area, as determined by the Corporation.
(4) Billing date for premiums
Effective beginning with the 2012 reinsurance year, the Corporation shall establish August 15 as the billing date for premiums.
(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 Subject to paragraphs (4), (6), and (7), 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 additional coverage equal to or greater than 50 percent, but less than 55 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of
(i) 67 percent of the amount of the premium established under subsection (d)(2)(B)(i) of this section for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) of this section for the coverage level selected to cover operating and administrative expenses.
(C) In the case of additional coverage equal to or greater than 55 percent, but less than 65 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of
(i) 64 percent of the amount of the premium established under subsection (d)(2)(B)(i) of this section for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) of this section for the coverage level selected to cover operating and administrative expenses.
(D) In the case of additional coverage equal to or greater than 65 percent, but less than 75 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of
(i) 59 percent of the amount of the premium established under subsection (d)(2)(B)(i) of this section for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) of this section for the coverage level selected to cover operating and administrative expenses.
(E) In the case of additional coverage equal to or greater than 75 percent, but less than 80 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of
(i) 55 percent of the amount of the premium established under subsection (d)(2)(B)(i) of this section for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) of this section for the coverage level selected to cover operating and administrative expenses.
(F) In the case of additional coverage equal to or greater than 80 percent, but less than 85 percent, of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of
(i) 48 percent of the amount of the premium established under subsection (d)(2)(B)(i) of this section for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) of this section for the coverage level selected to cover operating and administrative expenses.
(G) Subject to subsection (c)(4) of this section, in the case of additional coverage equal to or greater than 85 percent of the recorded or appraised average yield indemnified at not greater than 100 percent of the expected market price, or a comparable coverage for a policy or plan of insurance that is not based on individual yield, the amount shall be equal to the sum of
(i) 38 percent of the amount of the premium established under subsection (d)(2)(B)(i) of this section for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) of this section for the coverage level selected to cover operating and administrative expenses.
(3) Prohibition on continuous coverage
Notwithstanding paragraph (2), during each of the 2001 and subsequent reinsurance years, additional coverage under subsection (c) of this section shall be available only in 5 percent increments beginning at 50 percent of the recorded or appraised average yield.
(4) Premium payment disclosure
Each policy or plan of insurance under this subchapter shall prominently indicate the dollar amount of the portion of the premium paid by the Corporation.
(5) Enterprise and whole farm units
(A) In general
The Corporation may carry out a pilot program under which the Corporation pays a portion of the premiums for plans or policies of insurance for which the insurable unit is defined on a whole farm or enterprise unit basis that is higher than would otherwise be paid in accordance with paragraph (2).
(B) Amount
The percentage of the premium paid by the Corporation to a policyholder for a policy with an enterprise or whole farm unit under this paragraph shall, to the maximum extent practicable, provide the same dollar amount of premium subsidy per acre that would otherwise have been paid by the Corporation under paragraph (2) if the policyholder had purchased a basic or optional unit for the crop for the crop year.
(C) Limitation
The amount of the premium paid by the Corporation under this paragraph may not exceed 80 percent of the total premium for the enterprise or whole farm unit policy.
(6) Premium subsidy for area revenue plans Subject to paragraph (4), in the case of a policy or plan of insurance that covers losses due to a reduction in revenue in an area, the amount of the premium paid by the Corporation shall be as follows:
(A) In the case of additional area coverage equal to or greater than 70 percent, but less than 75 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of
(i) 59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(B) In the case of additional area coverage equal to or greater than 75 percent, but less than 85 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of
(i) 55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(C) In the case of additional area coverage equal to or greater than 85 percent, but less than 90 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of
(i) 49 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(D) In the case of additional area coverage equal to or greater than 90 percent of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of
(i) 44 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(7) Premium subsidy for area yield plans Subject to paragraph (4), in the case of a policy or plan of insurance that covers losses due to a loss of yield or prevented planting in an area, the amount of the premium paid by the Corporation shall be as follows:
(A) In the case of additional area coverage equal to or greater than 70 percent, but less than 80 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of
(i) 59 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(B) In the case of additional area coverage equal to or greater than 80 percent, but less than 90 percent, of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of
(i) 55 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(C) In the case of additional area coverage equal to or greater than 90 percent,
of the recorded county yield indemnified at not greater than 100 percent of the expected market price, the amount shall be equal to the sum of
(i) 51 percent of the amount of the premium established under subsection (d)(2)(B)(i) for the coverage level selected; and
(ii) the amount determined under subsection (d)(2)(B)(ii) for the coverage level selected to cover operating and administrative expenses.
(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 subchapter, 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 annually records acceptable to the Secretary regarding crop acreage, acreage yields, and production for each agricultural commodity insured under this subchapter 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
(i) 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; or
(ii) a yield determined by the Corporation, in the case of
(I) a producer that has not had a share of the production of the insured crop for more than two crop years, as determined by the Secretary;
(II) a producer that produces an agricultural commodity on land that has not been farmed by the producer; or
(III) a producer that rotates a crop produced on a farm to a crop that has not been produced on the farm.
(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, 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.
(4) Adjustment in actual production history to establish insurable yields
(A) Application
This paragraph shall apply whenever the Corporation uses the actual production records of the producer to establish the producers actual production history for an agricultural commodity for any of the 2001 and subsequent crop years.
(B) Election to use percentage of transitional yield If, for one or more of the crop years used to establish the producers actual production history of an agricultural commodity, the producers recorded or appraised yield of the commodity was less than 60 percent of the applicable transitional yield, as determined by the Corporation, the Corporation shall, at the election of the producer
(i) exclude any of such recorded or appraised yield; and
(ii) replace each excluded yield with a yield equal to 60 percent of the applicable transitional yield.
(C) Premium adjustment
In the case of a producer that makes an election under subparagraph (B), the Corporation shall adjust the premium to reflect the risk associated with the adjustment made in the actual production history of the producer.
(5) Adjustment to reflect increased yields from successful pest control efforts
(A) Situations justifying adjustment The Corporation shall develop a methodology for adjusting the actual production history of a producer when each of the following apply:
(i) The producers farm is located in an area where systematic, area-wide efforts have been undertaken using certain operations or measures, or the producers farm is a location at which certain operations or measures have been undertaken, to detect, eradicate, suppress, or control, or at least to prevent or retard the spread of, a plant disease or plant pest, including a plant pest (as defined in section
77592 of this title).
(ii) The presence of the plant disease or plant pest has been found to adversely affect the yield of the agricultural commodity for which the producer is applying for insurance.
(iii) The efforts described in clause (i) have been effective.
(B) Adjustment amount
The amount by which the Corporation adjusts the actual production history of a producer of an agricultural commodity shall reflect the degree to which the success of the systematic, area-wide efforts described in subparagraph (A), on average, increases the yield of the commodity on the producers farm, as determined by the Corporation.
(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 (including an approved insurance provider, a college or university, a cooperative or trade association, or any other 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 subchapter, 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.
(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 by approved insurance providers 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) Confidentiality
(i) In general A proposal submitted to the Board under this subsection (including any information generated from the proposal) shall be considered to be confidential commercial or financial information for the purposes of section
552 (b)(4) of title
5.
(ii) Standard of confidentiality If information concerning a proposal could be withheld by the Secretary under the standard for privileged or confidential information pertaining to trade secrets and commercial or financial information under section
552 (b)(4) of title
5, the information shall not be released to the public.
(iii) Application This subparagraph shall apply with respect to a proposal only during the period preceding any approval of the proposal by the Board.
(B) Personal presentation
The Board shall provide an applicant with the opportunity to present the proposal to the Board in person if the applicant so desires.
(C) Notification of intent to disapprove
(i) Time period The Board shall provide an applicant with notification of intent to disapprove a proposal not later than 30 days prior to making the disapproval.
(ii) Modification of application
(I) Authority An applicant that receives the notification may modify the application, and such application, as modified, shall be considered by the Board in the manner provided in subparagraph (D) within the 30-day period beginning on the date the modified application is submitted.
(II) Time period Clause (i) shall not apply to the Boards consideration of the modified application.
(iii) Explanation Any notification of intent to disapprove a policy or other material submitted under this subsection shall be accompanied by a complete explanation as to the reasons for the Boards intention to deny approval.
(D) Determination to approve or disapprove policies or materials
(i) Time period Not later than 120 days after a policy or other material is submitted under this subsection, the Board shall make a determination to approve or disapprove the policy or material.
(ii) Explanation Any determination by the Board to disapprove any policy or other material shall be accompanied by a complete explanation of the reasons for the Boards decision to deny approval.
(iii) Failure to meet deadline Notwithstanding any other provision of this subchapter, if the Board fails to make a determination within the prescribed time period, the submitted policy or other material shall be deemed approved by the Board for the initial reinsurance year designated for the policy or material, unless the Board and the applicant agree to an extension.
(5) Premium schedule
(A) Payment by Corporation In the case of a policy or plan of insurance developed and approved under this subsection or section
1522 of this title, or conducted under section
1523 of this title (other than a policy or plan of insurance applicable to livestock), the Corporation shall pay a portion of the premium of the policy or plan of insurance that is equal to
(i) the percentage, specified in subsection (e) of this section for a similar level of coverage, of the total amount of the premium used to define loss ratio; and
(ii) an amount for administrative and operating expenses determined in accordance with subsection (k)(4) of this section.
(B) Transitional schedule Effective only during the 2001 reinsurance year, in the case of a policy or plan of insurance developed and approved under this subsection or section
1522 of this title, or conducted under section
1523 of this title (other than a policy or plan of insurance applicable to livestock), and first approved by the Board after June 20, 2000, the payment by the Corporation of a portion of the premium of the policy may not exceed the dollar amount that would otherwise be authorized under subsection (e) of this section (consistent with subsection (c)(5) of this section, as in effect on the day before June 20, 2000).
(6) 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.
(i) Adoption of rates and coverages
(1) In general
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.
(2) Review of rating methodologies To maximize participation in the Federal crop insurance program and to ensure equity for producers, the Corporation shall periodically review the methodologies employed for rating plans of insurance under this subchapter consistent with section
1507 (c)(2) of this title.
(3) Analysis of rating and loss history
The Corporation shall analyze the rating and loss history of approved policies and plans of insurance for agricultural commodities by area.
(4) Premium adjustment
If the Corporation makes a determination that premium rates are excessive for an agricultural commodity in an area relative to the requirements of subsection (d)(2) of this section for that area, then, for the 2002 crop year (and as necessary thereafter), the Corporation shall make appropriate adjustments in the premium rates for that area for that agricultural commodity.
(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 on behalf of the Corporation, 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.
(5) Settlement of claims on farm-stored production
A producer with farm-stored production may, at the option of the producer, delay settlement of a crop insurance claim relating to the farm-stored production for up to 4 months after the last date on which claims may be submitted under the policy of insurance.
(k) Reinsurance
(1) In general
Notwithstanding any other provision of this subchapter, 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 otherwise provided in this paragraph, 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).
(C) Other reductions
Beginning with the 2002 reinsurance year, in the case of a policy or plan of insurance approved by the Board that was not reinsured during the 1998 reinsurance year but, had it been reinsured, would have received a reduced rate of reimbursement during the 1998 reinsurance year, the rate of reimbursement for administrative and operating costs established for the policy or plan of insurance shall take into account the factors used to determine the rate of reimbursement for administrative and operating costs during the 1998 reinsurance year, including the expected difference in premium and actual administrative and operating costs of the policy or plan of insurance relative to an individual yield policy or plan of insurance and other appropriate factors, as determined by the Corporation.
(D) Time for reimbursement
Effective beginning with the 2012 reinsurance year, the Corporation shall reimburse approved insurance providers and agents for the allowable administrative and operating costs of the providers and agents as soon as practicable after October 1 (but not later than October 31) after the reinsurance year for which reimbursements are earned.
(E) Reimbursement rate reduction
In the case of a policy of additional coverage that received a rate of reimbursement for administrative and operating costs for the 2008 reinsurance year, for each of the 2009 and subsequent reinsurance years, the reimbursement rate for administrative and operating costs shall be 2.3 percentage points below the rates in effect as of the date of enactment of the Food, Conservation, and Energy Act of 2008 for all crop insurance policies used to define loss ratio, except that only 1/2 of the reduction shall apply in a reinsurance year to the total premium written in a State in which the State loss ratio is greater than 1.2.
(F) Reimbursement rate for area policies and plans of insurance
Notwithstanding subparagraphs (A) through (E), for each of the 2009 and subsequent reinsurance years, the reimbursement rate for area policies and plans of insurance widely available as of the date of enactment of this subparagraph shall be 12 percent of the premium used to define loss ratio for that reinsurance year.
(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 section
701 (a)(2) of title
5.
(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.
(8) Renegotiation of standard reinsurance agreement
(A) In general Except as provided in subparagraph (B), notwithstanding section 536 of the Agricultural Research, Extension, and Education Reform Act of 1998 (
7 U.S.C.
1506 note ; Public Law 105185) and section 148 of the Agricultural Risk Protection Act of 2000 (
7 U.S.C.
1506 note ; Public Law 106224), the Corporation may renegotiate the financial terms and conditions of each Standard Reinsurance Agreement
(i) to be effective for the 2011 reinsurance year beginning July 1, 2010; and
(ii) once during each period of 5 reinsurance years thereafter.
(B) Exceptions
(i) Adverse circumstances Subject to clause (ii), subparagraph (A) shall not apply in any case in which the approved insurance providers, as a whole, experience unexpected adverse circumstances, as determined by the Secretary.
(ii) Effect of Federal law changes If Federal law is enacted after the date of enactment of this paragraph that requires revisions in the financial terms of the Standard Reinsurance Agreement, and changes in the Agreement are made on a mandatory basis by the Corporation, the changes shall not be considered to be a renegotiation of the Agreement for purposes of subparagraph (A).
(C) Notification requirement
If the Corporation renegotiates a Standard Reinsurance Agreement under subparagraph (A)(iii), the Corporation shall notify the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate of the renegotiation.
(D) Consultation
The approved insurance providers may confer with each other and collectively with the Corporation during any renegotiation under subparagraph (A).
(E) 2011 reinsurance year
(i) In general As part of the Standard Reinsurance Agreement renegotiation authorized under subparagraph (A)(i), the Corporation shall consider alternative methods to determine reimbursement rates for administrative and operating costs.
(ii) Alternative methods Alternatives considered under clause (i) shall include
(I) methods that
(aa) are graduated and base reimbursement rates in a State on changes in premiums in that State;
(bb) are graduated and base reimbursement rates in a State on the loss ratio for crop insurance for that State; and
(cc) are graduated and base reimbursement rates on individual policies on the level of total premium for each policy; and
(II) any other method that takes into account current financial conditions of the program and ensures continued availability of the program to producers on a nationwide basis.
(9) Due date for payment of underwriting gains Effective beginning with the 2011 reinsurance year, the Corporation shall make payments for underwriting gains under this subchapter on
(A) for the 2011 reinsurance year, October 1, 2012; and
(B) for each reinsurance year thereafter, October 1 of the following calendar year.
(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) Quality loss adjustment coverage
(1) Effect of coverage
If a policy or plan of insurance offered under this subchapter includes quality loss adjustment coverage, the coverage shall provide for a reduction in the quantity of production of the agricultural commodity considered produced during a crop year, or a similar adjustment, as a result of the agricultural commodity not meeting the quality standards established in the policy or plan of insurance.
(2) Additional quality loss adjustment
(A) Producer option Notwithstanding any other provision of law, in addition to the quality loss adjustment coverage available under paragraph (1), the Corporation shall offer producers the option of purchasing quality loss adjustment coverage on a basis that is smaller than a unit with respect to an agricultural commodity that satisfies each of the following:
(i) The agricultural commodity is sold on an identity-preserved basis.
(ii) All quality determinations are made solely by the Federal agency designated to grade or classify the agricultural commodity.
(iii) All quality determinations are made in accordance with standards published by the Federal agency in the Federal Register.
(iv) The discount schedules that reflect the reduction in quality of the agricultural commodity are established by the Secretary.
(B) Basis for adjustment
Under this paragraph, the Corporation shall set the quality standards below which quality losses will be paid based on the variability of the grade of the agricultural commodity from the base quality for the agricultural commodity.
(3) Review of criteria and procedures
(A) Review
The Corporation shall contract with a qualified person to review the quality loss adjustment procedures of the Corporation so that the procedures more accurately reflect local quality discounts that are applied to agricultural commodities insured under this subchapter.
(B) Procedures
Effective beginning not later than the 2004 reinsurance year, based on the review, the Corporation shall make adjustments in the procedures, taking into consideration the actuarial soundness of the adjustment and the prevention of fraud, waste, and abuse.
(4) Quality of agricultural commodities delivered to warehouse operators In administering this subchapter, the Secretary shall accept, in the same manner and under the same terms and conditions, evidence of the quality of agricultural commodities delivered to
(A) warehouse operators that are licensed under the United States Warehouse Act (
7 U.S.C.
241 et seq.);
(B) warehouse operators that
(i) are licensed under State law; and
(ii) have entered into a storage agreement with the Commodity Credit Corporation; and
(C) warehouse operators that
(i) are not licensed under State law but are in compliance with State law regarding warehouses; and
(ii) have entered into a commodity storage agreement with the Commodity Credit Corporation.
(5) Special provisions for malting barley
The Corporation shall promulgate special provisions under this subsection specific to malting barley, taking into consideration any changes in quality factors, as required by applicable market conditions.
(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 subchapter 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 (
7 U.S.C.
1961 et seq.).
(o) Crop production on native sod
(1) Definition of native sod In this subsection, the term native sod means land
(A) on which the plant cover is composed principally of native grasses, grasslike plants, forbs, or shrubs suitable for grazing and browsing; and
(B) that has never been tilled for the production of an annual crop as of the date of enactment of this subsection.
(2) Ineligibility for benefits
(A) In general Subject to subparagraph (B) and paragraph (3), native sod acreage that has been tilled for the production of an annual crop after the date of enactment of this subsection shall be ineligible during the first 5 crop years of planting, as determined by the Secretary, for benefits under
(i) this subchapter; and
(ii) section
7333 of this title.
(B) De minimis acreage exemption
The Secretary shall exempt areas of 5 acres or less from subparagraph (A).
(3) Application
Paragraph (2) may apply to native sod acreage in the Prairie Pothole National Priority Area at the election of the Governor of the respective State.