[Federal Register Volume 64, Number 108 (Monday, June 7, 1999)]
[Rules and Regulations]
[Pages 30214-30229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13983]


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DEPARTMENT OF AGRICULTURE

Federal Crop Insurance Corporation

7 CFR Part 407

RIN 0563-AB06


Group Risk Plan of Insurance

AGENCY: Federal Crop Insurance Corporation, USDA.

ACTION: Final rule.

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SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the 
Group Risk Plan of Insurance Common Policy Basic Provisions and Crop 
Provisions for Barley, Corn, Cotton, Forage, Sorghum, Peanuts, 
Soybeans, and Wheat, to add regulations to provide for the operation of 
an alternative risk management tool to be known as the Group Risk Plan 
of Insurance (GRP). This plan will insure against the widespread loss 
of production of certain crops in a county. It is intended primarily 
for use by those producers whose yields tend to follow the county 
average yield. GRP pays only when the average yield of the entire 
county drops below the expected county yield for the insured crop as 
set by FCIC. Payment is based on the percentage of decline in a county 
or area wide yield below the insured's trigger yield. The insured need 
not have a loss to collect an indemnity. Alternately, the insured may 
have a loss and not collect an indemnity.

EFFECTIVE DATE: July 7, 1999.

FOR FURTHER INFORMATION CONTACT: William Klein, Insurance Management 
Specialist, Research and Development, Product Development Division, 
Federal Crop Insurance Corporation, United States Department of 
Agriculture, 9435 Holmes Road, Kansas City, MO 64131, telephone (816) 
926-7730.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    The Office of Management and Budget (OMB) has determined this rule 
to be significant for the purposes of Executive Order 12866 and, 
therefore, has been reviewed by OMB.

Cost-Benefit Analysis

    A Cost-Benefit Analysis has been completed and is available to 
interested persons at the address listed above. In summary, the 
analysis finds that the expected benefits of this action outweighs the 
costs. Clarification of the provisions and administrative changes that 
simplify program operations will benefit producers, FCIC, and insurance 
providers.

Paperwork Reduction Act of 1995

    Under the provisions of the Paperwork Reduction Act of 1995 (44 
U.S.C. chapter 35), the collections of information in this rule have 
previously been approved by the Office of Management and Budget (OMB) 
under control number 0563-0053 through April 30, 2001. This rule will 
replace the pilot Group Risk Plan of Insurance Common Policy Basic 
Provisions and the crop provisions for Barley, Corn, Cotton, Forage, 
Sorghum, Peanuts, Soybeans, and Wheat. Therefore, the amendment set 
forth in this rule does not revise the content or alter the frequency 
of the information collection cleared under the above referenced 
docket.

Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995, (UMRA), 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on State, local, and tribal governments and 
the private sector. This rule contains no Federal mandates (under the 
regulatory provisions of Title II of UMRA) for

[[Page 30215]]

State, local, and tribal governments or the private sector. Therefore, 
this rule is not subject to the requirements of sections 202 and 205 of 
UMRA.

Executive Order 12612

    It has been determined under section 6(a) of Executive Order 12612, 
Federalism, that this rule does not have sufficient federalism 
implications to warrant the preparation of a Federalism Assessment. The 
provisions contained in this rule will not have a substantial direct 
effect on States or their political subdivisions or on the distribution 
of power and responsibilities among the various levels of government.

Regulatory Flexibility Act

    This regulation will not have a significant impact on a substantial 
number of small entities. The effect of this regulation on small 
entities will be no greater than on larger entities. Under the GRP 
program, an insured is required to complete an application and an 
acreage report. Neither a notice of loss nor a claim for indemnity are 
required, since a loss is based on the county average yield falling 
below the expected county yield.
    The amount of work required of the insurance companies and 
representatives of FCIC delivering and servicing these policies will 
not increase from the amount of work currently required to deliver 
previous policies to which this regulation applies. In fact, this 
action reduces the paperwork burden and there is a lessor impact on the 
insured and the reinsured company because the yield is based on 
National Agricultural Statistics Service (NASS) yields rather than 
individual insured's yields. Therefore, this action is determined to be 
exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 
605) and no Regulatory Flexibility Analysis was prepared.

Federal Assistance Program

    This program is listed in the Catalog of Federal Domestic 
Assistance under No. 10.450.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372 which require intergovernmental consultation with State and local 
officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115, June 24, 1983.

Executive Order 12988

    This rule had been reviewed in accordance with Executive Order 
12988 on civil justice reform. The provisions of this rule will not 
have a retroactive effect. The provisions of this rule will preempt 
State and local laws to the extent such State and local laws are 
inconsistent herewith. The administrative appeal provisions published 
at 7 CFR part 11 must be exhausted before action for judicial review of 
any determination made by FCIC may be brought.

Environmental Evaluation

    This action is not expected to have a significant impact on the 
quality of the human environment, health, and safety. Therefore, 
neither an Environmental Assessment nor an Environmental Impact 
Statement is needed.

National Performance Review

    This regulatory action is being taken as part of the National 
Performance Review Initiative to eliminate unnecessary or duplicative 
regulations and improve those that remain in force.

Background

    On Tuesday, October 8, 1996, FCIC published a proposed rule in the 
Federal Register at 61 FR 52717-52727 to add a new part 407 to chapter 
IV of title 7 of the Code of Federal Regulations, Group Risk Plan of 
Insurance Common Policy Basic Provisions and Crop Provisions for 
Barley, Corn, Cotton, Forage, Sorghum, Peanuts, Soybeans, and Wheat. 
The new provisions will be effective for the 2000 and succeeding crop 
years for the Group Risk Plan of Insurance Common Policy Basic 
Provisions and Crop Provisions for Barley, Corn, Cotton, Forage, 
Sorghum, Peanuts, Soybeans, and Wheat Crop Provisions. These provisions 
will replace the pilot program provisions currently in effect for the 
1999 crop year.
    Following publication of the proposed rule, the public was afforded 
45 days to submit written comments and opinions. A total of 45 comments 
were received from reinsured companies, an insurance service 
organization, and a producer. The comments received and FCIC's 
responses are as follows:
    Comment: One commenter from a reinsured company recommended that 
GRP either remain a pilot program for further evaluation ``since it has 
not yet shown itself to be a success'' or that it be eliminated. The 
commenter cited no participation for GRP barley, minimal participation 
for GRP cotton, sorghum, peanuts, and wheat, and moderate interest in 
corn and soybeans, particularly in the Midwestern states of Iowa, 
Indiana, Minnesota, and Wisconsin. The commenter further noted that 
participation had decreased for both corn and soybeans between 1995 and 
1996, but did acknowledge that participation in forage production had 
increased.
    Response: While participation may be low for specific GRP programs 
in some areas, net acres insured grew by 32 percent and total premium 
grew 40 percent between 1995 and 1996. Wheat acreage, for example, 
increased by 300 percent and total wheat premium increased 370 percent. 
These statistics indicate a growing GRP program rather than one in 
decline. FCIC believes that participation can be significantly 
increased by additional changes. First, if CAT coverage is extended to 
all GRP crops, significant increases in participation, similar to what 
occurred with GRP forage in 1997, could occur. Secondly, there is 
evidence that agents have received limited information about the 
product. At recent meetings sponsored by the National Association of 
Professional Agents in Iowa and Minnesota, and attended by FCIC 
personnel, numerous agents stated that they had not been informed of 
the benefits of the GRP program. FCIC expects increased participation 
in GRP insurance programs in the future due to increased publicity, 
increased agent and producer awareness of the product, and perhaps 
expansion of CAT coverage. Therefore, FCIC will proceed with GRP as a 
risk management tool.
    Comment: A reinsured company commented that CAT coverage and 
expansion of the Crop Revenue Coverage (CRC) and Income Protection (IP) 
programs may attract producers that might otherwise be interested in 
GRP. Secondly, expanding GRP only adds to the confusion introduced by 
several plans of coverage and adds expenses at a time when it is 
imperative to simplify and reduce expenses.
    Response: New crop insurance programs, which includes Revenue 
Insurance, are providing necessary new risk management protection for 
producers, since no single insurance product meets the needs of all 
producers. Further, offering a variety of insurance products should 
significantly increase participation. Also, expanding GRP should not 
add to the confusion, add more expenses, or increase complexity. In 
fact, of all the insurance products available, GRP is the simplest, 
least costly to administer, and provides potentially greater protection 
for producers at a significantly reduced premium.
    Comment: An insurance service organization questioned the need for 
the language in Sec. 407.2 (b) which states that the contract ``* * * 
may be offered directly to producers through agents of the Farm Service 
Agency (FSA).''

[[Page 30216]]

    Response: The provision actually states that the contract may be 
offered ``directly to producers through agents of the United States 
Department of Agriculture.'' This language is required as a fall back 
position if coverage in some areas is not available through the private 
sector.
    Comment: An insurance service organization questioned language in 
Sec. 407.2(c) that prohibits more than one insurance policy for a 
person on the same crop, county and crop year, unless approved in 
writing by FCIC. The commenter asks whether ``insurance policy'' refers 
to GRP, or to other multiple peril crop insurance policies (MPCI) as 
well, and if so, under what circumstances would multiple policies be 
acceptable.
    Response: This provision applies to all federally approved crop 
insurance policies including MPCI and GRP. Since both the MPCI policy 
and the GRP policy require that all acreage of the insured crop in the 
county be insured under the same policy (except high risk land) the 
producer is prohibited from obtaining both MPCI coverage and GRP 
coverage on the same crop in the county.
    Comment: An insurance service organization asked if a reinsured 
company representative is included in the language in Secs. 407.6(a)(1) 
and (a)(2)(i) ``an agent or employee of the Corporation.''
    Response: This provision was intended to distinguish between agents 
and employees of FCIC and agents and employees of the reinsured 
company. For clarification, FCIC has amended the language in the 
sections cited above from ``agent or employee of the Corporation'' to 
``a representative of a reinsured company or FCIC.''
    Comment: One commenter from an insurance service organization 
recommended moving the last phrase of Sec. 407.6(a)(2)(iii), ``* * * 
such insured shall be granted relief the same as if otherwise entitled 
thereto,'' to a separate finishing paragraph (a)(3) and moving 
``whenever'' from Sec. 407.6(a) to the beginning of Sec. 407.6(a)(1).
    Response: FCIC agrees that the above cited phrase is clearer as a 
separate paragraph and has accordingly redesignated it as 
Sec. 407.6(a)(3). The word ``whenever'' applies to all the conditions 
and, therefore, must remain at Sec. 407.6(a).
    Comment: One commenter from an insurance service organization 
expressed concern that the language in Sec. 407.6 (b) and (c) does not 
appear to provide a level playing field since reinsured companies are 
held liable for unauthorized acts of their agents, but apparently no 
one pays for FCIC agent errors except the taxpayers.
    Response: Under the terms of the Standard Reinsurance Agreement, 
reinsured companies are responsible for any error or omission on the 
part of their agents, loss adjusters, or other contractors. This 
provision simply ensures that such responsibility is not waived by this 
rule. The Government's oversight bodies ensure that FCIC's employees or 
agents are held accountable for their acts of omission.
    Comment: One commenter from an insurance service organization 
expressed concern over the apparent contradiction between Secs. 407.6 
and 407.7. Section 407.6(c) indicates that companies may grant relief 
based on arbitration, but Sec. 407.7 states that any exceptions under 
Sec.  407.6 will be ``at the sole discretion of the Corporation.''
    Response: The language in Sec. 407.7 is not intended to involve 
FCIC in the arbitration process between the company and insureds. 
However, arbitration may not change the terms of the contract. 
Therefore the language, ``at the sole discretion of the Corporation,'' 
remains in Sec. 407.7.
    Comment: An insurance service organization commented that using the 
term ``person'' in Sec. 407.8 (a), instead of ``entity'' to include 
more than individuals can lead to confusion. They believe the term 
could suggest that no group entities may be insured.
    Response: The term ``person'' is defined in the Common Crop 
Insurance Policy, Group Risk Plan of Insurance Common Policy, and other 
policies insured by or approved by the Corporation. It appropriately 
encompasses an individual, a partnership, an association, a 
corporation, an estate, a trust, or other legal entity. Therefore, no 
change has been made in the term or its use.
    Comment: An insurance service organization recommended simplifying 
the language in the last sentence in Sec. 407.8(a) as follows: ``The 
application must be submitted to the insurance provider on or before 
the applicable sales closing date on file in the insurance provider's 
local office.''
    Response: FCIC agrees with the recommendation and has modified the 
language accordingly.
    Comment: One comment from an insurance service organization 
addressed extension of sales closing dates and cessation of sales due 
to adverse conditions. The commenter expressed concern over the 
timeliness of such notification and the vehicle by which it would be 
made.
    Response: The Manager of FCIC has the authority to extend fall 
sales closing dates, and suspend sales under Sec. 407.8 (b). Once a 
decision is made, electronic notification will be made to companies as 
soon as possible. In addition, FCIC will place a notice of the extended 
date in the Federal Register. Therefore, the provisions in 
Sec. 407.8(b) will remain.
    Comment: Several comments were received from insurance service 
organizations questioning the name, inclusion, and use of the GRP 
Disclaimer. One commenter suggested renaming the form, ``Acknowledgment 
of Differences'' because ``disclaimer'' suggested the need to bring 
flaws to the policyholder's attention. Another suggested removing the 
disclaimer or using one generic form. This commenter explained that 
Sec. 407.8(c) was too detailed, that the disclaimer was not part of the 
application, and that GRP will no longer be a pilot program or ``new 
and different.'' Another commenter questioned why the disclaimer was 
not listed as part of the policy in Sec. 407.9.
    Response: FCIC agrees that the name, ``Acknowledgment of 
Differences,'' is more positive and has changed the form name 
accordingly. FCIC disagrees, however, that the form reference should be 
removed from Sec. 407.8(c). A single generic disclaimer, as suggested, 
is provided as an exhibit in the revised crop year GRP procedure. The 
form is needed for clarity. GRP is different from other insurance 
programs in that an indemnity is triggered by a loss in the county and 
not by an individual's loss. It is imperative that insureds understand 
that they can sustain a loss on their crop and still not be indemnified 
if the county loss does not trigger an indemnity. This acknowledgment 
is not part of the policy as described in Sec. 407.9. It does not add 
to or vary the terms of the policy. It merely highlights for the 
insured how the GRP risk management tool differs from traditional crop 
insurance. Therefore, the suggestion to list the disclaimer as part of 
the policy has not been adopted.
    Comment: An insurance service organization asked whether the 
Proposed Rule for 1998 GRP Barley and Wheat crop provisions contains 
the same language as those currently in effect for the 1997 crop year. 
If the language is the same, they questioned whether the 1997 crop 
provisions would remain in effect for the 1998 crop year, or would new 
1998 provisions be issued.
    Response: On October 8, 1996, when GRP was published as a proposed 
rule, these crop provisions contained the same language as the 1997 GRP 
Barley and Wheat pilot program crop

[[Page 30217]]

provisions sent out prior to June 30, 1997. The 1997 GRP Barley and 
Wheat pilot program crop provisions remain in effect for the 1998 and 
1999 crop years because the June 30 contract change date passed prior 
to final rule publication. Consequently, these Crop Provisions, set out 
in this final rule, will be effective for the 2000 crop year and will 
be issued following final rule publication. These Crop Provisions 
include language changes from the 1999 crop provisions under the pilot 
program.
    Comment: An insurance service organization noted that the opening 
reference in Sec. 407.9 incorrectly cites Provision 16 as containing 
continuous policy language rather than Provision 19.
    Response: FCIC acknowledges the reference error. Based on 
additional edits to these provisions, the reference now correctly cites 
section 18.
    Comment: An insurance service organization commented that the 
language in Sec. 407.9 in the 3rd paragraph under ``both policies'' 
which states, ``You may select any dollar amount * * * by the acreage 
reporting date,'' could be misunderstood by insureds to mean that this 
choice may be made at acreage reporting time. They noted that this 
information is more clearly provided in the sixth paragraph and asked 
whether it is necessary that the language be included in both places.
    Response: FCIC believes that both references to acreage planted by 
the acreage reporting date are necessary. FCIC has clarified paragraph 
3 to specify that the selection of the dollar amount of protection must 
occur by the sales closing date and that this protection will be 
provided for each acre of the crop planted on or before the acreage 
reporting date and shown on the acreage report.
    Comment: An insurance service organization recommended that FCIC 
modify the definition for the term ``Cancellation date'' from ``prior 
to that date'' to ``on or before that date'' since it is possible to 
cancel a policy on the cancellation date.
    Response: FCIC agrees with the recommendation and has modified the 
definition accordingly.
    Comment: An insurance service organization recommended that the 
term ``insurance provider'' be expanded to include FSA. This makes the 
policy language clearer and less wordy by eliminating the need to keep 
referring to ``companies or FSA offices''.
    Response: In the future FSA is not expected to deliver crop 
insurance, and will only be used as a fall back if the private sector 
cannot deliver the program in an area. Based on this contingency 
``FSA'' has been added to the definition of ``insurance provider.''
    Comment: An insurance service organization expressed concern about 
language in section 3(b) of the GRP Basic Provisions which specifies 
that only acreage planted to the insured crop on or before the acreage 
reporting date will be insured. They are concerned about how insurance 
providers will verify the acreage.
    Response: Companies are required to use the same procedures 
currently used to verify acreage planted on or before the final 
planting date under other insurance plans.
    Comment: An insurance service organization commented that the 
language in section 3(d) of the GRP Basic Provisions, ``* * * we will 
not insure acreage where the insured failed to follow good farming 
practices'' is not necessary. They pointed out that good farming 
practices are not a ``moral hazard'' for GRP since losses are 
determined from the county average rather than an individual yield.
    Response: Section 508(a)(3)(c) of the Federal Crop Insurance Act, 
as amended (Act), provides that failure to follow good farming 
practices will result in the acreage not being insurable. This 
provision applies to all policies insured or reinsured by FCIC. No 
change will be made in this provision.
    Comment: An insurance service organization asked whether the CAT 
level of coverage referenced in section 4 of the GRP Basic Provisions 
and elsewhere, and currently available only for GRP forage, would be 
made available on all GRP crops.
    Response: There are no plans to expand CAT coverage to other GRP 
crop programs for the 1999 crop year. However, the Manager of FCIC has 
the authority to expand CAT coverage for any or all of the other seven 
GRP crops.
    Comment: An insurance service organization recommended modifying 
the language in section 7(a) of the GRP Basic Provisions to refer to 
``net acreage'' instead of ``all acreage'' in which you have a share, 
or rearrange the various factors so it does not seem to refer to your 
share in the application.
    Response: The insured is required to report all acreage of each 
insured crop in the county, both insurable and not insured, on or 
before the acreage reporting date shown in the Special Provisions. 
Therefore, FCIC has not modified this language. To prevent possible 
confusion of ``share in the application,'' FCIC has moved the phrase 
``in which you have a share'' to after ``for each insured crop.''
    Comment: One commenter from an insurance service organization 
questioned whether it mattered if acreage was planted by the acreage 
reporting date, as required in section 7(a), since a GRP loss is 
triggered by the county yield.
    Response: The crop must be planted before acreage can be accurately 
reported. Therefore, to protect the integrity of the program, this 
provision has not been changed.
    Comment: An insurance service organization noted that section 8 of 
the GRP Basic Provisions, items (a)-(c), address the administrative 
fees and when they are due. They asked whether this provision should 
state that CAT and limited fees are due the first year even if zero 
acres are reported.
    Response: The Agricultural Research, Extension, and Education 
Reform Act of 1998 was passed subsequent to the comment,. This Act 
provided that the administrative fee will be due on the billing date. 
Payment of an administrative fee will not be required if a bona fide 
zero acreage report is filed on or before the acreage reporting date 
for the crop, as specified in paragraph 8(e).
    Comment: An insurance service organization noted that section 8(d) 
of the GRP Basic Provisions addresses premium for limited and 
additional coverage levels, and asked whether there should be some 
reference to the subsidy equaling the imputed premium for CAT policies.
    Response: FCIC does not believe adding imputed premium language is 
necessary and may in fact add detail that would only serve to confuse 
GRP policyholders.
    Comment: An insurance service organization pointed out that 
sections 8(f) and (g) of the GRP Basic Provisions address delinquency 
and termination for non-payment of premium and asks whether there 
should also be some reference in this section to the consequences of 
failure to pay the administrative fees timely.
    Response: FCIC agrees with the recommended change and has added new 
provisions in sections 8(g) and (h).
    Comment: An insurance service organization expressed concern that 
the language in the proposed GRP Corn Crop Provisions provided that 
sweet corn, popcorn, and hybrid seed corn may be insured through a 
``written agreement'' rather than through an ``agreement in writing.'' 
Written agreements, referenced in section 9, have more rules and 
regulations and generally must be submitted to the RSO for approval. 
Companies would object to no longer having the authority to

[[Page 30218]]

approve the insuring of different kinds of corn. Response: FCIC 
disagrees with the recommendation of replacing the language ``written 
agreement'' with ``agreement in writing'' in the GRP Corn Crop 
Provisions because an ``agreement in writing'' alters the contract, but 
does not have the contractual structure and guidelines of a formal 
``written agreement.'' FCIC does agree that the written agreement 
requirement in both the GRP Corn and Sorghum Crop Provisions need not 
require Regional Service Office (RSO) approval. Therefore, while FCIC 
will leave the ``written agreement'' language in the crop provisions, 
it will provide in procedure that a written agreement for adding other 
types of GRP corn or sorghum to the contract be pre-approved by FCIC so 
that companies will be able to approve these written agreements without 
RSO approval.
    Comment: An insurance service organization asked what GRP policy 
provisions would be subject to change by written agreement. For 
example, the current GRP handbook states that only land physically 
located in the insured county is insurable. The commenter questioned 
whether it will now be possible to insure land across the county line 
in the same manner as MPCI (APH) policies. The commenter also asks 
whether such agreements require RSO approval.
    Response: All requirements that may be revised by written agreement 
will specifically be provided in the provision for such requirement in 
the Group Risk Plan Common Policy or the Crop Provision. Section 3 of 
the proposed GRP Basic Provisions provides that, ``Crops grown on 
acreage located in another county must be reported and insured 
separately.'' There are no plans at this time to alter that requirement 
by written agreement. Delegation of authority for approving written 
agreements is set out in FCIC procedure.
    Comment: An insurance service organization commented that 
underwriting details do not belong in the policy but need to be 
resolved before the new policies are approved and issued. They 
expressed concern that the written agreement provisions may add to the 
administrative paperwork and that new GRP procedures should allow 
written agreements to be approved by the companies to the extent 
possible.
    Response: FCIC's goal is to address underwriting details in 
procedure. The program must remain clean and relatively simple to 
administer. Written agreements are only used to temporarily deviate 
from the terms of the policy and should not pose any greater burden 
than for any other policy. Section 9 of the GRP Basic Provisions, 
therefore, has not been amended to allow reinsured companies to approve 
written agreements.
    Comment: An insurance service organization recommended that 
language be added to section 13 of the GRP Basic Provisions to make it 
similar to the MPCI (APH) Basic Provisions which require that all 
policies be voided when more than one policy that insures the same 
interest is discovered, unless the duplication is determined to be 
inadvertent.
    Response: FCIC agrees with the recommendations and has modified 
section 13 to make it more consistent with the provisions in the MPCI 
(APH) Basic Provisions. A provision has also been added to provide the 
insurance provider with recourse in the event that an insured obtained 
the multiple policies intentionally.
    Comment: One commenter from an insurance service organization 
questioned why section 15 of the GRP Basic Provisions still refers to 
the Food Security Act of 1985 since producers are no longer required to 
be in compliance with the Sodbuster/Swampbuster provisions of the Act.
    Response: While producers are no longer required to be in 
compliance with the Sodbuster/Swampbuster provisions of the Food 
Security Act, the Controlled Substance provisions still apply. 
Therefore, no change will be made.
    Comment: An insurance service organization questioned the wisdom of 
listing specific legislation in section 15 of the GRP Basic Provisions 
because the references become outdated when the legislation is revised 
or repealed.
    Response: If one or more of the cited Acts were to be modified or 
repealed, the insured person may no longer be in violation. Therefore, 
FCIC does not believe that references to specific legislation poses any 
problem and has not deleted the references.
    Comment: An insurance service organization questioned the reasons 
for minor differences in the first three and last two paragraphs of 
section 15 of the GRP Basic Provisions. The commenter also questioned 
whether they could be made to match exactly, with the exception of ``up 
to 30 percent'' in FCIC item (b).
    Response: FCIC agrees with comment and has eliminated the minor 
differences in these paragraphs.
    Comment: An insurance service organization noted that the title of 
section 17 ``Determinations'' of the GRP Basic Provisions is 
appropriate for the FCIC policy, but recommended that FCIC change the 
title to ``Arbitration'' for reinsured policies, consistent with the 
1995-NCIS 700B Basic Provisions.
    Response: FCIC believes that the section title ``Determinations'' 
is appropriate for both FCIC and reinsured policies. FCIC has clarified 
that all determinations under reinsured policies will be made by the 
companies, and that disputes are resolved by means of arbitration. 
Accordingly, FCIC will not change the title of this section but has 
redesignated it section 16.
    Comment: Two recommendations from an insurance service organization 
involved modification of provisions in Sec. 407.12(2)(d) of the GRP 
Cotton crop provisions. Because of lack of punctuation, it appeared to 
read that only colored lint cotton planted into an established grass or 
legume is uninsurable rather than all cotton planted in this manner. 
The industry believes that the provisions would be clearer if formatted 
like the MPCI (APH) cotton policies. They also asked that colored lint 
cotton, for example, be made insurable by written agreement.
    Response: FCIC agrees and has reformatted section 2(d) based on the 
MPCI cotton policies and has provided for insurability of colored lint 
cotton and other types by written agreement or when authorized by the 
Special Provisions.
    Comment: One commenter from an insurance service organization 
expressed concern that cotton payment yields are determined 
substantially later than other crops.
    Response: The cotton payment yields are determined later than a 
number of other GRP crops because final yields cannot be determined 
until the cotton is ginned. While an earlier announcement of the cotton 
payment yields is desirable, the logistics of the cotton industry 
preclude it.
    Comment: An insurance service organization recommended modifying 
the definition of harvest in the Group Risk Plan for Forage to read, 
``Removal of the forage from the field, and/or rotational grazing,'' 
rather than simply, ``and rotational grazing,'' to allow for those who 
do one or the other but not both.
    Response: FCIC disagrees with the recommendation. The present 
language ``Removal of the forage from the field and rotational 
grazing'' already allows for an insured who does one or the other but 
not both. Therefore, no change has been made.
    Comment: An insurance service organization recommended that the 
Program Dates table in the Group Risk Plan for Peanuts be modified by 
changing the phrase, ``and all other states,'' in the second group of 
counties

[[Page 30219]]

and states to read, ``and all other states except New Mexico and 
Oklahoma.'' This change is necessary because these two states have a 
March 15 cancellation and termination date and, therefore, belong in 
the third grouping.
    Response: FCIC agrees with the comment and has revised the table 
accordingly.
    Comment: An individual who is both an agriculture lender and 
producer commented that he did not favor the Group Risk Plan of 
Insurance because of weather variability, the many differences among 
producers within a county, the fact that all producers could obtain the 
same amount of insurance, and that the county had to trigger before a 
loss was due. CRC, on the other hand, allows a good proven producer to 
insure a crop for more than a poor producer and cover both price and 
yield risk.
    Response: FCIC recognizes that some insurance products fit some 
individual's needs better than other products. The per acre premium for 
CRC insurance is considerably greater than for GRP coverage. While CRC 
works well for the commenter, neighboring producers whose yields trend 
with the county may find that GRP meets their insuring needs and is a 
better buy for the coverage provided.
    In addition to the changes described above, FCIC has moved the 
contract change date for the Forage Group Risk Plan forward from June 
30 to August 31. This change was based on the availability of NASS 
yield data. The term ``Actuarial Table'' was replaced with ``actuarial 
documents,'' for clarity and for consistency with the MPCI Common 
Policy. The term ``Protection per acre'' was replaced with ``Maximum 
protection per acre'' for clarity. FCIC added the following 
definitions: ``additional coverage,'' ``agreement in writing,'' 
``catastrophic risk protection,'' ``dollar amount of protection per 
acre,'' ``good farming practices,'' ``limited coverage,'' and ``MPCI,'' 
to section 1 for clarification.
    In addition, FCIC has made the following editorial changes to the 
Group Risk Plan of Insurance Basic Provisions:
    1. Section 407.8(c)(4)(ii)--Modified to recognize that an MPCI 
policy may or may not be available to a producer for certain crops and 
counties in their region.
    2. Section 407.9--Added Risk Management Agency (RMA) to the last 
sentence in the first paragraph of Sec. 407.9. The additional language 
recognizes establishment of the Risk Management Agency on October 1, 
1996.

List of Subjects in 7 CFR Part 407

    Crop Insurance, Group Risk Plan, Barley, Corn, Cotton, Forage, 
Peanuts, Sorghum, Soybean, Wheat.

Final Rule

    Accordingly, for the reasons set forth in the preamble, the Federal 
Crop Insurance Corporation adds 7 CFR part 407 to read as follows:

PART 407--GROUP RISK PLAN OF INSURANCE REGULATIONS FOR THE 2000 AND 
SUCCEEDING CROP YEARS

Sec.
407.1  Applicability.
407.2  Availability of Federal crop insurance.
407.3  Premium rates, amounts of protection, and coverage levels.
407.4  OMB control numbers.
407.5  Creditors.
407.6  Good faith reliance on misrepresentation.
407.7  The contract.
407.8  The application and policy.
407.9  Group risk plan common policy.
407.10  Group risk plan for barley.
407.11  Group risk plan for corn.
407.12  Group risk plan for cotton.
407.13  Group risk plan for forage.
407.14  Group risk plan for peanuts.
407.15  Group risk plan for sorghum.
407.16  Group risk plan for soybean.
407.17  Group risk plan for wheat.

    Authority: 7 U.S.C. 1506(1), 1506(p).


Sec. 407.1  Applicability.

    The provisions of this part are applicable only to those crops and 
crop years for which a Crop Provision is contained in this part.


Sec. 407.2  Availability of Federal crop insurance.

    (a) Insurance shall be offered under the provisions of this part on 
the insured crop in counties within the limits prescribed by and in 
accordance with the provisions of the Federal Crop Insurance Act, (7 
U.S.C. 1501 et seq.) (the Act). The crops and counties shall be 
designated by the Manager of the Federal Crop Insurance Corporation 
(FCIC) from those approved by the Board of Directors of FCIC.
    (b) The insurance will be offered through companies reinsured by 
FCIC under the same terms and conditions as the contract contained in 
this part. These contracts are clearly identified as being reinsured by 
FCIC. Additionally, the contract contained in this part may be offered 
directly to producers through agents of the United States Department of 
Agriculture. Those contracts are specifically identified as being 
offered by FCIC.
    (c) No person may have in force more than one insurance policy 
issued or reinsured by FCIC on the same crop for the same crop year, in 
the same county, unless specifically approved in writing by FCIC.
    (d) If a person has more than one contract under the Act 
outstanding on the same crop for the same crop year, in the same 
county, that have not been properly approved by FCIC, all such 
contracts shall be voided for that crop year and the person will be 
liable for the premium on all contracts, unless the person can show to 
the satisfaction of FCIC that the multiple contracts of insurance were 
inadvertent and without the fault of the person.
    (e) If the unapproved multiple contracts of insurance are shown to 
be inadvertent, and without the fault of the insured, the contract with 
the earliest application will be valid and all other contracts on that 
crop in the county for that crop year will be canceled. No liability 
for indemnity or premium will attach to the contracts so canceled.
    (f) The person must repay all amounts received in violation of this 
section with interest at the rate contained in the contract (see 
Sec. 407.8, paragraph 21).
    (g) A person whose contract with FCIC or with a company reinsured 
by FCIC under the Act has been terminated because of violation of the 
terms of the contract is not eligible to obtain crop insurance under 
the Act with FCIC or with a company reinsured by FCIC unless the person 
can show that the termination was improper and should not result in 
subsequent ineligibility.
    (h) All applicants for insurance under the Act must advise the 
insurance provider, in writing at the time of application, of any 
previous applications for insurance or contracts of insurance under the 
Act within the last 5 years and the present status of any such 
applications or insurance.


Sec. 407.3  Premium rates, amounts of protection, and coverage levels.

    (a) The Manager of FCIC shall establish premium rates, amounts of 
protection, and coverage levels for the insured crop that will be 
included in the actuarial documents on file in the insurance provider's 
office. Premium rates, amounts of protection, and coverage levels may 
be changed from year to year.
    (b) At the time the application for insurance is made, the person 
must elect an amount of protection and a coverage level from among 
those contained in the actuarial documents for the crop year.


Sec. 407.4  OMB control numbers.

    The information collection activity associated with this rule has 
been

[[Page 30220]]

previously approved by the Office of Management and Budget (OMB) under 
control number 0563-0053.


Sec. 407.5  Creditors.

    An interest of a person in an insured crop existing by virtue of a 
lien, mortgage, garnishment, levy, execution, bankruptcy, involuntary 
transfer or other similar interest shall not entitle the holder of the 
interest to any benefit under the contract.


Sec. 407.6  Good faith reliance on misrepresentation.

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


Sec. 407.7  The contract.

    The insurance contract shall become effective upon the acceptance 
by FCIC or the reinsured company of a complete, duly executed 
application for insurance on a form prescribed or approved by FCIC. The 
contract shall consist of the accepted application, Group Risk Plan of 
Insurance Basic Provisions, Crop Provisions, Special Provisions, 
Actuarial Table, and any amendments, endorsements, or options thereto. 
Changes made in the contract shall not affect its continuity from year 
to year. Except as may be allowed under Sec. 407.6, and at the sole 
discretion of the Corporation, no indemnity shall be paid unless the 
person complies with all terms and conditions of the contract. The 
forms required under this part and by the contract are available at the 
office of the insurance provider, or the local FSA office, if 
applicable.


Sec. 407.8  The application and policy.

    (a) Application for insurance, on a form prescribed or approved by 
FCIC, must be made by any person who wishes to participate in the 
program in order to cover such person's share in the insured crop as 
landlord, owner-operator, tenant, or other crop ownership interest. No 
other person's interest in the crop may be insured under the 
application. The application must be submitted to the insurance 
provider on or before the applicable sales closing date on file in the 
insurance provider's local office.
    (b) FCIC or the reinsured company may reject or no longer accept 
applications upon the FCIC's determination that the insurance risk is 
excessive. The Manager of the Corporation is authorized in any crop 
year to extend the sales closing date for submitting applications for 
fall planted crops, unless prohibited by law, upon determining that the 
probability and severity of claims will not increase because of the 
extension, by placing the extended date on file in the insurance 
provider's office and publishing a notice in the Federal Register. If 
adverse conditions should develop during the extended period, the 
Corporation will require the insurance provider to immediately 
discontinue acceptance of applications.
    (c) Since this Group Risk Plan differs significantly from 
traditional Multiple Peril Crop Insurance, persons who purchase the 
Group Risk Plan and their crop insurance agents will be required to 
execute an ``Acknowledgment of Differences'' that explains that the 
terms and conditions of the Group Risk Plan are different from 
traditional crop insurance in that:
    (1) The Group Risk Plan indemnity payment, if any, will be made 
after the Group Risk Plan premium is received;
    (2) A person may have a low yield on his or her individual farm and 
not receive a payment under Group Risk Plan; and
    (3) A person may not have any loss of production and still collect 
under the policy if a loss of production is general in the area.
    (4) By executing the ``Acknowledgment of Differences,'' the insured 
certifies that:
    (i) He or she understands the terms of the Group Risk Plan;
    (ii) An MPCI policy may be available in the county; and
    (iii) Both a Group Risk Plan and a MPCI Plan cannot be purchased on 
the same crop by the same insured in the same county.


Sec. 407.9  Group risk plan common policy.

    The provisions of the Group Risk Plan Common Policy for the 2000 
and succeeding crop years are as follows:

[FCIC policies]

Department of Agriculture

Federal Crop Insurance Corporation

Group Risk Plan Common Policy

[Reinsured policies]

(Appropriate title for insurance provider)

(This is a continuous policy. Refer to Section 18.)

[FCIC policies]

    This insurance policy establishes a risk management program 
developed by the Federal Crop Insurance Corporation (FCIC), an 
agency of the United States Government, under the authority of the 
Federal Crop Insurance Act (Act), as amended (7 U.S.C. 1501 et 
seq.). All terms of the policy and rights and responsibilities of 
the parties hereto are subject to the Act and all regulations under 
the Act published in 7 CFR chapter IV. The provisions of this policy 
may not be waived or varied in any way by the crop insurance 
representative, or any other representative or employee of FCIC, the 
Risk

[[Page 30221]]

Management Agency (RMA) or the Farm Service Agency (FSA). In the 
event that the company cannot pay a loss, the claim will be settled 
in accordance with the provisions of the policy and paid by FCIC. No 
state guarantee fund will be liable to pay the loss.
    Throughout this policy, ``you'' and ``your'' refer to the person 
shown on the accepted application and ``we,'' ``us,'' and ``our'' 
refer to the Federal Crop Insurance Corporation. Unless the context 
indicates otherwise, the use of the plural form of a word includes 
the singular use and the singular form of the word includes the 
plural.

[Reinsured policies]

    This insurance policy establishes a risk management program 
created by the Federal Crop Insurance Corporation (FCIC), an agency 
of the United States Government, under the authority of the Federal 
Crop Insurance Act (Act), as amended (7 U. S. C. 1501 et seq.).
    This insurance policy is reinsured by FCIC under the provisions 
of the Act. All terms of the policy and rights and responsibilities 
of the parties are subject to the Act and all regulations under the 
Act published in 7 CFR chapter IV, and may not be waived or varied 
in any way by the crop insurance representative, any other 
representative or employee of the company, any representative or 
employee of FCIC, the Risk Management Agency, or the Farm Service 
Agency (FSA). All provisions of State and local law in conflict with 
the provisions of this policy as published in 7 CFR part 407 are 
preempted and the provisions of such part will control.
    Throughout this policy, ``you'' and ``your'' refer to the person 
shown on the accepted application and ``we,'' ``us,'' and ``our'' 
refer to the reinsured company issuing this policy. Unless the 
context indicates otherwise, the use of the plural form of a word 
includes the singular use and the singular form of the word includes 
the plural.

[Both policies]

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

Agreement To Insure

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

Terms and Conditions

Group Risk Plan of Insurance Basic Provisions

1. Definitions

    Acreage report. A report required by section 7 of these Basic 
Provisions that contains, in addition to other information, your 
report of your share of all acreage of an insured crop in the 
county, whether insurable or not insurable.
    Acreage reporting date. The date contained in the Special 
Provisions by which you must submit your acreage report in order to 
be eligible for Group Risk Insurance.
    Act. Federal Crop Insurance Act, (7 U.S.C. 1501 et seq.).
    Actuarial documents. The material for the crop year which is 
available for public inspection in your insurance provider's local 
office, and which shows the maximum protection per acre, expected 
county yield, coverage levels, premium rates, practices, program 
dates, and other related information regarding crop insurance in the 
county.
    Additional coverage. For GRP, an amount of protection greater 
than or equal to: 80 percent of the expected county yield 
indemnified at 95 percent of the maximum amount of protection (80/
95); or 85 percent of the expected county yield indemnified at 90 
percent of the maximum amount of protection (85/90); or 90 percent 
of the expected county yield indemnified at 85 percent of the of the 
maximum amount of protection (90/85). The protection is on a per 
acre basis as specified in the actuarial documents for the crop, 
practice, and type.
    Billing date. The date, contained in the actuarial documents, by 
which we will bill you for the premium and administrative fee on the 
insured crop.
    Cancellation date. The calendar date specified in the Crop 
Provisions on which insurance for the next crop year will 
automatically renew unless the policy is canceled in writing by 
either you or us or terminated in accordance with policy terms.
    Catastrophic risk protection. The minimum level of coverage 
offered by FCIC. For GRP, an amount of protection equal to 65 
percent of the expected county yield indemnified at 55 percent of 
the maximum protection per acre specified in the actuarial documents 
for the crop, practice, and type.
    County. Any county, parish, or other political subdivision of a 
state shown on your accepted application.
    Crop practice. The combination of inputs such as fertilizer, 
herbicide, and pesticide, and operations such as planting, 
cultivation, and irrigation, used to produce the insured crop. The 
insurable practices are contained in the actuarial documents.
    Crop Provisions. The part of the policy that contains the 
specific provisions of insurance for each insured crop.
    Crop year. The period of time within which the insured crop is 
normally grown and designated by the calendar year in which the crop 
is normally harvested.
    Dollar amount of protection per acre. The percentage of coverage 
selected by you multiplied by the maximum protection per acre 
specified in the actuarial documents for the crop, practice, and 
type. The dollar amount of protection per acre is shown on your 
Summary of Protection.
    Expected county yield. The yield contained in the actuarial 
documents, on which your coverage for the crop year is based. This 
yield is determined using historical NASS county average yields, as 
adjusted by FCIC.
    FCIC. The Federal Crop Insurance Corporation, a wholly owned 
corporation within USDA.
    FSA. The Farm Service Agency, an agency of the United States 
Department of Agriculture, or a successor agency.
    Good farming practices. The cultural practices generally in use 
in the county for the crop to make normal progress toward maturity, 
and are those recognized by the Cooperative State Research, 
Education, and Extension Service as compatible with agronomic and 
weather conditions in the county.
    GRP. Group Risk Plan of Insurance.
    Insurance provider. The FSA or a private insurance company 
approved by FCIC which

[[Page 30222]]

provides crop insurance coverage to producers participating in any 
Federal crop insurance program administered under the Act.
    Limited coverage. For GRP an amount of protection greater than 
or equal to 70 percent of the expected county yield indemnified at 
60 percent of the maximum amount of protection (70/60) and less than 
80/95, 85/90, and 90/85.
    Maximum protection per acre. The highest amount of protection 
specified in the actuarial documents.
    MPCI. Multiple peril crop insurance, an insurance product based 
on an individual yield or amount of insurance.
    NASS. National Agricultural Statistics Service, an agency within 
USDA, or its successor, that publishes the official United States 
Government yield estimates.
    Net acres. The planted acreage of the insured crop multiplied by 
your share.
    Payment yield. The yield determined by FCIC based on NASS yields 
for each insurable crop's type and practice, as adjusted by FCIC, 
and used to determine whether an indemnity will be due.
    Person. An individual, partnership, association, corporation, 
estate, trust, or other legal entity, and wherever applicable, a 
state or a political subdivision or agency of a state.
    Sales closing date. The date contained in the Special Provisions 
by which an application must be filed. The last date by which you 
may change your crop insurance coverage for a crop year.
    Share. Your percentage of interest in the insured crop, as an 
owner, operator, or tenant at the time insurance attaches. Premium 
will be determined on your share as of the acreage reporting date. 
However, only for the purpose of determining the amount of 
indemnity, your share will not exceed your share at the acreage 
reporting date or on the date of harvest, whichever is less.
    Special provisions. The part of the policy that contains 
specific provisions of insurance for each crop that may vary by 
geographic area.
    Subsidy. The portion of your premium, shown on the actuarial 
documents as limited and maximum amounts per acre, that FCIC will 
pay in accordance with the Act.
    Summary of protection. Our statement to you of the crop insured, 
dollar amount of protection per acre, premiums, and other 
information obtained from your accepted application, acreage report, 
and the actuarial documents.
    Termination date. The calendar date contained in the Crop 
Provisions upon which insurance ceases to be in effect because of 
nonpayment of any amount due us under the policy, including premium 
and administrative fees.
    Trigger yield. The result of multiplying the expected county 
yield by the coverage level percentage chosen by you. When the 
payment yield falls below the trigger yield, an indemnity is due.
    Type. Plants of the insured crop having common traits or 
characteristics that distinguish them as a group or class, and which 
are designated in the actuarial documents.
    USDA. United States Department of Agriculture.

2. Insured Crop

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

3. Insured and Insurable Acreage

    (a) The insurable acreage is all of the acreage of the insured 
crop for which premium rates are provided by the actuarial documents 
and in which you have a share and which is in the county listed in 
your accepted application. The dollar amount of protection per acre, 
amount of premium, and indemnity will be calculated separately for 
each county, type, and practice.
    (b) Only the acreage seeded to the insured crop on or before the 
acreage reporting date (unless otherwise provided in the Crop 
Provisions) and physically located in the county listed on your 
accepted application will be insured. Crops grown on acreage 
physically located in another county must be reported and insured 
separately.
    (c) We will not insure any crop grown on any acreage where the 
crop was destroyed or put to another use during the insurance period 
for the purpose of conforming with, or obtaining a payment under, 
any other program administered by the USDA.
    (d) We will not insure any acreage where you have failed to 
follow good farming practices for the insured crop.

4. Policy Protection

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

5. Coverage Levels

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

6. Payment Calculation Factor

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

7. Report of Acreage and Share

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

8. Administrative Fees and Annual Premium

    (a) If you obtain a catastrophic risk protection GRP policy you 
will pay an administrative fee:
    (1) Of $60 per crop per county;
    (2) Payable to the insurance provider on the billing date for 
the crop.
    (b) If you obtain a limited coverage GRP policy, you will pay an 
administrative fee under the same terms and conditions as the 
premium for the policy:
    (1) Of $50 per crop per county;
    (2) Not to exceed $200 per county;
    (3) Up to a maximum of $600 per producer.
    (4) Limited resource farmers as defined at 7 CFR 457.8 may apply 
for a waiver of administrative fees for the limited coverage policy.
    (c) If you obtain an additional coverage GRP policy, you will 
pay an administrative fee:
    (1) Of $20 per crop per county;
    (2) Payable under the same terms and conditions as the premium 
for the policy.
    (d) For limited and additional coverage GRP policies, your 
premium is determined by multiplying your policy protection by the 
premium rate per hundred dollars of protection for your coverage 
level contained

[[Page 30223]]

in the actuarial documents, by 0.01, and subtracting the applicable 
subsidy.
    (e) For catastrophic risk protection, limited, and additional 
coverage GRP policies, payment of an administrative fee will not be 
required if you file a bona fide zero acreage report on or before 
the acreage reporting date for the crop (if you falsely file a zero 
acreage report you may be subject to criminal and administrative 
sanctions).
    (f) The annual premium is earned and payable at the time the 
insured crop is planted. For each insured crop, you will be billed 
for premium and the administrative fee by the billing date specified 
in the Special Provisions. Premium, administrative fee, and any 
other amount owed us is due on the billing date and interest will 
accrue if the premium, administrative fee, or any other amount owed 
is not received by us before the first day of the month following 
the premium billing date.
    (g) The premium, administrative fee, and any other amount due, 
plus any accrued interest, will be considered delinquent if it is 
not paid on or before the termination date specified in the Crop 
Provisions. This may affect your eligibility for benefits under 
other USDA programs. A debt for any crop insured with us under the 
authority of the Act will be deducted from any indemnity due you for 
this or any other crop insured with us.
    (h) Failure to pay the premium and any administrative fee due, 
plus any accrued interest and penalties, by the termination date 
will make you ineligible for any crop insurance under the Act for 
subsequent crop years until the sales closing date after the date 
the debt, including interest and penalties, is paid or satisfactory 
arrangements acceptable to us for such payment are made.

9. Written Agreements

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

10. Access to Insured Crop and Record Retention

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

11. Transfer of Coverage and Right to Indemnity

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

12. Assignment of Indemnity

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

13. Other Insurance

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

14. Legal Action Against Us

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

[FCIC policy]

15. Restrictions, Limitations, and Amounts Due Us

    (a) We may restrict the amount of acreage we will insure to the 
amount allowed under any acreage limitation program established by 
USDA.
    (b) Violation of Federal statutes including, but not limited to, 
the Act; the controlled substance provisions of the Food Security 
Act of 1985; the Food, Agriculture, Conservation, and Trade Act of 
1990; and the Omnibus Budget Reconciliation Act of 1993, and any 
regulation promulgated thereunder, will result in cancellation, 
termination, or voidance of your crop insurance contract. We will 
recover any and all monies paid to you or received by you during 
your period of ineligibility, and your premium will be refunded, 
less an amount for expenses and handling not to exceed 20 percent of 
the premium paid or to be paid by you.
    (c) Our maximum liability under this policy will be limited to 
the policy protection specified in section 4 of this policy. Under 
no circumstances will we be liable for the payment of damages 
(compensatory, punitive, or other), attorney's fees, or other 
charges in connection with any claim for indemnity, whether we 
approve or disapprove such indemnity.
    (d) We will pay simple interest computed on the net indemnity 
ultimately found to be due by us or determined by a final judgment 
of a court of competent jurisdiction or a final administrative 
determination from, and including, the 61st day after the date we 
receive the NASS county yield estimates for the insured crop year. 
Interest will be paid only if the reason for our failure to timely 
pay is not due to your failure to provide information or other 
material necessary for the computation or payment of the indemnity. 
The interest rate will be that established by the Secretary of the 
Treasury under section 12 of the Contract Disputes Act of 1978 (41 
U.S.C. 611 et seq.), and published in the Federal Register.
    (e) Any amount illegally or erroneously paid to you or that is 
owed to us but is delinquent may be recovered by us through offset 
by deducting it from any loan or payment due you under any Act of 
Congress or program administered by any United States Government 
Agency, or by other collection action.
    (f) Interest will accrue at the rate not to exceed 1.25 percent 
simple interest per calendar month, or any part thereof, on any 
unpaid premium or administrative fee balance. For the purpose of 
premium and administrative fee amounts due us, interest will begin 
to accrue on the first day of the month following the premium 
billing date specified in the Special Provisions.
    (g) For the purpose of any other amounts due us, such as 
repayment of indemnities found not to have been earned:
    (1) Interest will start to accrue on the date that notice is 
issued to you for the collection of the unearned amount;
    (2) Amounts found due under this paragraph will not be charged 
interest if payment is made in full within 30 days of issuance of 
the notice by us;
    (3) The amount will be considered delinquent if not paid within 
30 days of the date the notice is issued by us;
    (4) Penalties and interest will be charged in accordance with 31 
U.S.C. 3717 and 4 CFR part 102; and
    (5) The penalty for accounts more than 90 days delinquent is an 
additional 6 percent per annum.
    (h) Interest on any amount due us found to have been received by 
you because of fraud, misrepresentation, or presentation by you of a 
false claim will start on the date you received the amount with the 
additional 6 percent penalty beginning on the 31st day after the 
notice of amount due is issued to you. This interest is in addition 
to any other amount found to be due under any other Federal criminal 
or civil statute.

[[Page 30224]]

    (i) If we determine that it is necessary to contract with a 
collection agency, refer the debt to governmental collection 
centers, the Department of Treasury Offset Program, or to employ an 
attorney to assist in collection, you agree to pay all of the 
expenses of collection.
    (j) All amounts paid by you will be applied first to expenses of 
collection if any, second to reduction of any penalties which may 
have been assessed, then to reduction of accrued interest, and 
finally, to reduction of the principal balance.

[Reinsured policy]

15. Restrictions, Limitations, and Amounts Due Us

    (a) We may restrict the amount of acreage we will insure to the 
amount allowed under any acreage limitation program established by 
USDA.
    (b) Violation of Federal statutes including, but not limited to, 
the Act; the controlled substance provisions of the Food Security 
Act of 1985; the Food, Agriculture, Conservation, and Trade Act of 
1990; and the Omnibus Budget Reconciliation Act of 1993, and any 
regulation promulgated thereunder, will result in cancellation, 
termination, or voidance of your crop insurance contract. We will 
recover any and all monies paid to you or received by you during 
your period of ineligibility, and your premium will be refunded, 
less a reasonable amount for expenses and handling not to exceed 20 
percent of the premium paid or to be paid by you.
    (c) Our maximum liability under this policy will be limited to 
the policy protection specified in section 4 of this policy. Under 
no circumstances will we be liable for the payment of damages 
(compensatory, punitive, or other), attorney's fees, or other 
charges in connection with any claim for indemnity, whether we 
approve or disapprove such indemnity.
    (d) Interest will accrue at the rate not to exceed 1.25 percent 
simple interest per calendar month, or any part thereof, on any 
unpaid premium or administrative fee balance. For the purpose of 
premium and administrative fee amounts due us, interest will begin 
to accrue on the first day of the month following the premium 
billing date specified in the Special Provisions.
    (e) For the purpose of any amounts due us, such as repayment of 
indemnities found not to have been earned, interest will start to 
accrue on the date that notice is issued to you for the collection 
of the unearned amount. Amounts found due under this paragraph will 
not be charged interest if payment in full is made within 30 days of 
issuance of notice by us. The amount will be considered delinquent 
if not paid in full within 30 days of the date the notice is issued 
by us.
    (f) All amounts paid will be applied first to expenses of 
collection (see subsection (g) of this section) if any, second to 
reduction of accrued interest, and then to reduction of the 
principal balance.
    (g) If we determine that it is necessary to contract with a 
collection agency or to employ an attorney to assist in collection, 
you agree to pay all of the expenses of collection.
    (h) A portion of the amount paid to you to which you were not 
entitled may be collected through administrative offset from 
payments you receive from United States government agencies in 
accordance with 31 U.S.C. chapter 37.

[FCIC policy]

16. Determinations

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

[Reinsured policy]

16. Determinations

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

[Both policies]

17. Holidays and Weekends

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

18. Life of Policy, Cancellation, and Termination

    (a) This is a continuous policy and will remain in effect for 
each crop year following the acceptance of the original application 
until canceled by you in accordance with the terms of the policy or 
terminated by operation of the terms of the policy or by us.
    (b) Your application for insurance must contain all the 
information required by us to insure the crop. Applications that do 
not contain all social security numbers and employer identification 
numbers, as applicable (except as stated herein), coverage level, 
price election, crop, type, variety, or class, plan of insurance, 
and any other material information required to insure the crop, are 
not acceptable. If a person with a substantial beneficial interest 
in the insured crop refuses to provide a social security number or 
employer identification number, the amount of coverage available 
under the policy will be reduced proportionately by that person's 
share of the crop.
    (c) After acceptance of the application, you may not cancel this 
policy for the initial crop year. Thereafter, the policy will 
continue in force for each succeeding crop year unless canceled or 
terminated as provided below.
    (d) Either you or we may cancel this policy after the initial 
crop year by providing written notice to the other on or before the 
cancellation date shown in the Crop Provisions.
    (e) If any amount due, including premium, is not paid on or 
before the termination date for the crop on which an amount is due:
    (1) For a policy with the unpaid premium, the policy will 
terminate effective on the termination date immediately subsequent 
to the billing date for the crop year;
    (2) For a policy with other amounts due, the policy will 
terminate effective on the termination date immediately after the 
account becomes delinquent;
    (3) Ineligibility will be effective as of the date that the 
policy was terminated for the crop for which you failed to pay an 
amount owed and for all other insured crops with coincidental 
termination dates;
    (4) All other policies that are issued by us under the authority 
of the Act will also terminate as of the next termination date 
contained in the applicable policy;
    (5) If you are ineligible, you may not obtain any crop insurance 
under the Act until payment is made, you execute an agreement to 
repay the debt and make the payments in accordance with the 
agreement, or you file a petition to have your debts discharged in 
bankruptcy;
    (6) If you execute an agreement to repay the debt and fail to 
timely make any scheduled payment, you will be ineligible for crop 
insurance effective on the date the payment was due until the debt 
is paid in full or you file a petition to discharge the debt in 
bankruptcy and subsequently obtain discharge of the amounts due. 
Dismissal of the bankruptcy petition before discharge will void all 
policies in effect retroactive to the date you were originally 
determined ineligible to participate;
    (7) Once the policy is terminated, the policy cannot be 
reinstated for the current crop year unless the termination was in 
error;
    (8) After you again become eligible for crop insurance, if you 
want to obtain coverage for your crops, you must reapply on or 
before the sales closing date for the crop (since applications for 
crop insurance cannot be accepted after the sales closing date, if 
you make any payment after the sales closing date, you cannot apply 
for insurance until the next crop year); and
    (9) If we deduct the amount due us from an indemnity, the date 
of payment for the purpose of this section will be the date you sign 
the properly executed claim for indemnity.
    (10) For example, if crop A, with a termination date of October 
31, 1997, and crop B, with a termination date of March 15, 1998, are 
insured and you do not pay the premium for crop A by the termination 
date, you are ineligible for crop insurance as of October 31, 1997, 
and crop A's policy is terminated on that date. Crop B's policy is 
terminated as of March 15, 1998. If you enter an agreement to repay 
the debt on April 25, 1998, you can apply for insurance for crop A 
by the October 31, 1998, sales closing date and crop B by the March 
15, 1999, sales closing date. If you fail to make a scheduled 
payment on November 1, 1998, you will be ineligible for crop 
insurance effective on November 1, 1998, and you will not be 
eligible unless the debt is paid in full or you file a petition to 
have the debt discharged in bankruptcy and subsequently receive 
discharge.
    (f) If you die, disappear, or are judicially declared 
incompetent, or if you are an entity other than an individual and 
such entity is dissolved, the policy will terminate as of the

[[Page 30225]]

date of death, judicial declaration, or dissolution. If such event 
occurs after coverage begins for any crop year, the policy will 
continue in force through the crop year and terminate at the end of 
the insurance period and any indemnity will be paid to the person or 
persons determined to be beneficially entitled to the indemnity. The 
premium will be deducted from the indemnity or collected from the 
estate. Death of a partner in a partnership will dissolve the 
partnership unless the partnership agreement provides otherwise. If 
two or more persons having a joint interest are insured jointly, 
death of one of the persons will dissolve the joint entity.
    (g) We may terminate your policy if no premium is earned for 3 
consecutive years.
    (h) The cancellation and termination dates are contained in the 
Crop Provisions.

19. Contract Changes

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

20. Eligibility for Other Farm Program Benefits

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

An Example To Demonstrate How GRP Works

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

Scenario 1 (likely)

    FCIC issues a payment yield of 46 bushels per acre. This is 
above both producers' trigger yields, so no indemnity payment is 
made, even if one or both have individual yields that are below the 
trigger yield.

Scenario 2 (less likely)

    FCIC issues a payment yield of 38 bushels per acre. A's payment 
calculation factor is 0.062 ((40.5-38)40.5). This number 
multiplied by the policy protection yields an indemnity payment of 
$1,984 (.062  x  $32,000). B's trigger yield is less than the 
payment yield, so no indemnity payment is made.

Scenario 3 (least likely)

    FCIC issues a payment yield of 22 bushels per acre. A's payment 
calculation factor is 0.457 ((40.5-22)40.5). The payment is 
$14,624 (0.457  x  $32,000). B's payment calculation factor is 0.349 
((33.8-22) 33.8), and the final indemnity payment is $12,913 
(0.349  x  $37,000).


Sec. 407.10  Group risk plan for barley.

    The provisions of the Group Risk Plan for Barley for the 2000 and 
succeeding crop years are as follows:

1. Definitions

    Harvest. Combining or threshing the barley for grain.
    NASS yield. The yield calculated by dividing the NASS estimate 
of the barley production in the county, by the NASS estimate of the 
acres of barley in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether harvested or 
planted acreage is used to calculate the yield used to establish the 
expected county yield and calculate indemnities.
    Planted acreage. Land in which the barley seed has been placed 
by a machine appropriate for the insured crop and planting method, 
at the correct depth, into a seedbed that has been properly prepared 
for the planting method and production practice. Land on which seed 
is initially spread onto the soil surface by any method and which 
subsequently is mechanically incorporated into the soil in a timely 
manner and at the proper depth, will also be considered planted.

2. Crop Insured

    The insured crop will be all barley:
    (a) Grown on insurable acreage in the county or counties listed 
in the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as grain; and
    (d) Not planted into an established grass or legume, 
interplanted with another crop, or planted as a nurse crop, unless 
seeded at the normal rate and intended for harvest as grain.

3. Payment

    (a) A payment will be made only if the payment yield for the 
insured crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to the April 1 
following the crop year.
    (c) We will issue any payment to you prior to the May 1 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice 
and type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS 
yield may be subsequently revised.

4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Kit Carson, Lincoln, Elbert, El Paso,       September 30.........................  June 30.
 Pueblo, Las Animas Counties, Colorado and
 all Colorado Counties south and east
 thereof; all New Mexico counties except
 Taos County; Kansas; Missouri; Illinois;
 Indiana; Ohio; Pennsylvania; New York;
 Massachusetts; and all states south and
 east thereof.
Arizona; California; and Clark and Nye      October 31...........................  June 30.
 Counties, Nevada.
All Colorado counties except Kit Carson,    March 15.............................  November 30.
 Lincoln, Elbert, El Paso, Pueblo, and Las
 Animas Counties and all Colorado counties
 south and east thereof; all Nevada
 counties except Clark and Nye Counties;
 Taos County, New Mexico; and all other
 states except: Arizona, California, and
 (except) Kansas, Missouri, Illinois,
 Indiana, Ohio, Pennsylvania, New York,
 and Massachusetts and all States south
 and east thereof.
----------------------------------------------------------------------------------------------------------------


[[Page 30226]]

Sec. 407.11  Group risk plan for corn.

    The provisions of the Group Risk Plan for Corn for the 2000 and 
succeeding crop years are as follows:

1. Definitions

    Harvest. Combining or picking corn for grain, or severing the 
stalk from the land and chopping the stalk and ear for the purpose 
of livestock feed.
    NASS yield. The yield calculated by dividing the NASS estimate 
of the corn for grain production in the county, by the NASS estimate 
of the acres of corn for grain in the county, as specified in the 
actuarial documents. The actuarial documents will specify whether 
harvested or planted acreage is used to calculate the yield used to 
establish the expected county yield and calculate indemnities.
    Planted acreage. Land in which the corn seed has been placed by 
a machine appropriate for the insured crop and planting method, at 
the correct depth, into a seedbed that has been properly prepared 
for the planting method and production practice. Broadcast and 
subsequent mechanical incorporation of the corn seed is not allowed.

2. Crop Insured

    (a) The insured crop will be all field corn:
    (1) Grown on insurable acreage in the county listed in the 
accepted application;
    (2) Properly planted and reported by the acreage reporting date;
    (3) Planted with the intent to be harvested as grain, silage, or 
green chop; and
    (4) Not planted into an established grass or legume or 
interplanted with another crop.
    (b) Hybrid seed corn, popcorn, sweet corn, and other specialty 
corn may only be insured if a written agreement exists between you 
and us. Your request to insure such crop must be in writing and 
submitted to your agent not later than the sales closing date.

3. Payment

    (a) A payment will be made only if the payment yield for the 
insured crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 16 
following the crop year.
    (c) We will issue any payment to you prior to the May 16 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice 
and type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS 
yield may be subsequently revised.

4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,   January 15...........................  November 30.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson Counties, Texas, and all Texas
 counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves,       February 15..........................  November 30.
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas Counties
 lying south and east thereof to and
 including Terrell, Crockett, Sutton,
 Kimble, Gillespie, Blanco, Comal,
 Guadalupe, Gonzales, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda
 Counties, Texas.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina.
All other Texas counties and all other      March 15.............................  November 30.
 states.
----------------------------------------------------------------------------------------------------------------

Sec. 407.12   Group risk plan for cotton.

    The provisions of the Group Risk Plan for Cotton for the 2000 and 
succeeding crop years are as follows:

1. Definitions

    Harvest. Removal of the seed cotton from the stalk.
    NASS yield. The yield calculated by dividing the NASS estimate 
of upland cotton production in the county, by the NASS estimate of 
the acres of upland cotton in the county, as specified in the 
actuarial documents. The actuarial documents will specify whether 
harvested or planted acreage is used to calculate the yield used to 
establish the expected county yield and calculate indemnities.
    Planted acreage. Land in which the cotton seed has been placed 
by a machine appropriate for the insured crop and planting method, 
at the correct depth, into a seedbed that has been properly prepared 
for the planting method and production practice. Broadcast and 
subsequent mechanical incorporation of the cotton seed is not 
allowed.

2. Crop Insured

    The insured crop will be all upland cotton:
    (a) Grown on insurable acreage in the county or counties listed 
in the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested; and
    (d) That is not (unless allowed by the Special Provisions or by 
written agreement):
    (1) Colored cotton lint;
    (2) Planted into an established grass or legume;
    (3) Interplanted with another spring planted crop;
    (4) Grown on acreage in which a hay crop was harvested in the 
same calendar year unless the acreage is irrigated; or
    (5) Grown on acreage on which a small grain crop reached the 
heading stage in the same calendar year unless the acreage is 
irrigated or adequate measures are taken to terminate the small 
grain crop prior to heading and less than 50 percent of the small 
grain plants reach the heading stage.

3. Payment.

    (a) A payment will be made only if the payment yield for the 
insured crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to July 16 following 
the crop year.
    (c) We will issue any payment to you prior to the August 16 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice 
and type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS 
yield may be subsequently revised.

4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,   January 15...........................  November 30.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson Counties, Texas, and all Texas
 counties lying south thereof.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina;
 El Paso, Hudspeth, Culberson, Reeves,
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas counties
 lying south and east thereof to and
 including Terrell, Crockett, Sutton,
 Kimble, Gillespie, Blanco, Comal,
 Guadalupe, Gonzales, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda
 Counties, Texas.
All other Texas counties and all other      March 15.............................  November 30.
 States.
----------------------------------------------------------------------------------------------------------------


[[Page 30227]]

Sec. 407.13   Group risk plan for forage.

    The provisions of the Group Risk Plan for Forage for the 2000 and 
succeeding crop years are as follows:

1. Definitions

    Harvest. Removal of the forage from the field, and rotational 
grazing.
    NASS yield. The yield calculated by dividing the NASS estimate 
of the production of hay in the county by the NASS estimate of the 
acres of hay in the county, as specified in the actuarial documents. 
The actuarial documents will specify whether the harvested or 
planted acreage is used to calculate the yield used to establish the 
expected county yield and calculate indemnities.
    Planted acreage. Land seeded to forage, by a planting method 
appropriate for forage, into a properly prepared seedbed.
    Rotational grazing. The defoliation of the insured forage by 
livestock, within a pasturing system whereby the forage field is 
subdivided into smaller parcels and livestock are moved from one 
area to another, allowing a period of grazing followed by a period 
for forage regrowth.

2. Crop Insured

    The insured crop will be the forage types shown on the Special 
Provisions:
    (a) Grown on insurable acreage in the county or counties listed 
in the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Intended for harvest; and
    (d) Not grown with another crop.

3. Insurable Acreage

    In addition to section 3 of the Basic Provisions of the Group 
Risk Plan Common Policy, acreage seeded to forage after July 1 of 
the previous crop year will not be insurable. Acreage physically 
located in another county not listed on the accepted application is 
not insured under this policy.

4. Payment

    (a) A payment will be made only if the payment yield for the 
insured crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to May 1 following 
the crop year.
    (c) We will issue any payment to you prior to the May 31 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice 
and type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS 
yield may be subsequently revised.

5. Program Dates

    November 30 is the Cancellation and Termination Date for all 
states. The Contract Change Date is August 31 for all states.

6. Annual Premium

    In lieu of section 8(g) of the Basic Provisions of the Group 
Risk Plan Common Policy, the annual premium is earned and payable on 
the acreage reporting date. You will be billed for premium due on 
the date shown in the Special Provisions. The premium will be 
determined based on the rate shown on the actuarial documents.


Sec. 407.14  Group risk plan for peanuts.

    The provisions of the Group Risk Plan for Peanuts for the 2000 and 
succeeding crop years are as follows:

1. Definitions

    Harvest. Combining or threshing the peanuts.
    NASS yield. The yield calculated by dividing the NASS estimate 
of peanut production in the county, by the NASS estimate of the 
acres of peanuts in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether the 
harvested or planted acreage is used to calculate the yield used to 
establish the expected county yield and calculate indemnities.
    Planted acreage. Land in which the peanut seed has been placed 
by a machine appropriate for the insured crop and planting method, 
at the correct depth, into a seedbed that has been properly prepared 
for the planting method and production practice.

2. Crop Insured

    The insured crop will be all peanuts:
    (a) Grown on insurable acreage in the county or counties listed 
in the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as peanuts; and
    (d) Not interplanted with an established grass or legume or 
interplanted with another crop.

3. Payment

    (a) A payment will be made only if the payment yield for the 
insured crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to June 16 following 
the crop year.
    (c) We will issue any payment to you prior to the July 16 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice 
and type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS 
yield may be subsequently revised.

4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak,   January 15...........................  November 30.
 McMullen, La Salle, and Dimmit Counties,
 Texas and all Texas Counties lying south
 thereof.
El Paso, Hudspeth, Culberson, Reeves,       February 28..........................  November 30.
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, Cooke
 Counties, Texas, and all Texas counties
 south and east thereof; and all other
 states except New Mexico, Oklahoma, and
 Virginia.
New Mexico; Oklahoma; Virginia; and all     March 15.............................  November 30.
 other Texas Counties.
----------------------------------------------------------------------------------------------------------------

Sec. 407.15  Group risk plan for sorghum.

    The provisions of the Group Risk Plan for Sorghum for the 2000 and 
succeeding crop years are as follows:

1. Definitions

    Harvest. Combining or threshing the sorghum for grain, or 
severing the stalk from the land and chopping the stalk and head for 
the purpose of livestock feed.
    NASS yield. The yield calculated by dividing the NASS estimate 
of sorghum for grain production in the county, by the NASS estimate 
of the acres of sorghum for grain in the county, as specified in the 
actuarial documents. The actuarial documents will specify whether 
the harvested or planted acreage is used to calculate the yield used 
to establish the expected county yield and calculate indemnities.
    Planted acreage. Land in which the sorghum seed has been placed 
by a machine appropriate for the insured crop and planting method, 
at the correct depth, into a seedbed that has been properly prepared 
for the planting method and production practice. Broadcast and 
subsequent mechanical incorporation of the sorghum seed is not 
allowed.

2. Crop Insured

    (a) The insured crop will be all sorghum:
    (1) Grown on insurable acreage in the county or counties listed 
in the accepted application;
    (2) Properly planted and reported by the acreage reporting date;
    (3) Planted with the intent to be harvested as grain or silage; 
and
    (4) Not interplanted with an established grass or legume or 
interplanted with another crop.
    (b) Hybrid sorghum seed may only be insured if a written 
agreement exists between you and us. Your request to insure such 
crop must be in writing and submitted to your agent not later than 
the sales closing date.

3. Payment

    (a) A payment will be made only if the payment yield for the 
insured crop year is less than your trigger yield.

[[Page 30228]]

    (b) Payment yields will be determined prior to April 16 
following the crop year.
    (c) We will issue any payment to you prior to the May 16 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice 
and type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS 
yield may be subsequently revised.

4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                Cancellation and  termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Val Verde, Edwards, Kerr, Kendall, Bexar,   January 15...........................  November 30.
 Wilson, Karnes, Goliad, Victoria, and
 Jackson Counties, Texas, and all Texas
 counties lying south thereof.
El Paso, Hudspeth, Culberson, Reeves,       February 15..........................  November 30.
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas counties
 south and east thereof to and including
 Terrell, Crockett, Sutton, Kimble,
 Gillespie, Blanco, Comal, Guadalupe,
 Gonzales, De Witt, Lavaca, Colorado,
 Wharton, and Matagorda Counties, Texas.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; and South
 Carolina.
All other Texas counties and all other      March 15.............................  November 30.
 states.
----------------------------------------------------------------------------------------------------------------

Sec. 407.16  Group risk plan for soybean.

    The provisions of the Group Risk Plan for Soybeans for the 2000 and 
succeeding crop years are as follows:

1. Definitions

    Harvest. Combining or threshing the soybeans.
    NASS yield. The yield calculated by dividing the NASS estimate 
of soybean production in the county, by the NASS estimate of the 
acres of soybeans in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether the 
harvested or planted acreage is used to calculate the yield used to 
establish the expected county yield and calculate indemnities.
    Planted acreage. Land in which the soybean seed has been placed 
by a machine appropriate for the insured crop and planting method, 
at the correct depth, into a seedbed that has been properly prepared 
for the planting method and production practice. Land on which seed 
is initially spread onto the soil surface by any method and which 
subsequently is mechanically incorporated into the soil in a timely 
manner and at the proper depth, will also be considered planted.

2. Crop Insured

    The insured crop will be all soybeans:
    (a) Grown on insurable acreage in the county or counties listed 
in the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as soybeans; and
    (d) Not planted into an established grass or legume or 
interplanted with another crop.

3. Payment

    (a) A payment will be made only if the payment yield for the 
insured crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 16 
following the crop year.
    (c) We will issue any payment to you prior to the May 16 
immediately following our determination of the payment yield.
    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice 
and type specified on the actuarial documents.
    (e) The payment will not be recalculated even though the NASS 
yield may be subsequently revised.

4. Program Dates

----------------------------------------------------------------------------------------------------------------
             State and county                 Cancellation and termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
Jackson, Victoria, Goliad, Bee, Live Oak,   February 15..........................  November 30.
 McMullen, La Salle, and Dimmit Counties,
 Texas and all Texas counties lying south
 thereof.
Alabama; Arizona; Arkansas; California;     February 28..........................  November 30.
 Florida; Georgia; Louisiana; Mississippi;
 Nevada; North Carolina; South Carolina;
 and El Paso, Hudspeth, Culberson, Reeves,
 Loving, Winkler, Ector, Upton, Reagan,
 Sterling, Coke, Tom Green, Concho,
 McCulloch, San Saba, Mills, Hamilton,
 Bosque, Johnson, Tarrant, Wise, and Cooke
 Counties, Texas, and all Texas counties
 lying south and east thereof to and
 including Maverick, Zavala, Frio,
 Atascosa, Karnes, De Witt, Lavaca,
 Colorado, Wharton, and Matagorda
 Counties, Texas.
All other Texas counties and all other      March 15.............................  November.
 States.
----------------------------------------------------------------------------------------------------------------

November 30.


Sec. 407.17  Group risk plan for wheat.

    The provisions of the Group Risk Plan for Wheat for the 2000 and 
succeeding crop years are as follows:

1. Definitions

    Harvest. Combining or threshing the wheat for grain.
    NASS yield. The yield calculated by dividing the NASS estimate 
of the wheat production in the county, by the NASS estimate of the 
acres of wheat in the county, as specified in the actuarial 
documents. The actuarial documents will specify whether the 
harvested or planted acreage is used to calculate the yield used to 
establish the expected county yield and calculate indemnities.
    Planted acreage. Land in which the wheat seed has been planted 
by a machine appropriate for the insured crop and planting method, 
at the correct depth, into a seedbed that has been properly prepared 
for the planting method and production practice. Land on which seed 
is initially spread onto the soil surface by any method and which 
subsequently is mechanically incorporated into the soil in a timely 
manner and at the proper depth, will also be considered planted.

2. Crop Insured

    The insured crop will be all wheat:
    (a) Grown on insurable acreage in the county or counties listed 
in the accepted application;
    (b) Properly planted and reported by the acreage reporting date;
    (c) Planted with the intent to be harvested as grain; and
    (d) Not planted into an established grass or legume, 
interplanted with another crop, or planted as a nurse crop, unless 
seeded at the normal rate and intended for harvest as grain.

3. Payment

    (a) A payment will be made only if the payment yield for the 
insured crop year is less than your trigger yield.
    (b) Payment yields will be determined prior to April 1 following 
the crop year.
    (c) We will issue any payment to you prior to the May 1 
immediately following our determination of the payment yield.

[[Page 30229]]

    (d) The payment is equal to the payment calculation factor 
multiplied by your policy protection for each insured crop practice 
and type specified in the actuarial documents.
    (e) The payment will not be recalculated even though the NASS 
yield may be subsequently revised.

----------------------------------------------------------------------------------------------------------------
             State and county                Cancellation and  termination dates        Contract change date
----------------------------------------------------------------------------------------------------------------
All Colorado counties except Alamosa,       September 30.........................  June 30.
 Conejos, Costilla, Rio Grande, and
 Saguache; all Montana counties except
 Daniels and Sheridan Counties; all South
 Dakota counties except Corson, Walworth,
 Edmonds, Faulk, Spink, Beadle, Kingsbury,
 Miner, McCook, Turner, and Yankton
 Counties and all South Dakota counties
 east thereof; all Wyoming counties except
 Big Horn, Fremont, Hot Springs, Park, and
 Washakie Counties; and all other states
 except Alaska, Arizona, California,
 Maine, Minnesota, Nevada, New Hampshire,
 North Dakota, Utah, and Vermont..
Arizona; California; Nevada; and Utah.....  October 31...........................  June 30.
Alaska; Alamosa, Conejos, Costilla, Rio     March 15.............................  November 30.
 Grande, and Saguache Counties, Colorado;
 Maine; Minnesota; Daniels and Sheridan
 Counties, Montana; New Hampshire; North
 Dakota; Corson, Walworth, Edmunds, Faulk,
 Spink, Beadle, Kingsbury, Miner, McCook,
 Turner, and Yankton Counties South
 Dakota, and all South Dakota counties
 east thereof; Vermont; and Big Horn,
 Fremont, Hot Springs, Park, and Washakie
 Counties, Wyoming..
----------------------------------------------------------------------------------------------------------------


    Signed in Washington, DC, on May 26, 1999.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 99-13983 Filed 6-4-99; 8:45 am]
BILLING CODE 3410-08-P