[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Rules and Regulations]
[Pages 61134-61140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27894]
[[Page 61134]]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 457
[Docket No. FCIC-17-0003]
RIN 0563-AC59
Common Crop Insurance Regulations; Cultivated Clam Crop Insurance
Provisions
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule with request for comments.
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SUMMARY: The Federal Crop Insurance Corporation (FCIC) amends the
Common Crop Insurance Regulations to provide Cultivated Clam insurance.
The provisions will be used in conjunction with the Common Crop
Insurance Policy Basic Provisions (Basic Provisions), which contain
standard terms and conditions common to most crop programs. The
intended effect of this action is to convert the Cultivated Clam pilot
crop insurance program to a regulatory insurance program for the 2019
and succeeding crop years.
DATES: Effective date: This final rule is effective December 27, 2017.
Applicability date: The changes are applicable for the 2019 and
succeeding crop years.
Comment due date: FCIC will accept written comments on this final
rule until close of business January 26, 2018. FCIC may consider the
comments received and may conduct additional rulemaking based on the
comments.
ADDRESSES: FCIC prefers that comments be submitted electronically
through the Federal eRulemaking Portal. You may submit comments,
identified by Docket
ID No. FCIC-17-0003, by any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Director, Actuarial and Product Design Division,
Risk Management Agency, United States Department of Agriculture, P.O.
Box 419205, Kansas City, MO 64141-6205.
FCIC will post all comments received, including those received by
mail, without change to http://www.regulations.gov, including any
personal information provided. Once these comments are posted to this
website, the public can access all comments at its convenience from
this website. All comments must include the agency name and docket
number or Regulatory Information Number (RIN) for this rule. For
detailed instructions on submitting comments and additional
information, see http://www.regulations.gov. If interested persons are
submitting comments electronically through the Federal eRulemaking
Portal and want to attach a document, FCIC requests that the document
attachment be in a text-based format. If interested persons want to
attach a document that is a scanned Adobe PDF file, it must be scanned
as text and not as an image, thus allowing FCIC to search and copy
certain portions of the submissions. For questions regarding attaching
a document that is a scanned Adobe PDF file, please contact the Risk
Management Agency (RMA) Web Content Team at (816) 823-4694 or by email
at [email protected].
Privacy Act: Anyone is able to search the electronic form of all
comments received for any dockets by the name of the individual
submitting the comment (or signing the comment, if submitted on behalf
of an association, business, labor union, etc.). You may review the
complete User Notice and Privacy Notice for Regulations.gov at http://www.regulations.gov/#!privacyNotice.
FOR FURTHER INFORMATION CONTACT: Ron Lundine, Director, Product
Management, Actuarial and Product Design Division, Risk Management
Agency, United States Department of Agriculture, Beacon Facility, Stop
0812, Room 421, P.O. Box 419205, Kansas City, MO 64141-6205, telephone
(816) 926-3854.
SUPPLEMENTARY INFORMATION:
Background
FCIC offered a pilot crop insurance program for cultivated clams
beginning with the 1999 crop year. The program is offered in nine
counties in Massachusetts, South Carolina, and Virginia. After a
program evaluation, in 2014 the FCIC's Board of Directors authorized
the Cultivated Clam Pilot Crop Insurance Program to be converted from a
pilot to a permanent program in Massachusetts, South Carolina, and
Virginia. For the 2016 crop year, 42 policies were sold and 352,563,049
clams were insured in Massachusetts, South Carolina, and Virginia. This
rule will add the Cultivated Clam Program to the Code of Federal
Regulations.
The FCIC is issuing this final rule without opportunity for prior
notice and comment. The Administrative Procedure Act (APA) exempts
rules ``relating to agency management or personnel or to public
property, loans, grants, benefits, or contracts'' from the statutory
requirement for prior notice and opportunity for public comment (5
U.S.C. 553(a)(2)). A Federal crop insurance policy is a contract and is
thus exempt from APA notice-and-comment procedures. Previously, changes
made to the Federal crop insurance policies codified in the Code of
Federal Regulations were required to be implemented through the notice-
and-comment rulemaking process. Such action was not required by the
APA, which exempts contracts. Rather, the requirement originated with a
notice USDA published in the Federal Register on July 24, 1971 (36 FR
13804), stating that the Department of Agriculture would, to the
maximum extent practicable, use the notice-and-comment rulemaking
process when making program changes, including those involving
contracts. FCIC complied with this notice over the subsequent years. On
October 28, 2013, USDA published a notice in the Federal Register (78
FR 64194) rescinding the prior notice, thereby making contracts again
exempt from the notice-and-comment rulemaking process. This exemption
applies to the 30-day notice prior to implementation of a rule.
Therefore, the policy changes made by this final rule are effective
upon publication in the Federal Register.
However, FCIC is providing a 30-day comment period and invites
interested persons to participate in this rulemaking by submitting
written comments. FCIC may consider the comments received and may
conduct additional rulemaking based on the comments.
Executive Orders 12866, 13563, 13771 and 13777
Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review,''
direct agencies to assess all costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity). Executive Order 13563 emphasized the importance
of quantifying both costs and benefits, of reducing costs, of
harmonizing rules, and of promoting flexibility. Executive Order 13777,
``Enforcing the Regulatory Reform Agenda,'' established a federal
policy to alleviate unnecessary regulatory burdens on the American
people. The Office of Management and Budget (OMB) designated this rule
as not significant under Executive Order 12866, ``Regulatory Planning
and Review,'' and therefore, OMB has not reviewed this rule. The rule
is not subject to Executive Order 13771,
[[Page 61135]]
``Reducing Regulation and Controlling Regulatory Costs.''
Paperwork Reduction Act of 1995
Pursuant to the provisions of the Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35, subchapter I), the collections of information in
this rule have been approved by OMB under control number 0563-0053.
E-Government Act Compliance
FCIC is committed to complying with the E-Government Act of 2002,
to promote the use of the internet and other information technologies
to provide increased opportunities for citizen access to Government
information and services, and for other purposes.
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 the UMRA) for 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 13132
It has been determined under section 1(a) of Executive Order 13132,
Federalism, that this rule does not have sufficient implications to
warrant consultation with the States. The provisions contained in this
rule will not have a substantial direct effect on States, or on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government.
Executive Order 13175
This rule has been reviewed in accordance with the requirements of
Executive Order 13175, ``Consultation and Coordination with Indian
Tribal Governments.'' Executive Order 13175 requires Federal agencies
to consult and coordinate with tribes on a government-to-government
basis on policies that have tribal implications, including regulations,
legislative comments or proposed legislation, and other policy
statements or actions that have substantial direct effects on one or
more Indian tribes, on the relationship between the Federal Government
and Indian tribes or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.
The Federal Crop Insurance Corporation has assessed the impact of
this rule on Indian tribes and determined that this rule does not, to
our knowledge, have tribal implications that require tribal
consultation under E.O. 13175. If a Tribe requests consultation, the
Federal Crop Insurance Corporation will work with the Office of Tribal
Relations to ensure meaningful consultation is provided where changes,
additions and modifications identified herein are not expressly
mandated by Congress.
Regulatory Flexibility Act
FCIC certifies that this regulation will not have a significant
economic impact on a substantial number of small entities. Program
requirements for the Federal crop insurance program are the same for
all producers regardless of the size of their farming operation. For
instance, all producers are required to submit an application and
acreage report to establish their insurance guarantees and compute
premium amounts, and all producers are required to submit a notice of
loss and production information to determine the indemnity amount for
an insured cause of crop loss. Whether a producer has 10 acres or 1000
acres, there is no difference in the kind of information collected. To
ensure crop insurance is available to small entities, the Federal Crop
Insurance Act (FCIA) authorizes FCIC to waive collection of
administrative fees from limited resource farmers. FCIC believes this
waiver helps to ensure that small entities are given the same
opportunities as large entities to manage their risks through the use
of crop insurance. A Regulatory Flexibility Analysis has not been
prepared since this regulation does not have a significant impact on a
substantial number of small entities, and, therefore, this regulation
is exempt from the provisions of the Regulatory Flexibility Act (5
U.S.C. 605).
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 2 CFR part 415, subpart C.
Executive Order 12988
This rule has 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. With respect to any direct action taken by FCIC
or action by FCIC directing the insurance provider to take specific
action under the terms of the crop insurance policy, the administrative
appeal provisions published at 7 CFR part 11 must be exhausted before
any action against FCIC for judicial review may be brought.
Environmental Evaluation
This action is not expected to have a significant impact on the
quality of the human environment, health, or safety. Therefore, neither
an Environmental Assessment nor an Environmental Impact Statement is
needed.
List of Subjects in 7 CFR Part 457
Crop insurance, Cultivated clam, Reporting and recordkeeping
requirements.
Final Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation amends 7 CFR part 457, applicable for the 2019
and succeeding crop years, as follows:
PART 457--COMMON CROP INSURANCE REGULATIONS
0
1. The authority citation for 7 CFR part 457 continues to read as
follows:
Authority: 7 U.S.C. 1506(l), 1506(o).
0
2. Section 457.176 is added to read as follows:
Sec. 457.176 Cultivated clam crop insurance provisions.
The cultivated clam crop provisions for the 2019 and succeeding
crop years are as follows:
FCIC policies:
United States Department of Agriculture
Federal Crop Insurance Corporation
Cultivated Clam Crop Provisions
1. Definitions.
Amount of insurance. For each basic unit, your inventory value
multiplied by the coverage level percentage you elect, and multiplied
by your share. However, for catastrophic risk protection policies,
amount of insurance is your inventory value multiplied by the coverage
level percentage you elect (for CAT coverage the level is limited to 50
percent), multiplied by your share, and multiplied by 55 percent. Your
accumulated paid indemnities during the crop year for each basic or
optional
[[Page 61136]]
unit may not exceed your amount of insurance.
Basic unit value before loss. The stage value of all undamaged
insurable clams, in the basic unit or, if elected, all optional units
combined, immediately prior to the occurrence of any loss as determined
by our appraisal. This allows the amount of insurance under the policy
to be prorated among the individual units based on the actual value of
the clams in the unit at the time of loss. It is also the basis for
determining whether or not an indemnity is due. This value is used to
ensure that you have not under-reported your clam inventory value.
Clam. A cultivated Mercenaria mercenaria (quahog).
Crop year. The twelve-month period beginning December 1 and
extending through November 30 of the next calendar year, designated by
the calendar year in which insurance ends.
Crop year deductible. The deductible percentage multiplied by the
sum of the inventory values within each basic unit. The crop year
deductible will be increased for any increases in the inventory value
on the inventory value report. The crop year deductible will be reduced
by any previously incurred deductible if you timely report each loss to
us.
Deductible percentage. An amount equal to 100 percent minus the
percent of coverage you select. The percentage is 50 percent for
catastrophic risk protection coverage.
Disease. Any pathogen or group of pathogens, parasitic infestation
or plague verified by an aquaculture pathologist and shown to be a
primary cause to the death of the insured clams.
Freeze. The formation of ice in the cells of the animal caused by
low air temperatures.
Global Positioning System (GPS). A space based radio position,
navigation, and time transfer system involving satellites and computers
to determine the latitude and longitude of a receiver on Earth by
computing the time difference for signals from different satellites to
reach the receiver and referenced in the Special Provisions.
Growing location. A lease parcel, permit or licensed area, whose
boundaries are readily discernable above the water, and identified on a
map that shows enough detail to distinguish seeded areas within the
site.
Growout bag. A mesh bag used throughout the growing season to
contain clams when placed in the appropriate growing medium and as
further defined by the Special Provisions.
Harvest. Removal of marketable clams from the unit. Clams that are
removed from the growing location but not of sufficient size to be
marketable are not considered harvested if returned to the growing
location.
Ice floe. Floating ice formed in sheets on the sea surface.
Inventory value. The total of the stage values from the inventory
value report.
Inventory value report. Your report that declares the stage values
of insurable clams in accordance with section 6. See the Cultivated
Clam Insurance Standards Handbook, Exhibit 5 for the inventory value
report completion instructions and form.
Land. The land under a body of water suitable for planting clams
and the column of water above the land if designated and controlled by
state law.
Lease. A contract that grants use of land in or assigned to a
county for a specified term and for a specified payment and provides
the lessee with the exclusive use of the land to plant clams.
Lease parcel. A legally identifiable tract or plot of land covered
by a lease, permit, or license.
License. Official or legal permission that grants use of land in or
assigned to a county for a specified term and provides the licensee
with the exclusive use of the land to plant clams.
Non-contiguous. In lieu of the definition in the Basic Provisions,
separately-named, high-density aquaculture lease sites or shellfish
sites are considered non-contiguous, unless limited by the Special
Provisions. Individual land parcels within such sites are not
considered non-contiguous.
Occurrence deductible.
(a) This deductible allows a smaller deductible than the crop year
deductible to be used when:
(1) Inventory values are less than the reported basic unit value;
or
(2) You have elected optional units, if applicable.
(b) The occurrence deductible is the lesser of:
(1) The deductible percentage multiplied by the unit value before
loss multiplied by the under-report factor; or
(2) The crop year deductible.
Permit. A document giving official or legal permission to use land
in or assigned to a county for a specified term and provides the
permittee with the exclusive use of the land to plant clams.
Planting. The placing of seed clams into the appropriate growing
medium for the practice specified.
Pollution. The presence in the water of a substance that directly
causes death of the clams. The substance shall not be parasitical,
bacterial, fungal or viral, or any substance used by you for medicinal
purposes. Pollution will also include any increase or decrease in the
content of any normal soluble or insoluble constituent of water
including mud and silt, feed residues, solid or liquid fish wastes,
dissolved gases and any other substance normally present in the water
of the lease parcel.
Practical to replant. In lieu of the definition of ``Practical to
replant'' contained in section 1 of the Basic Provisions, unless
limited by the Special Provisions, practical to replant is defined as
our determination, after loss or damage to the insured crop, based on
factors including, but not limited to the causes of loss listed in
section 10 of these provisions, that replanting the insured crop will
allow the crop to develop normally during the remainder of the crop
year. Unavailability of seed clams will not be considered a valid
reason for failure to replant.
Practice. The cultural methods of producing clams such as trays,
mesh bags, round pens, lantern nets or bottom planting.
Replant. Unless limited by the Special Provisions, performing the
cultural practices necessary to prepare for replacement of insurable
clams that were destroyed by an insurable cause of loss and then
placing living insurable clams into mesh bags or pens, or seeding them
into prepared growout beds, bottom culture, bottom trays, or floating
trays on insurable acreage.
Salinity. The dissolved solids (typically salts such as chloride,
sodium, and potassium) in ocean water expressed as parts per thousand.
Seed clam.
(a) For clams placed in a field nursery or a nursery bag--a clam
that is a minimum of 5 millimeters, measured at the longest shell
distance that is parallel to the hinge.
(b) For all others--a clam which is a minimum of 10 millimeters,
measured at the longest shell distance that is parallel to the hinge.
Separately named high-density aquaculture lease site. The submerged
subdivided land under a body of water suitable for the cultivation of
clams and identified and named separately by the Division of Marine
Resources or similar regulatory agency.
Shellfish harvest ban. A State or Federal order that prohibits
harvesting clams for human food in areas where monitoring program data
indicates that fecal material, pathogenic microorganisms, poisonous or
deleterious substances, marine toxins, or radio nuclides have reached
excessive concentrations.
[[Page 61137]]
Stage. Clams that have attained the size or age specified for stage
1, 2, 3, or 4 as defined in the Special Provisions.
Stage value. The dollar value of the inventory of all insurable
clams at each stage based on the survival factors and the prices shown
in the actuarial documents for such stages, in each unit on your
inventory value report, including any revision that increases the value
of your insurable inventory.
Storm surge. A significant increase or decrease in water depth
relative to normal tides that is caused by a strong, continuous and
prolonged strong flow of onshore or offshore winds.
Survival factor. A factor shown on the actuarial documents that
represents the expected percentage of clams that will normally survive.
If you provide production records for three consecutive years, your
records will be used in lieu of the factor contained in the actuarial
document to determine the survival factor. The survival factor is
applied at the time of inventory and is not applied a second time to
the same inventory when a loss occurs. Clams that are seeded subsequent
to the annual inventory value report must be adjusted by the survival
factor.
Tidal wave. A large water wave, wave train, or a series of waves,
generated in a body of water by an impulsive disturbance that
vertically displaces the water column or a destructive type of wave
motion in seas and oceans, associated with either strong winds or
underwater earthquakes.
Under-report factor. The factor that adjusts your indemnity for
under-reporting of inventory values. The factor is always used in
determining any indemnities. The under-report factor is the lesser of:
(a) 1.000; or (b) the sum of all stage values reported on all the
inventory value reports, minus the total of all previous losses, as
adjusted by any previous under-reporting factors, divided by the basic
unit value before loss.
Unit value after loss. The value of the remaining insurable clams
in each basic or optional unit based on the percentage of the reference
maximum dollar amount contained in the actuarial documents, immediately
following the occurrence of a loss as determined by our appraisal, plus
any reduction in value due to uninsured causes. This is used to
determine the loss of value for each individual unit so that losses can
be paid on an individual unit basis, optional or basic, as applicable.
Unit value before loss. The stage value of undamaged insurable
clams in the basic or optional unit, as applicable, immediately prior
to the loss occurrence. The determined value will include the number of
seeded and harvested clams and stages that existed on the date of the
inventory value report, adjusted for changes in accordance with
subparagraph 22A(2) of the Insurance Standards Handbook, including but
not limited to; the reference maximum dollar amount contained in the
actuarial documents; and the applicable survival factors. This allows
the amount of insurance under the policy to be divided among the
individual units in accordance with the value of the clams in the unit
at the time of loss for determining whether you are entitled to an
indemnity for insured losses in the unit, optional or basic, as
applicable. Clams that are seeded subsequent to the annual inventory
value report being submitted must be adjusted by the survival factor
before they are added to the beginning inventory during the process of
establishing the ``Unit value before loss.''
2. Unit Division
(a) In addition to the definition of basic unit contained in
section 1 of the Basic
Provisions, a basic unit may be divided into optional units in
accordance with section 2(b). Note that even if you elect optional unit
coverage, amount of insurance, crop year deductible, under-report
factor, premium, and the total amount of indemnity payable under this
policy will be controlled by the basic unit value before loss.
(b) If you elect the additional level of coverage, for an
additional premium, inventory that would otherwise be a basic unit may,
unless limited by the Special Provisions, be divided into optional
units by non-contiguous lease parcels. Additional optional units may
also be authorized in the Special Provisions. If you elect optional
units, you must provide separate inventory reports for each unit and
keep all records of seeding, harvest, and uninsured losses separately
by unit.
(c) Failure to keep or report separate records will result in all
optional unit inventories under a basic unit being combined in a basic
unit at loss time.
(d) If you elect optional units, your amount of insurance will be
divided among optional units in relation to unit value before loss of
clams in each optional unit. If, at the time of loss, the aggregate
value of the clams in your optional units exceeds your basic unit
inventory value, you will be subject to the under-report factor
provisions.
3. Amount of Insurance
(a) In addition to the requirements of section 3 of the Basic
Provisions, you may only select one coverage level percentage for all
clams, regardless of their stage, insured under this policy.
(b) Your amount of insurance will be reduced by the amount of any
indemnity paid under this policy.
(c) For an additional premium, you may increase your amount of
insurance in accordance with section 6(d).
(d) The production reporting requirements contained in section 3 of
the Basic Provisions are not applicable.
(e) For seeded clams, the amount of insurance is the product of the
reference maximum dollar amount of insurance and the fraction of the
maximum value associated with the applicable stage multiplied by the
coverage level selected multiplied by your share.
4. Contract Changes
In accordance with section 4 of the Basic Provisions, the contract
change date is August 31 of each year, or as specified in the actuarial
documents.
5. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions, the
cancellation and termination dates are November 30, or as specified in
the actuarial documents.
6. Clam Inventory Value Report
In lieu of section 6 of the Basic Provisions:
(a) For insurance to attach for the crop year, you must submit an
inventory value report to us with your application and for each
subsequent crop year, not later than November 30 preceding the crop
year, or by the date specified in the Special Provisions.
(b) The inventory value report must be submitted yearly and
include, for each basic or optional unit all growing locations, the
stages of the clams and the stage values, and your share by growing
location.
(1) The inventory value must also reflect the stages as shown in
the Special Provisions.
(2) At our option and at any time, you may be required to provide
documentation in support of any of your reports, including, but not
limited to, a detailed listing of growing locations, unit values, the
numbers and the sizes of clams seeded or placed for grow-out; your
share, sales of clams and purchases of seed clams for the 3 previous
crop years, and of your ability to properly obtain and maintain clams.
(3) For catastrophic level policies only, you must report your clam
sales for the previous crop year on the clam inventory value report.
You may be
[[Page 61138]]
required to provide documentation to support such sales.
(c) Your inventory value report, including any revised report, will
be used to determine your premium and amount of insurance.
(d) If allowed for in the Special Provisions you may revise your
inventory value report to increase the reported inventory value. We may
inspect the inventory. Your revised inventory value report, if allowed
by the Special Provisions, will be considered accepted by us and
coverage will begin on any proposed increase in inventory value at the
later of December 1, the date shown in the Special Provisions, or 30
days after your written request is received by us, unless we reject the
proposed increase in your inventory value in writing. We will reject
any requested increase if a loss occurs before the later of December 1,
the date shown in the Special Provisions, or within 30 days of the date
the request is made.
(e) Failure to report the full value of your stage value will
result in the reduction of any claim in accordance with section 14(d).
(f) For catastrophic insurance coverage only: Your inventory value
report for all clams cannot exceed the lesser of the value from section
6(b) or the percent shown on the actuarial documents of your previous
year's sales of clams unless you provide acceptable records to prove
your actual inventory value.
(g) Your inventory value report must reflect your insurable clam
inventory according to the prices contained in the actuarial documents.
In no instance will we be liable for values greater than those
contained in the actuarial documents.
(h) You must report all clams on the unit including any clams owned
or subleased by other individuals or entities.
(i) No application or inventory value reports, except revisions,
will be accepted after November 30, unless otherwise provided in the
Special Provisions.
7. Premium
(a) In lieu of section 7(c) of the Basic Provisions, we will
determine your premium by multiplying the amount of insurance by the
appropriate premium rate and by the premium adjustment factors listed
on the actuarial documents.
(b) Additional premium from an increase in the inventory value
report is due and payable when we accept the revised inventory value
report.
(c) In addition to the provisions in section 7 of the Basic
Provisions, the premium will be adjusted for partial crop years for the
year of seeding and for clam leases you acquire. Premium will be
charged for the entire month, as shown in the actuarial documents, for
any month during which any amount of coverage is provided.
8. Insured Crop
In lieu of the provisions of section 8 and section 9 of the Basic
Provisions, the insured crop is all the clams in the county that:
(a) Meet all the requirements for insurability and for which prices
are provided in the actuarial documents;
(b) Are acceptable to us;
(c) Are grown by a person, who in at least three of the five
previous crop years:
(1) Grew clams for commercial sale; and
(2) Participated in the management of a clam farming operation by
at least exercising decision-making authority over all operational
aspects of the farm.
(d) Are grown in a county for which a premium rate is provided in
the actuarial documents;
(e) Are in a growing location acceptable to us and for which you
provided GPS coordinates with your clam inventory value report in
accordance with the Special Provisions; and
(f) Use a practice that fixes the insurable clams to the land
within the growing location.
9. Insurance Period
(a) In accordance with section 11 of the Basic Provisions, coverage
begins the later of:
(1) The date the pre-acceptance inspection, if applicable, is
complete unless we notify you that your inventory is not insurable; or
(2) If your inventory is insurable:
(i) On December 1 for new applications, when the application and
the inventory value report are submitted by October 30;
(ii) On the 31st day following the date of submission for new
applications, when the application and the inventory value report are
submitted between November 1 and 30;
(iii) On December 1 for policies continued from the prior year if
the inventory value report is submitted by October 30;
(iv) On the 31st day following the date of submission of the
inventory value report for policies continued from the prior year when
the inventory value report is submitted between November 1 and 30; and
(v) However, you acquire a financial interest in any insurable
clams after coverage begins, but after December 1 of the crop year, and
our inspection determines that the clams are acceptable, insurance will
be considered to have attached to such clams 30 days after a revised
inventory report is accepted by us indicating the stage value of the
acquired clams; or
(vi) On the date contained in the Special Provisions.
(b) Insurance ends at the earliest of:
(1) The date of final adjustment of a loss when the total
indemnities due equal the amount of insurance;
(2) November 30; or
(3) A date specified in the Special Provisions. (c) Insurance
ceases immediately on any clams removed from the unit.
10. Causes of Loss
(a) In accordance with the provisions of section 12 of the Basic
Provisions, insurance is provided for the death of clams caused only by
the following causes of loss that occur within the insurance period
unless otherwise limited by the Special Provisions:
(1) Oxygen depletion due to vegetation, microbial activity, harmful
algae bloom, or high water temperature unless otherwise limited by the
Special Provisions;
(2) Disease, if medication does not exist for control of the
disease;
(3) Freeze;
(4) Hurricane;
(5) Decrease in salinity associated with a weather event verified
by National Oceanic & Atmospheric Administration (NOAA) or United
States Geologic Survey (USGS) or as otherwise defined in the Special
Provisions;
(6) Tidal wave;
(7) Storm surge that is associated with a local weather event and
verified by NOAA or USGS; or
(8) Ice floe.
(b) In addition to the causes of loss excluded in section 12 of the
Basic Provisions, we do not insure against any loss caused by:
(1) Your inability to market clams as a direct result of
quarantine, shellfish harvest ban, boycott, or refusal of a buyer to
accept production;
(2) Collapse or failure of buildings or structures;
(3) Loss of market value;
(4) Vandalism;
(5) Theft;
(6) Pollution;
(7) Predation (unless allowed by the Special Provisions);
(8) Dredging;
(9) Any cause of loss that occurred prior to or after the insurance
period;
(10) Any unexplained shortages or disappearance of inventory; or
[[Page 61139]]
(11) Failure of the clam to grow to a marketable size.
11. Replanting Payments
Unless otherwise stated in the Special Provisions:
(a) In accordance with the provisions contained in section 13 of
the Basic Provisions, a replanting payment is allowed for insurable
clams if death of the clams was due to an insurable cause of loss.
(b) The maximum amount of the replanting payment will be the lesser
of your actual cost of replanting or the result obtained by multiplying
the replanting payment amount contained in the Special Provisions by
your insured share.
(c) Notwithstanding the provisions of section 13 of the Basic
Provisions, only one replanting payment will be made per lease parcel
planted within the crop year.
(d) You may not collect a replant payment and an indemnity for the
same loss.
12. Duties in the Event of Damage or Loss
In addition to your duties contained in section 14 of the Basic
Provisions,
(a) You must obtain our written consent prior to changing or
discontinuing your normal practices with respect to care and
maintenance of the insured clams. Failure to obtain our written consent
will result in the denial of your claim.
(b) If you are claiming disease as the cause of loss, you must
prove at your own expense that the death of the clams was due to
disease by isolating a sample of the clams and identifying the disease
following histological or pathological examination conducted by a
veterinarian who is a certified fish pathologist or a person approved
by us.
13. Access to Insured Crop and Records, and Records Retention
In addition to the requirements of section 21 of the Basic
Provisions, you must permit us to inspect the insurable clams at any
time and take samples of damaged and undamaged clams for inspection,
testing, and analysis, and examine and make copies of your records.
14. Settlement of Claim
We will determine indemnities for any unit as follows:
(a) Determine the under-report factor for the basic unit;
(b) Determine the occurrence deductible;
(c) Subtract unit value after loss from unit value before loss;
(d) Multiply the result of 14(c) by the under-report factor;
(e) Subtract the occurrence deductible from the result in section
14(d); and
(f) If the result of section 14(e) is greater than zero, and
subject to the limit of section 14(g);
(1) For other than catastrophic risk protection coverage, your
indemnity equals the result of section 14(e), multiplied by your share.
(2) For catastrophic risk protection coverage, your indemnity
equals the result of section 14(e) multiplied by 55 percent, multiplied
by your share.
(g) The total of all indemnities for the crop year will not exceed
the amount of insurance.
15. Written Agreements
The written agreement provisions in the Basic Provisions do not
apply.
16. Late Planting
Provisions of section 16 of the Basic Provisions do not apply.
17. Prevented Planting
Provisions of section 17 of the Basic Provisions do not apply.
18. Loss Examples
Single Unit Loss Example
Assume you have a 100 percent share, the inventory value reported
by you is $100,000, and your coverage level is 75 percent. Your amount
of insurance is $75,000 ($100,000 x .75). At the time of loss, unit
value before loss is $95,000, unit value after loss is $30,000 and
basic unit value before loss is $100,000. The deductible percentage is
25 percent (100-75), the crop year deductible is $25,000 (.25 x
$100,000). Your indemnity would be calculated as follows:
Step (1) Determine the under-report factor; $100,000 / $95,000 =
1.000;
Step (2) Determine the occurrence deductible; .25 x $95,000 x 1.000
= $23,750;
Step (3) Calculate the difference between unit value before loss
and unit value after loss; $95,000-$30,000 = $65,000;
Step (4) Result of step 3 multiplied by the underreport factor
(step 1); $65,000 x 1.000 = $65,000;
Step (5) Result of step 4 minus the occurrence deductible; $65,000-
$23,750 = $41,250;
Step (6) Result of step 5 multiplied by your share; $41,250 x 1.000
= $41,250 indemnity payment.
Multiple Unit Multiple Loss Example
Assume you have a 100 percent share, the inventory value reported
by you is $100,000, and your coverage level is 75 percent. You have two
optional units, unit 1 and unit 2. Your amount of insurance is $75,000
($100,000 x .75). You have a loss on unit 1 and no loss on unit 2. At
the time of loss, unit value before loss on unit 1 is $60,000, unit
value after loss on unit 1 is $18,000 and basic unit value before loss
is $125,000. The deductible percentage is 25 percent (100-75), the crop
year deductible is $25,000 (.25 x $100,000). Your indemnity would be
calculated as follows:
Step (1) Determine the under-report factor; $100,000 / $125,000 =
.80;
Step (2) Determine the occurrence deductible; .25 x $60,000 x .80 =
$12,000;
Step (3) Calculate the difference between unit value before loss
and unit value after loss; $60,000-$18,000 = $42,000;
Step (4) Result of step 3 multiplied by the underreport factor
(step 1); $42,000 x .80 = $33,600;
Step (5) Result of step 4 minus the occurrence deductible; $33,600-
$12,000 = $21,600;
Step (6) Result of step 5 multiplied by your share; $21,600 x 1.000
= $21,600 indemnity payment.
Your crop year deductible is reduced to $13,000 ($25,000-$12,000).
Your amount of insurance is reduced to $53,400 ($75,000-$21,600). You
do not restock unit 1 after the first loss. Values on unit 2 do not
change from those measured at the time of the loss on unit 1. Assume
you have a loss later in the crop year on unit 2. Unit value before
loss on unit 2 is $65,000, unit value after loss on unit 2 is $0.00 and
basic unit value before loss on the basic unit is $83,000. Your loss
would be determined as follows:
Step (1) Determine the remaining amount of insurance; $100,000-
$33,600 = $66,400;
Step (2) Determine the under-report factor; $66,400 / $83,000 =
.800;
Step (3) Determine the occurrence deductible; $25,000-$12,000 =
$13,000;
Step (4) Calculate the difference between unit value before loss
and unit value after loss; $65,000-$0.00 = $65,000;
Step (5) Result of step 4 multiplied by the underreport factor
(step 2); $65,000 x .800 = $52,000;
Step (6) Result of step 5 minus the occurrence deductible; $52,000-
$13,000 = $39,000;
Step (7) Result of step 6 multiplied by your share; $39,000 x 1.000
= $39,000 indemnity payment.
[[Page 61140]]
Signed in Washington, DC, on December 19, 2017.
Heather Manzano,
Acting Manager, Federal Crop Insurance Corporation.
[FR Doc. 2017-27894 Filed 12-26-17; 8:45 am]
BILLING CODE 3410-08-P