[Federal Register Volume 83, Number 247 (Thursday, December 27, 2018)]
[Rules and Regulations]
[Pages 66574-66583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27858]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 400
[Docket No. FCIC-14-0001]
RIN 0563-AC45
General Administrative Regulations; Interpretations of Statutory
Provisions, Policy Provisions, and Procedures
AGENCY: Federal Crop Insurance Corporation, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Federal Crop Insurance Corporation (FCIC) finalizes the
General and Administrative Regulation Subpart X- Interpretations of
Statutory and Regulatory Provisions (Subpart X) to incorporate
interpretations of procedures previously issued and administered in
accordance with Manager's Bulletin MGR-05-018, and to provide a
mechanism for interpretations of policy provisions that are not
codified in the Code of Federal Regulations. The effect of this action
is to provide requestors with information on how to request a final
agency determination or an interpretation of FCIC procedures within one
administrative regulation, and bring consistency and clarity to the
processes used and existing provisions.
DATES: This rule is effective January 28, 2019.
ADDRESSES: Anyone can to search the electronic form of all comments
received for any dockets by the name of the person 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: Francie Tolle, Director, Product
Management, Product Administration and Standards Division, Risk
Management Agency, United States Department of Agriculture, Beacon
Facility, Stop 0812, Room 421, PO Box 419205, Kansas City, MO 64141-
6205, telephone (816) 926- 7730.
SUPPLEMENTARY INFORMATION:
Background
This rule finalizes changes to Subpart X that were published by
FCIC on March 18, 2015, as a notice of proposed rulemaking in the
Federal Register at 80 FR 14030-14033. The public was afforded 30 days
to submit comments after the regulation was published in the Federal
Register.
A total of 18 comments were received from 5 commenters. The
commenters included persons or entities from the following categories:
Financial, insurance provider, legal, trade association, and other. The
public comments received regarding the proposed rule and FCIC's
responses to the comments are as follows:
Comment: A commenter stated Subpart X--Interpretations of statutory
provisions could provide asset management improvements. Driving these
types of assets would be a dynamic and unprecedented improvement in the
field of asset management.
Response: FCIC does not understand the comment and does not see a
connection between asset management and interpretations of policy and
procedures. Subpart X intended to ensure that the Federal crop
insurance program policy provisions and procedures are interpreted in a
consistent manner for all participants. No change has been made.
Comment: A commenter questioned the use of ``calendar year(s)'' in
Sec. 400.766(a)(1) when Sec. 400.766(a)(2) refers to ``crop years''.
For the calendar years 2011-2014 used in the example, these could
include policies for crop years from 2010-2016, depending on the time
of the calendar year the request was submitted. The commenter suggested
only referencing crop years in these two sections.
Response: FCIC agrees that the use of the term calendar year can be
confusing since all crop insurance, except for Whole-Farm Revenue
Protection, is conducted on a crop year basis. Further, although crop
years may differ, since the opinion is about a specific provision in a
policy and effects producers with that policy, crop years is more
appropriate. FCIC has revised the provisions accordingly.
Comment: A commenter stated in proposed rule Sec. 400.766(a)(2),
FCIC states that it will reject requests for interpretations of crop
year policy provisions that are older than four years prior to the
calendar year in which the request was submitted. The commenter did not
understand the purpose of this time limit. It is not unusual for
litigation or arbitration to drag on for quite some time due to
continuances, changes in attorneys, changes in arbitrators, etc. There
may be situations in which it does not become clear that an
interpretation of a policy provision or procedure is necessary until
the time limit set forth in this section has already passed,
particularly if the dispute involves a claim overpayment discovered in
a subsequent crop year. As a result, the commenter believed this time
limit should be stricken or revised to include any crop year(s) of
policies subject to current litigation or arbitration.
Response: As stated above, FCIC is moving to a crop year basis
instead of a calendar year basis. However, FCIC does not agree the time
limit should be stricken or revised to include any crop years of
policies subject to current litigation or arbitration. The policy
provisions require filing of a request for mediation, arbitration or
litigation within one year of the determination by the insurance
provider in the event of a dispute. The current time limit is set to
allow an additional two years to pass before an interpretation must be
requested to permit time for the appeals process to proceed. FCIC
believes that most proceedings initiated within one-year of a
determination that is in dispute would be readily able to request an
interpretation within the timeframes established by this regulation.
Further, the published interpretations state that to the extent the
language in the provisions interpreted is identical to the language
applicable for any other crop year, including previous crop years, the
same interpretation can be applied to such other crop year provided the
person seeking to use the published interpretation for a different crop
year provided that the language of the
[[Page 66575]]
provisions is identical. Therefore, to the extent that policy language
is the same, interpretations made for one year may apply to numerous
years. No change has been made.
Comment: A commenter recommended the wording in Sec. 400.766(a)(3)
be changed to ``. . . starting with the 2014 crop year, you must submit
. . .''
Response: FCIC agrees and has revised the provisions accordingly.
Comment: A commenter recommended the wording in Sec. 400.766(b)(2)
be changed to ``. . . matters of general applicability and are not. .
.''
Response: FCIC agrees with the revisions, however this provision
has been moved and can now be found in Sec. 400.766(b)(5).
Comment: A commenter stated, the proposed rule neither defines
``nullify'' or ``nullification'' nor explains the legal process by
which FCIC will nullify a mediation, arbitration, or judicial decision.
Is the term ``nullify'' synonymous with the term ``vacate'' as used in
the Federal Arbitration Act (``FAA'')? Which division within the RMA
Compliance Division will manage the nullification process? Will the
insurance provider or policyholder be afforded appeal rights if FCIC
nullifies an award? If a policyholder disputes the nullification of an
award, does a cause of action lie against the insurance provider or
FCIC? Because the proposed rule does not describe the process by which
FCIC will nullify an award, the commenter cannot adequately evaluate
the impact of the proposed rule or assess its risk in the event
nullification occurs.
Another commenter also questioned whether FCIC has the authority to
nullify an arbitration award as set forth in proposed section Sec.
400.766(b). On a prefatory note, FCIC is not a party to the Common Crop
Insurance Policy Basic Provisions (Basic Provisions), is not a party to
arbitration arising under the policy and, consequently, may not
intervene in an arbitration proceeding. Assuming arguendo that FCIC, as
a non-party, may vacate an arbitration award, its ability to do so is
subject to Federal Arbitration Association (FAA), which governs
arbitration proceedings, including judicial review, arising under
section 20 of the Basic Provisions. With respect to the vacation or
modification or arbitration awards, section 10 of the FAA provides, in
pertinent part:
(a) In any of the following cases the United States court in and
for the district where in the award was made may make an order vacating
the award upon the application of any party to the arbitration--
(1) where the award was procured by corruption, fraud, or undue
means:
(2) Where there was evident partiality or corruption in the
arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to
postpone the hearing, upon sufficient cause shown, or in refusing to
hear evidence pertinent and material to the controversy; or any other
misbehavior by which the rights of any party have been prejudiced; or
(4) where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon the subject
matter submitted was not made.
9 U.S.C. 10. The Supreme Court has held that the FAA's grounds for
vacating any award are exclusive. Section 10 does not empower FCIC to
nullify an arbitration award simply because the arbitrator did not
enforce or request a final agency determination.
The commenter also believed section 10(a)(4) of the FAA is the only
provision tangentially related to an arbitrator's enforcement of a
final agency determination, and case law demonstrates that FCIC cannot
rely on section 10(a)(4) to nullify an arbitration award. When a party
invokes section 10(a)(4) of the FAA as a basis for vacating an award on
the basis that the arbitrator exceeded his power, the court must:
``. . . determine if the form of the arbitrator's award can be
rationally derived either from the agreement between the parties or
from the parties' submissions to the arbitrators, and we do not revise
the terms of the award ``unless they are `completely irrational.' ''
The commenter stated this standard of reviews is so deferential,
that a Court may overturn an award only if there is ``absolutely no
support at all in the record justifying the arbitrator's
determinations.'' (A court may not overrule the arbitrator simply
because it disagrees. ``There must be absolutely no support at all in
the record.'') Thus, even if an arbitrator does not apply a final
agency determination to a particular dispute, case law suggests that
this alone does not merit vacating an award.
Response: The definition of ``null'' and ``nullification'' is not
provided for in the administrative regulation as it intends the common
meaning to apply. The term ``null'' is defined in Merriam- Webster's
Online Dictionary, as ``having no legal or binding force; invalid.''
This means that if an arbitration award was based upon an
interpretation of a policy provision or procedure that was not provided
by FCIC, the arbitration award would have no legal or binding force and
would be invalid.
While FCIC is not a party to the insurance contract, this is a
Federal crop insurance program, and FCIC is the regulator of the
program. It is FCIC's duty and obligation to ensure compliance with all
policy and procedure, especially since taxpayer dollars are used in
part to fund the program. Government funds can only be spent in the
manner authorized by law.
In the past, one problem in the program that was reoccurring was
inconsistent interpretations of policy and procedures by arbitrators
and courts, resulting in the inequitable application of the policy
provisions and procedures based on geography. As a result, Congress
enacted section 506(r) of the Federal Crop Insurance Act (Act), which
mandates that FCIC will provide an interpretation of all statutes and
regulations. This ensures that taxpayer dollars are spent in accordance
with the law.
With respect to the American Arbitration Act, there is a long-
standing legal principle of statutory construction that states that
later in time statutes preempt earlier enacted statutes. That is the
case here. Section 506(r) of the Act was enacted after the American
Arbitration Act and to the extent there is a conflict, section 506(r)
of the Act takes precedence. Therefore, while the American Arbitration
Act may apply to certain circumstances, it cannot be used to require
the payment of awards that would use taxpayer dollars that are not
authorized by law. Those provisions of the American Arbitration Act
that could be interpreted to require the payment of awards that are
otherwise not authorized by law are not applicable.
Congress has determined that FCIC interprets its statutes and
regulations, but it left to FCIC the manner in which it does so. In
carrying out that mandate, FCIC promulgated Subpart X to administer the
process of obtaining the requisite interpretations and, under
prevailing Supreme Court precedence, FCIC's administration of section
506(r) of the Act is to be given deference if it is reasonable and not
arbitrary, capricious, or not in accordance with the law. FCIC's
determination that there must be consequences for failure to obtain an
interpretation when required is reasonable. Further, since all parties
to the legal proceeding have the obligation to seek an interpretation
when there is a dispute regarding the meaning of a provision, the
consequences cannot unfairly affect one party over another.
Nullification of an
[[Page 66576]]
award has been the only process FCIC has determined that will not
unfairly affect one party over another. It simply resets the process
and the appeal proceeds using the interpretation obtained from FCIC.
Requiring nullification of an award when no final agency determination
or FCIC interpretation has been sought or it has been disregarded is
reasonable and not arbitrary and capricious or is in accordance with
the law.
Requiring FCIC to provide interpretations of statutes and
regulations ensures that all producers nationwide are treated the same.
FCIC determined the only way to effectuate this provision and ensure
that its interpretations are binding on all parties, including in the
appeals process, is to require that awards that failed to obtain an
interpretation or disregarded an interpretation will be nullified.
Therefore, if any party in a dispute believes an agreement or award was
rendered based on an interpretation of a statutory or regulatory
provision that is in dispute and an official interpretation from FCIC
was not sought or was disregarded, it is incumbent upon the aggrieved
party to request from FCIC whether an official interpretation was
sought or disregarded.
Comment: A commenter stated history suggests that FCIC does not
nullify arbitration awards if the parties do not request a final agency
determination or the arbitrator does not abide by the final agency
determination. Instead, RMA issues compliance findings directed at the
insurance provider and denies reinsurance on any amount awarded to the
policyholder. Although this sanction may be justified if an insurance
provider does not request a final agency determination or offers an
argument contrary to FCIC interpretation of policy or procedures, this
penalty is unconscionable if the insurance provider obtains either a
final agency determination or the testimony of an FCIC employee and the
arbitrator disregards the FCIC's interpretation. The Standard
Reinsurance Agreement (SRA) authorizes the denial of reinsurance or the
imposition of other penalties if an insurance provider does not comply
with the SRA or FCIC policies and procedures. If an insurance provider
obtains and offers a final agency determination during a legal
proceeding, and the arbitrator, judge or jury ignores the final agency
determination, the insurance provider has not violated the SRA and may
not be penalized.
Response: FCIC agrees that if an insurance provider obtains a final
agency determination or FCIC interpretation and it is disregarded by
the person hearing the appeal, or if no final agency determination or
FCIC interpretation has been sought by any party, the proper remedy is
nullification of the award under Subpart X.
Comment: A commenter recognized that FCIC expects arbitrators,
judges, and juries to adhere to a final agency determination's
interpretation of policies and procedures. However, the commenter did
not believe that an insurance provider may force an arbitrator or judge
to halt proceedings and request a final agency determination if a
dispute arises as to the meaning of a policy or procedure. At best, an
insurance provider may request that the arbitrator motion the court for
a stay in the proceedings. An insurance provider cannot control whether
or not an arbitrator or judge grants such a request or motion, and the
refusal of an arbitrator or judge to stay proceeding should not be the
basis for sanctioning an insurance provider.
Response: FCIC agrees an insurance provider cannot force an
arbitrator or judge to halt proceedings and request a final agency
determination or FCIC interpretation if a dispute arises as to the
meaning of a policy or procedure. However, an insurance provider may
request a stay in the proceedings. As stated above, while no judge or
arbitrator may be forced to delay a proceeding for the parties to
obtain a final agency determination or FCIC interpretation, this rule
puts all persons involved in the appeal on notice that failure to
obtain a final agency determination or FCIC interpretation when there
is a dispute regarding the meaning of a provision will result in the
nullification of any agreement or award. It is incumbent upon the
aggrieved party to request from FCIC whether an official interpretation
was sought or disregarded.
Comment: A commenter stated FCIC should clarify the process for
nullification of an award or deem it to occur automatically. The
proposed rule indicates that the failure to obtain or adhere to a final
agency determination will result in nullification of any award.
However, it is not clear from the proposed rule how a party can seek
nullification of an arbitration award, or whether nullification is a
self-executing, automatic occurrence.
In Great American Ins. Co. v. Moye, a Federal district court ruled
that the Federal Arbitration Act (FAA) (9 U.S.C. 1 et seq.) applies to
crop insurance arbitrations. The FAA severely limits a reviewing
court's ability to review an arbitration award. In that case, which has
been cited by many cases since, the court ruled that a ``court will not
sit as the arbitrator to re-evaluate the merits,'' and that ``an
arbitrator does not exceed his authority every time he makes an
interpretive error.'' Therefore, even though the policy terms and
regulations in Subpart X require nullification of an award if the
arbitrator engages in unauthorized interpretation, the FAA requires a
reviewing court to defer to the arbitrator's judgment except in
extraordinary circumstances.
The commenter stated it is clear that FCIC intends that the parties
have some process for determining whether an arbitration award is
nullified, as it recently stated in FAD-232, ``the policy allows for
nullification of the award if the party seeking nullification can show
that the inconsistent interpretation resulted in an improper award
being made.'' It is not clear where there is a process available for a
party seeking nullification to make that type of showing. Once the
arbitrator has rendered the final award under American Arbitration
Association (AAA) rules, the arbitrator's duties are complete (except
in very specific circumstances requiring revision for obvious
mathematical errors). AAA rules do provide a procedure for appeals, but
only in the event that both parties agree, which would be unlikely in
the event one party is satisfied with an award in its favor.
FCIC should revise the proposed rule so that nullification is an
automatic process, where an arbitration award containing unauthorized
interpretation is automatically void and unenforceable in Federal
Court. Alternatively, FCIC should make it clear where and how the
process for determining nullification must occur, whether that be
before the arbitrator who issued the award, through the AAA appeals
process made mandatory for crop insurance cases, or through a reviewing
court. Otherwise, nullification will usually be unenforceable in
practice.
Response: While the courts have agreed that the American
Arbitration Act applies in arbitrations, its application cannot be
absolute. Taxpayer dollars are used to fund the Federal crop insurance
program and FCIC has an obligation to ensure such funds are expended in
accordance with policy and procedure. Congress strengthened this
obligation by imposing on FCIC the express mandate to provide
interpretations of law and regulations in section 506(r) of the Act.
This later in time statute supersedes the American Arbitration Act
preclusion against reviewing arbitrator's interpretations.
[[Page 66577]]
FCIC agrees that if there is a failure to obtain, or adhere to, a
final agency determination or FCIC interpretation, any award is
nullified but there is no way for anyone to know or the parties may not
agree whether such a failure existed. Therefore, FCIC has revised this
rule to allow persons to obtain a determination by FCIC when that
person believes that a failure to comply with this subpart took place
during an arbitration by not obtaining, adhering, or requesting a final
agency determination or FCIC interpretation. Once FCIC determines that
a final agency determination or FCIC interpretation was required in an
arbitration or litigation, the provisions are revised to specify the
award is automatically nullified.
Comment: The commenter stated there is a word missing after ``any
other'' in the first sentence of proposed rule Sec. 400.766(c)(1).
Response: FCIC has revised Sec. 400.766 and this phrase is no
longer used. Therefore, the comment is not applicable.
Comment: A commenter recommended the wording in Sec. 400.767(b)(1)
be changed to ``. . . proceeding (e.g., mediation . . .''
Response: FCIC agrees and has revised the provision accordingly.
Comment: A commenter suggested FCIC clarify that nullification of
an arbitration award occurs when the decision made by the arbitrator
disregards, or the parties fail to obtain, any form of interpretation
from FCIC, not just those that are final agency determinations. The
proposed rule provides that the parties' failure to submit a timely
request for a final agency determination results in ``nullification of
any agreement or award'' (proposed Sec. 400.767(b)(3)(ii)(B)). The
proposed rule also provides that ``failure of the National Appeals
Division, arbitrator, or mediator to adhere to the final agency
determination provided under this subpart will result in the
nullification of any award or agreement in arbitration or mediation.''
The commenter agreed failure to obtain or adhere to a final agency
determination should result in nullification of the award, but the
commenter suggested FCIC revise the final rule so that it is clear that
the failure to obtain or adhere to any type of interpretation from FCIC
results in nullification. Another commenter stated final agency
determinations are not the only form of interpretation that FCIC
provides under existing processes nor will they be the only form under
the proposed revisions to Subpart X. In FAD-225, FCIC acknowledged that
the agency has multiple avenues under which it may deliver binding
interpretations of policy and procedure, including formal
interpretations of procedure under Manager's Bulletin MGR-05-018 and
witness testimony pursuant to 7 CFR part 1, subpart H. FCIC further
indicated, ``any interpretation provided by FCIC, in writing or orally,
will be binding in any mediation or arbitration. Subsequently, the
failure to obtain the required interpretation from FCIC or if an
arbitrator disregards an interpretation provided by FCIC, the award is
nullified.'' As written, the proposed rule does not clearly state that
the failure to obtain or adhere to other forms of interpretations from
FCIC will result in nullification. Since, the agency has already made
clear in a binding final agency determination that it is so, FCIC
should incorporate that principle into the final rule.
Response: FCIC agrees with the commenter. Section 20(a)(1)(ii) of
the Common Crop Insurance Policy Basic Provisions states ``Failure to
obtain any required interpretation from FCIC will result in the
nullification of any agreement or award.'' Therefore, FCIC has revised
the relevant provisions to clarify that FCIC interpretations may take
other forms and the nullification provisions apply to all FCIC
interpretations. However, FCIC has revised the language to state that
if an official interpretation from FCIC was not sought or was
disregarded it is incumbent upon the aggrieved party to request a
determination of whether such interpretation was required or
disregarded and, if it was, the award is automatically nullified.
Comment: A commenter stated Sec. 400.767(b)(3)(ii) of the proposed
rule is missing ``or interpretations of procedure or policy provision
not codified in the Code of Federal Regulations'' before ``may result
in''.
Response: As stated above, FCIC has revised the provisions to apply
to all FCIC interpretations. However, FCIC determined these provisions
regarding nullification are more appropriately contained in Sec.
400.766 and has revised the provisions accordingly. Additionally, FCIC
has revised the regulation to define ``FCIC interpretation'' as an
interpretation of a policy provision not codified in the Code of
Federal Regulations or any procedure used in the administration of any
Federal crop insurance program. Therefore, any references to
``interpretations of procedure or policy provision not codified in the
Code of Federal Regulations'' have been removed and replaced with the
term ``FCIC interpretation'' throughout the regulation.
Comment: A commenter requested that FCIC delete the reference to
nullification of arbitration awards contained Sec. 400.767(b).
Language, which mirrors this provision, is already contained in the
Basic Provisions, so it is redundant to include the reference to
nullification in this rule.
Response: Proposed section 400.767(b) reiterates and expands the
provisions in section 20(a)(1)(ii) of the Basic Provisions which simply
states that a failure to obtain any required interpretation from FCIC
will result in the nullification of any agreement or award. FCIC has
revised the provisions to include requests to be made to FCIC regarding
whether there has been non-compliance with section 20 of the Basic
Provisions and Subpart X and failure of the National Appeals Division,
arbitrator, mediator, or judge to adhere to the final agency
determination or FCIC interpretation provided under this subpart will
result in the nullification of any award or agreement in arbitration or
mediation. However, as stated above, all these provisions regarding
nullification have been moved to Sec. 400.766.
Comment: A commenter stated FCIC's stated purpose for promulgating
the new regulations is to ``clarify existing provisions, eliminate
redundancies, remove or update obsolete references, simplify the
regulation to address final agency determinations and interpretations
of procedures or policy provisions not codified in the Code of Federal
Regulations in the same regulation, simplify program administration,
and improve clarity of the requestor and FCIC obligations.'' The
commenter supported this worthy goal. However, there are several
portions of the proposed rule which the commenter believed require
revision or clarification so that the new rule is compatible with the
practicalities of policyholder and insurance provider disputes and
arbitration proceedings.
The commenter noted the proposed rule describes several types of
interpretations by FCIC, including final agency determinations and
interpretations of procedure. The commenter stated the proposed rule
will promote unnecessary litigation, since it provides that no one may
request an interpretation without first initiating arbitration, suit,
or mediation (see proposed Sec. 400.767(b)).
Final agency determinations and interpretations of procedure from
FCIC should be available to program participants as a tool to resolve
disputes before formal dispute resolution processes commence, to avoid
costly
[[Page 66578]]
and possibly unnecessary arbitration or litigation proceedings. There
are times when the policy terms, procedure, or how policies and
procedures apply to specific factual situations are not entirely clear,
and an insurance provider must seek guidance from FCIC. Those instances
may occur during the adjustment of a claim, or when a policyholder
disagrees with an insurance provider determination, but has not yet
filed a Demand for Arbitration. It has been the commenter's experience
that in those cases, a formal interpretation from RMA can help avert or
resolve a dispute without having to resort to arbitration, which can be
costly for both parties. For that reason, the commenter suggested FCIC
remove from the final rule the requirement that arbitration be
initiated prior to submission of the request for interpretation.
Another commenter stated proposed rule Sec. 400.767(b) limits
requests for interpretations to formal judicial review, mediation, or
arbitration. There are frequently situations where insurance providers
may need binding clarification of FCIC policies or procedures to ensure
that they are accurately administering policies in a uniform manner. It
is a benefit to insurance providers, insureds, and the program to be
able to submit such requests before the expense and exposure of
adversarial proceedings takes place. Although there are other means
which insurance providers may use to request an interpretation, they
may be inadequate because they do not contain the 90-day time limit
imposed by the final agency determination process and may not result in
published interpretations. As a result, the commenter believed this
section should be deleted or revised to carve out a separate right for
insurance providers to request interpretations of policy provisions or
procedures even if they are not related to a formal arbitration or
mediation.
Response: FCIC agrees and has removed the requirement that formal
judicial review, mediation, or arbitration must be initiated before a
final agency determination or FCIC interpretation can be requested.
Comment: A commenter stated language in the proposed rule suggests
that only the party who initiated arbitration or suit can request an
interpretation from FCIC. As currently worded, only the party who
actually initiates the legal proceeding may request a final agency
determination or an interpretation of procedure. A defendant or
arbitration respondent cannot (see proposed Sec. 400.767(b): ``You may
request . . . only if you have legally filed or formally initiated. .
.''). Both parties to an arbitration should be permitted to request an
interpretation from FCIC. It is not uncommon for parties to disagree
about whether an interpretation is necessary, and in those cases, one
party may need to seek the interpretation unilaterally. Further,
respondents in arbitration and defendant in suits, which in most cases
will be the insurance providers, have just as much a right to avail
themselves of FCIC's interpretation process as claimants/plaintiffs.
Response: Either party may request an interpretation, not just the
party that initiated the proceeding. Further, as stated above, parties
no longer have to wait until arbitration, mediation or judicial review
before a request may be made. The language has been revised
accordingly.
Comment: A commenter stated the new request timing requirements in
proposed Sec. 400.767(b)(3) will conflict with certain AAA rules and
be impractical in many cases. FCIC should clarify how the
interpretation request process should proceed in those cases. Section
20 of the Basic Provisions (7 CFR 457.8) provides that the rules of the
American Arbitration Association (AAA) apply to disputes regarding
insurance provider determinations. The AAA Commercial Arbitration Rules
contain a set of ``Expedited Procedures'' that apply in cases where the
amount in controversy is $75,000 or less. Those Expedited Procedures
require that the hearing occur within 30 days of the appointment of the
arbitrator. The proposed rule requires that all interpretation requests
be submitted ``90 days before the date the mediation, arbitration or
litigation in which the interpretation will be used is scheduled to
begin'' (Sec. 400.767(b)(3)), but not until after arbitration has
commenced (Sec. 400.767(b)). In cases where the AAA Expedited
Procedures apply, it would be impossible for the parties to comply with
those conflicting requirements.
The commenter suggested FCIC either remove the timeliness
requirement, or state clearly in the final rule that any AAA rule that
does not allow the parties sufficient time to request an interpretation
prior to the hearing is in conflict with the policy terms and does not
apply to crop insurance arbitrations.
A commenter also stated the new request timing requirements in
Sec. 400.767(b)(3) will be impractical in many cases. FCIC should
clarify the meaning of ``proceeding'' in Sec. 400.767(b)(3)(iii) to
ensure that necessary interpretations from the agency are available in
all cases. Even in cases where the Expedited Procedures do not apply,
the timeliness rule will cause difficulty. It is not always clear at
the outset of an arbitration that the dispute involves a matter of
interpretation. Arbitration demands typically contain only a cursory
description of the dispute and it is not until the parties have engaged
in some exchange of discovery materials or legal briefing that the
parties identify a dispute over interpretation. It is not uncommon for
that to occur within 90 days of the arbitration hearing date.
The proposed rule contains a contingency to allow the arbitrator,
mediator, or judge to request an interpretation in instances when an
interpretation dispute arises ``during the mediation, arbitration, or
litigation proceeding.'' It is not clear whether the term
``proceeding'' as used in the proposed rule refers only to the
mediation, arbitration hearing, or trial, or whether the term refers to
any proceedings, including discovery and briefing occurring in the
course of the mediation, arbitration, or litigation. FCIC should
clarify the meaning of that term.
The commenter suggested the final rule allow the parties to seek
interpretations whenever a dispute arises in the process. If FCIC has a
compelling reason to restrict require requests from the parties to be
submitted 90-days prior to the hearing, the final rule should provide
an avenue for making a request if an interpretation dispute arises
within 90-days of the hearing.
Response: The AAA rules only apply to the extent they do not
conflict with the policy. The policy requires obtaining an
interpretation of policy and procedure if there is a dispute regarding
its meaning and Subpart X prescribes how such requests are to be made.
Therefore, Subpart X supersedes the AAA rules if there is a conflict.
Further, the 90-day time-period is necessary to allow FCIC time to
provide an interpretation in writing given its limited resources. In
addition, as stated above, FCIC has revised the rule to allow requests
for interpretations be made at any time, not just when mediation,
arbitration or litigation has been initiated. This should mitigate the
timing issues in many cases. However, when it is discovered that an
interpretation is required after the proceedings have been initiated,
FCIC acknowledges there are times when such a time limit is
impracticable. Therefore, FCIC has revised the rule to provide some
flexibility when cases are operating under the expedited procedures
under AAA rules or there is
[[Page 66579]]
an appeal between a producer and RMA before NAD. However, these appeals
processes have set deadlines and FCIC is adding flexibility to
accommodate them but in all other cases, the parties have the
flexibility to set the actual date of the mediation, arbitration, etc.
Therefore, FCIC is maintaining the 90-day rule for all other
proceedings to allow FCIC sufficient time to go through the
administrative process of making an interpretation. Further, FCIC has
added a definition of ``proceeding'' that clarifies that the proceeding
commences on the day the complaint or notice of appeal is filed for
arbitration or litigation and ends when the decision has been rendered
so it encompasses the discovery process. This should allow the parties
sufficient time to make a request 90 days prior to the date of
mediation, hearing, arbitration or trial.
As noted by the commenter, the proposed rule contains a contingency
to allow the NAD hearing officer, arbitrator, mediator, or judge, to
request an interpretation in instances when a dispute arises during the
mediation, arbitration, or litigation proceeding.
Comment: A commenter recommended the wording in Sec. 400.767(c) be
changed to ``. . . opposing interpretations, a joint request. . .''
Response: FCIC agrees and has revised the provisions accordingly.
Comment: A commenter recommended the wording in Sec. 400.768(a) be
changed to ``. . . regarding, or that contains, specific factual
information. . .''
Response: FCIC agrees and has revised the provisions accordingly.
Comment: A commenter recommended the wording in Sec. 400.768(a)(2)
be changed to ``. . . those are fact-specific and could. . .''
Response: FCIC agrees and has revised the provisions accordingly.
Comment: A commenter recommended FCIC not forbid parties seeking
interpretation requests from offering hypothetical examples. The
proposed rule provides at Sec. 400.768(a)(2), ``FCIC will not consider
any examples provided in your interpretation because those are fact
specific and could be construed as a finding of fact by FCIC,'' and
that FCIC will provide any examples that are necessary. Parties should
be permitted to provide hypothetical examples. Because an arbitrator
cannot decide whether or how a policy provision applies to a specific
set of facts, restricting the parties from using illustrative
hypotheticals will make it difficult for FCIC to render interpretations
regarding whether how policy provisions apply with enough specificity
for the arbitrator to render a compliant award.
Section 20(a)(1) of the Basic Provisions exempts from the
arbitrator's authority any disputes ``regarding whether a specific
policy provision or procedure is applicable to the situation'' or ``how
it is applicable.'' If the arbitrator does not have authority to
determine how procedure applies to a specific factual situation, the
parties must be able to request an interpretation from FCIC with enough
specificity so that the response gives the arbitrator clear direction
on how the policy terms apply to that type of situation. The best way
to do that is with an analogous hypothetical. In many cases, it will
not be clear to an arbitrator how to apply an interpretation of the
policy to a specific set of facts without an analogous example, and in
those cases, the arbitrator will have no choice but to engage in
unauthorized interpretation.
In many cases, an interpretive dispute is not even apparent,
because the policy terms appear to be unambiguous, but only when
presented with a particular set of circumstances, does the need for
interpretation arise. It seems unlikely that FCIC would be able to
generate examples on its own that will direct an arbitrator with
sufficient specificity regarding how to apply the policy to a peculiar
factual situation, since FCIC will have no knowledge of the factual
situation involved in the case.
The commenter recognized FCIC must avoid making determinations of
specific facts relating to individual policies and circumstances, but
suggests that in cases where a requesting party's example is too fact-
specific, FCIC can still reject the request or disregard the example
pursuant to proposed at Sec. 400.768(a)(1) (``Regardless of whether or
not FCIC accepts a request, FCIC will not consider specific factual
information to situations or cases in any final agency
determination.''). The commenter suggested parties be permitted to
provide hypothetical examples to aid arbitrators in applying the policy
to the facts before them.
Response: Currently, FCIC receives requests for final agency
determinations with large amounts of specific factual situation or case
information, so if FCIC were to consider that factual information, FCIC
would be infringing on the role of the mediator, arbitrator, hearing
officer, or judge who decides the facts and applies the law to those
facts. Further, what the commenter is suggesting is the use of
hypotheticals to let the FCIC inform the arbitrator, mediator, etc.
know how to apply the interpretation to the facts. However, that is not
the role given to FCIC in section 506(r) of the Act. FCIC's role is
simply to provide interpretations of regulations and statutes and
policy provisions and procedures. It is the role of the mediator,
arbitrator, etc. to apply that interpretation to the particular facts
of the case. In addition, hypotheticals can present some facts and not
others, which can skew the outcome and FCIC is in no position to make
such determinations. FCIC is revising the rule to clarify that it will
not accept any request for a final agency determination or FCIC
interpretation that contains facts or hypotheticals to ensure that its
interpretation is objective and unbiased. To the extent that FCIC
believes that a hypothetical will provide clarification of its
interpretation, FCIC will provide such hypothetical so it cannot to be
construed as any determination of a factual situation. No change has
been made.
Comment: A commenter recommended the wording in Sec. 400.768(b) be
changed to ``. . . Code of Federal Regulations, but will notify you. .
.''
Response: As stated above, FCIC has revised the regulation to
include the term ``FCIC interpretation.'' Therefore, the phrase the
commenter is referencing is no longer used and is replaced with the
term ``FCIC interpretation.''
Comment: A commenter recommended the wording in Sec. 400.768(c) be
changed to ``. . . under Sec. 400.768(b), the 90-day time period. .
.'', and similarly change the two additional references to 90-day time
period in this section.
Response: FCIC agrees and has revised the provisions accordingly.
Comment: A commenter stated in proposed rule Sec. 400.765, the
definition of a ``final agency determination'' is limited to
interpretations of ``regulations, or any policy provision that is
codified in the Federal Register'' but Subpart X is being expanded to
include interpretations of ``procedure or policy provision not codified
in the Code of Federal Regulations'', as referenced throughout the
proposed rule. The only distinction for these two types of
interpretations is whether or not they are published on RMA's website
and binding on all program participants, as indicated in Sec.
400.768(g) and (h). The commenter recommended eliminating Sec.
400.768(h) and include publication of procedure and policies that are
not codified in the Federal Register in Sec. 400.768(g). These changes
ensure that RMA interpretations of procedure or 508(h) and pilot
policies, which are not codified in the Federal Register, would be
published and
[[Page 66580]]
binding on all program participants so that all policies and procedures
would be administered uniformly by every insurance provider.
Alternatively, eliminating Sec. 400.768(h) would also allow the
definition for ``final agency determination'' to be expanded to include
``. . . or interpretations of procedure or policy provision not
codified in the Code of Federal Regulations''. Modifying the definition
of final agency determination in this way allows the phrase ``or
interpretations of procedure or policy provision not codified in the
Code of Federal Regulations'' referenced throughout the proposed rule
to be eliminated. For example, Sec. 400.766(a) could be simplified to
read ``The regulations contained in this subpart prescribe the rules
and criteria for obtaining a final agency determination.''
Response: FCIC agrees that the provisions are too narrowly drafted
but not for the reasons provided by the commenter. The proposed rule
failed to take into consideration other forms of interpretations, such
as testimony. Therefore, FCIC is revising a number of provisions to
identify final agency determinations and FCIC interpretations. These
revisions will also make distinctions between interpretations of
statute and regulations and interpretations of unpublished policy
provisions and procedures as final agency determinations and FCIC
interpretations respectively. Additionally, FCIC has revised the
regulation to define ``FCIC interpretation'' as an interpretation of a
policy provision not codified in the Code of Federal Regulations or any
procedure used in the administration of any Federal crop insurance
program. Therefore, any references to ``interpretations of procedure or
policy provision not codified in the Code of Federal Regulations'' have
been removed and replaced with the term ``FCIC interpretation''
throughout the regulation.
However, the distinction between published and unpublished final
determinations and their binding effect stems from section 506(r) of
the Act, which gives FCIC express authority to provide interpretations
of statute and regulations. Based on this statutory authority, FCIC
publishes its final agency determinations and makes them binding on all
participants. However, there are policies that are published as
regulations and some policies and policy provisions that are not. Those
policies that are published as regulations have the force of law. Those
policies that are not published as regulations have the force of
contracts but not law. However, to ensure consistency and equitable
treatment in the program, FCIC interpreted section 506(r) to authorize
it to issue all interpretations of policy provisions. The same is true
for procedures. FCIC discovered there was disparate interpretations of
its procedures and for the sake of consistency and equitable treatment,
FCIC included procedures as subject to its interpretation. Since,
interpretations of provisions not included in statute or regulation is
not statutorily mandated, such FCIC interpretations are only binding on
the parties to the dispute, including the arbitrator, mediator, judge,
or the National Appeals Division. No change has been made.
Comment: A commenter recommended the wording in Sec. 400.768(i) be
changed to ``. . . loss adjuster as it relates to their performance of
following FCIC policy provisions. . .''
Response: FCIC agrees and has revised the provisions accordingly.
Executive Orders 12866, 13563, and 13771
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. 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. Executive Order 13771,
``Reducing Regulation and Controlling Regulatory Costs,'' requires
that, in order to manage the costs required to comply with Federal
regulations, that for every new significant or economically significant
regulation issued, the new costs must be offset by the elimination of
at least two prior regulations. This rule is not subject to Executive
Order 13771.
Paperwork Reduction Act of 1995
Pursuant to the provisions of the Paperwork Reduction Act of 1995
(44 U.S.C. chapter 35), the collections of information in this rule
have been approved by the Office of Management and Budget (OMB) under
control number 0563-0055.
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), Public
Law 104-4, 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
[[Page 66581]]
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. The
regulation does not require any more action on the part of the small
entities than is required on the part of large entities. A Regulatory
Flexibility Analysis has not been prepared since this regulation does
not have an impact on 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 the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115, June 24, 1983.
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. Interpretations of statutory and regulatory
provisions are matters of general applicability and, therefore, no
administrative appeals process is available and judicial review may
only be brought to challenge the interpretation after seeking a
determination of appealability by the Director of the National Appeals
Division (NAD) in accordance with 7 CFR part 11. An interpretation of a
policy provision not codified in the Code of Federal Regulations or any
procedure used in the administration of any Federal crop insurance
program (hereinafter referred to as ``FCIC interpretations'') are
administratively appealable and the appeal provisions published at 7
CFR part 11 must be exhausted before any action for judicial review may
be brought against FCIC.
Environmental Evaluation
This action is not expected to have a significant economic 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 400
Administrative practice and procedure, Crop insurance, Reporting
and recordkeeping requirements.
Final Rule
Accordingly, as set forth in the preamble, the Federal Crop
Insurance Corporation amends 7 CFR part 400 as follows:
PART 400--GENERAL ADMINISTRATIVE REGULATIONS
0
1. The authority citation for part 400 continues to read as follows:
Authority: 7 U.S.C. 1506(1), 1506(o).
0
2. Revise subpart X to read as follows:
Subpart X--Interpretations of Statutory Provisions, Policy Provisions,
and Procedures
Sec.
400.765 Definitions.
400.766 Basis and applicability.
400.767 Requestor obligations.
400.768 FCIC obligations.
Subpart X--Interpretations of Statutory Provisions, Policy
Provisions, and Procedures
Sec. 400.765 Definitions.
The definitions in this section apply to this subpart.
Act. The Federal Crop Insurance Act, 7 U.S.C. 1501-1524.
Approved insurance provider. A private insurance company that has
been approved by FCIC to sell and service Federal crop insurance
policies under a reinsurance agreement with FCIC.
FCIC. The Federal Crop Insurance Corporation, a wholly owned
government corporation within the United States Department of
Agriculture.
FCIC interpretation. An interpretation of a policy provision not
codified in the Code of Federal Regulations or any procedure used in
the administration of the Federal crop insurance program.
Final agency determination. Matters of general applicability
regarding FCIC's interpretation of provisions of the Act or any
regulation codified in the Code of Federal Regulations, including
certain policy provisions, which are applicable to all participants in
the Federal crop insurance program and the appeals process.
NAD. The USDA National Appeals Division. See 7 CFR part 11.
Participant. Any applicant for Federal crop insurance, an insured,
or approved insurance provider or their agent, loss adjuster, employee
or contractor.
Procedure. All FCIC issued handbooks, manuals, memoranda, and
bulletins for any crop insurance policy reinsured by FCIC.
Proceeding. The process that starts with the filing of a complaint,
notice of appeal, or other such document that commences the appeals
process, and ends with the adjudicatory body issuing its decision, and
includes all necessary activities, such as discovery, that occur within
that time frame.
RMA. The Risk Management Agency, an agency of the United States
Department of Agriculture.
You. The requestor of a final agency determination or FCIC
interpretation.
Sec. 400.766 Basis and applicability.
(a) The regulations contained in this part prescribe the rules and
criteria for obtaining a final agency determination or a FCIC
interpretation.
(1) FCIC will provide a final agency determination or a FCIC
interpretation, as applicable, for statutory, regulatory, or other
policy provisions or procedures that were in effect during the four
most recent crop years from the crop year in which your request was
submitted. For example, for a request received in the 2014 crop year,
FCIC will consider requests for the 2014, 2013, 2012, and 2011 crop
years.
(2) If FCIC determines a request is outside the scope of crop years
authorized in paragraph (a)(1) of this section, you will be notified
within 30 days of the date of receipt by FCIC.
(3) If the statutory, regulatory or other policy provisions or
procedures have changed for the time period you seek an interpretation
you must submit a separate request for each policy provision or
procedure by year. For example, if you seek an interpretation of
section 6(b) of the Small Grains Crop Provisions for the 2012 through
2015 crop years but the policy provisions were revised starting with
the 2014 crop year, you must submit two requests, one for the 2012 and
2013 crop years and another for the 2014 and 2015 crop years.
(b) With respect to a final agency determination or a FCIC
interpretation:
(1) If there is a dispute between participants that involves a
final agency determination or a FCIC interpretation:
(i) The parties are required to seek an interpretation of the
disputed provision
[[Page 66582]]
from FCIC in accordance with this subpart (This may require that the
parties seek a stay of the proceedings until an interpretation is
provided, if such proceedings have been initiated); and
(ii) The final agency determination or FCIC interpretation may take
the form of a written interpretation or, at the sole discretion of
FCIC, may take the form of testimony from an employee of RMA expressly
authorized in writing to provide interpretations of policy or procedure
on behalf of FCIC.
(2) All written final agency determinations issued by FCIC are
binding on all participants in the Federal crop insurance program for
the crop years the policy provisions are in effect. All written FCIC
interpretations and testimony from an employee of RMA are binding on
the parties to the dispute, including the arbitrator, mediator, judge,
or NAD.
(3) Failure to request a final agency determination or FCIC
interpretation when required by this subpart or failure of NAD,
arbitrator, mediator, or judge to adhere to the final agency
determination or FCIC interpretation provided under this subpart will
result in the nullification of any award or agreement in arbitration or
mediation in accordance with the provisions in the ``Mediation,
Arbitration, Appeal, Reconsideration, and Administrative and Judicial
Review'' section or similar section in all crop insurance policies.
(4) If either party believes an award or decision was rendered by
NAD, arbitrator, mediator, or judge based on a disputed provision in
which there was a failure to request a final agency determination or
FCIC interpretation or NAD, arbitrator, mediator, or judge's decision
was not in accordance with the final agency determination or FCIC
interpretation rendered with respect to the disputed provision, the
party may request FCIC review the matter to determine if a final agency
determination or FCIC interpretation should have been sought in
accordance with Sec. 400.767.
(i) Requests should be submitted through one of the methods
contained in Sec. 400.767(a)(1);
(ii) If FCIC determines that a final agency determination or FCIC
interpretation should have been sought and it was not, or the decision
was not in accordance with the final agency determination or FCIC
interpretation rendered with respect to the disputed provision:
(A) The award is automatically nullified; and
(B) Either party may appeal FCIC's determination that a final
agency determination or FCIC interpretation should have been sought and
it was not, or the decision was not in accordance with the final agency
determination or FCIC interpretation rendered with respect to the
disputed provision to NAD in accordance with 7 CFR part 11.
(5) All written final agency determinations that are published on
RMA's website are considered matters of general applicability and are
not appealable to NAD. Before obtaining judicial review of any final
agency determination, you must obtain an Administrative Final
Determination from the Director of NAD on the issue of whether the
final agency determination is a matter of general applicability.
(6) With respect to an administrative review of a FCIC
interpretation:
(i) If either party to the proceeding does not agree with the
written FCIC interpretation, a request for administrative review may be
filed in accordance with 7 CFR part 400, subpart J. If you seek an
administrative review from FCIC, such request must be submitted in
accordance with Sec. 400.767(a).
(ii) FCIC will not accept requests for administrative review from
NAD, a mediator, or arbitrator.
(iii) The RMA Office of the Deputy Administrator for Product
Management will make a determination on the request for administrative
review not later than 30 days after receipt of the request.
(iv) Regardless of whether you have sought administrative review,
you may appeal a FCIC interpretation under this subsection to NAD in
accordance with 7 CFR part 11.
Sec. 400.767 Requestor obligations.
(a) All requests for a final agency determination or FCIC
interpretation submitted under this subpart must:
(1) Be submitted to the Deputy Administrator using the guidelines
provided on RMA's website at www.rma.usda.gov through one of the
following methods:
(i) In writing by certified mail or overnight delivery, to the
Deputy Administrator, Risk Management Agency, United States Department
of Agriculture, Beacon Facility, Stop 0801, Room 421, P.O. Box 419205,
Kansas City, MO 64141-6205;
(ii) By facsimile at (816) 926-3049; or
(iii) By electronic mail at [email protected];
(2) State whether you are seeking a final agency determination or
FCIC interpretation;
(3) Identify and quote the specific provision in the Act,
regulations, procedure, or policy provision for which you are
requesting a final agency determination or a FCIC interpretation;
(4) Contain no more than one request for an interpretation (You
must make separate requests for each provision if more than one
provision is at issue. For example, if there is a dispute with the
interpretation of Paragraph 3 of the Loss Adjustment Manual, then one
request for an interpretation is required. If there is a dispute with
the interpretation of Paragraph 3 of the Loss Adjustment Manual and
Paragraph 2 of the Macadamia Nut Loss Adjustment Standards Handbook,
then two separate requests for an interpretation are required);
(5) State the crop, crop year(s), and plan of insurance applicable
to the request;
(6) State the name, address, and telephone number of a contact
person for the request;
(7) Contain your detailed interpretation of the specific provision
of the Act, regulations, procedure, or policy provision for which the
request for interpretation is being requested; and
(8) Not contain any specific facts, alleged conduct, or
hypothetical situations or the request will be returned to the
requestor without consideration.
(b) You must advise FCIC if the request for a final agency
determination or FCIC interpretation will be used in a judicial review,
mediation, or arbitration.
(1) You must identify the type of proceeding (e.g., mediation,
arbitration, or litigation), if applicable, in which the interpretation
will be used, and the date the proceeding is scheduled to begin, or the
earliest possible date the proceeding would likely begin if a specific
date has not been established;
(2) The name, address, telephone number, and if applicable, fax
number, or email address of a contact person for both parties to the
dispute;
(3) Unless the parties elect to use the expedited review process
available under the AAA rules or the appeal is before NAD, requests
must be submitted not later than 90 days before the date the mediation,
arbitration, or litigation proceeding in which the interpretation will
be used is scheduled to begin.
(i) If the rules of the court, mediation, or arbitration require
the interpretation prior to the date the proceeding begins, add 90 days
to the number of days required prior to the proceeding. For example, if
a court requires the interpretation 20 days prior to the date the
proceeding begins, you must submit
[[Page 66583]]
the request 110 days before the proceeding is scheduled to begin.
(ii) Failure to timely submit a request for a final agency
determination or FCIC interpretation may result in:
(A) FCIC issuing a determination that no interpretation could be
made because the request was not timely submitted; and
(B) Nullification of any agreement or award in accordance with
Sec. 400.766 if no final agency determination or FCIC interpretation
can be provided.
(iii) Notwithstanding paragraph (b) of this section, if during the
mediation, arbitration, or litigation proceeding, an issue arises that
requires a final agency determination or FCIC interpretation the
mediator, arbitrator, judge, or magistrate must promptly request a
final agency determination or FCIC interpretation in accordance with
Sec. 400.767(a).
(4) FCIC at its sole discretion may authorize personnel to provide
an oral or written final agency determination or FCIC interpretation,
as appropriate; and
(5) Any decision or settlement resulting from such mediation,
arbitration, or litigation proceeding before FCIC provides its final
agency determination or FCIC interpretation can be nullified in
accordance with Sec. 400.766.
(c) If multiple parties are involved and have opposing
interpretations, a joint request for a final agency determination or
FCIC interpretation including both requestor interpretations in one
request is encouraged. If multiple insured persons are parties to the
dispute, and the request for a final agency determination or FCIC
interpretation applies to all parties, one request may be submitted for
all insured persons instead of separate requests for each person. In
this case, the information required in this section must be provided
for each person.
Sec. 400.768 FCIC obligations.
(a) FCIC will not provide a final agency determination or FCIC
interpretation for any request regarding, or that contains, specific
factual information to situations or cases, such as acts or failures to
act of any participant under the terms of a policy, procedure, or any
reinsurance agreement.
(1) FCIC will not consider specific factual information to
situations or cases in any final agency determination or FCIC
interpretation.
(2) FCIC will not consider any examples or hypotheticals provided
in your interpretation because those are fact-specific and could be
construed as a finding of fact by FCIC. If an example or hypothetical
is required to illustrate an interpretation, FCIC will provide the
example in the interpretation.
(b) If, in the sole judgment of FCIC, the request is unclear,
ambiguous, or incomplete, FCIC will not provide a final agency
determination or FCIC interpretation, but will notify you within 30
days of the date of receipt by FCIC that the request is unclear,
ambiguous, or incomplete.
(c) If FCIC notifies you that a request is unclear, ambiguous or
incomplete under paragraph (b) of this section, the 90-day time period
for FCIC to provide a response is stopped on the date FCIC notifies
you. On the date FCIC receives a clear, complete, and unambiguous
request, FCIC has the balance of the days remaining in the 90-day time
period to provide a response to you. For example, FCIC receives a
request for a final agency determination on January 10. On February 10,
FCIC notifies you the request is unclear. On March 10, FCIC receives a
clarified request that meets all requirements for FCIC to provide a
final agency determination. FCIC has sixty days from March 10, the
balance of the 90-day time period, to provide a response.
(d) FCIC reserves the right to modify the request if FCIC
determines that a request for a final agency determination is really a
request for a FCIC interpretation or vice versa.
(e) FCIC will provide you a written final agency determination or a
FCIC interpretation within 90 days of the date of receipt for a request
that meets all requirements in Sec. 400.767.
(f) If FCIC does not provide a response within 90 days of receipt
of a request, you may assume your interpretation is correct for the
applicable crop year. However, your interpretation shall not be
considered generally applicable and shall not be binding on any other
program participants. Additionally, in the case of a joint request for
a final agency determination or a FCIC interpretation, if FCIC does not
provide a response within 90 days, neither party may assume their
interpretations are correct.
(g) FCIC will publish all final agency determinations as specially
numbered documents on the RMA website because they are generally
applicable to all program participants.
(h) FCIC will not publish any FCIC interpretation because it is
only applicable to the parties in the dispute. You are responsible for
providing copies of the FCIC interpretation to all other parties.
(i) When issuing a final agency determination or a FCIC
interpretation, FCIC will not evaluate the insured, insurance provider,
agent, or loss adjuster as it relates to their performance of following
FCIC policy provisions or procedures. Interpretations will not include
any analysis of whether the insured, insurance provider, agent, or loss
adjuster was in compliance with the policy provision or procedure in
question.
Martin R. Barbre,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 2018-27858 Filed 12-26-18; 8:45 am]
BILLING CODE 3410-08-P