7 CFR 457.162 - Nursery crop insurance provisions.

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§ 457.162 Nursery crop insurance provisions.
The Nursery Crop Insurance Provisions for the 2006 and succeeding crop years are as follows:
FCIC Policies
United States Department of Agriculture
Federal Crop Insurance Corporation
Reinsured Policies
(Appropriate title for insurance provider)
Both FCIC and Reinsured Policies
Nursery Crop Insurance Provisions
If a conflict exists among the policy provisions, the order of priority is as follows: (1) The Catastrophic Risk Protection Endorsement, if applicable; (2) the Special Provisions; (3) these Crop Provisions; and (4) the Basic Provisions with (1) controlling (2), etc.
1. Definitions
Act. The Federal Crop Insurance Act, 7 U.S.C. 1501 et seq.
American Standard for Nursery Stock. A publication of the American Nursery and Landscape Association, or a subsequent successor organization, issued in accordance with the rules of the American National Standards Institute, Inc. that provides common terminology and standards for nurseries.
Amount of insurance. For each basic unit, your basic unit value multiplied by the coverage level percentage you elect and multiplied by your share.
Basic unit value. The full value of all insurable plants in each basic unit as shown on your PIVR, including any revision that increases the value of your insurable plant inventory.
Container grown. Nursery plants planted and grown in standard nursery containers either above ground or that are placed in the ground, either directly or when placed in another pot in the ground (i.e., pot-in-pot).
Crop year. The period beginning the day insurance attaches and extending until the following May 31. Crop year is designated by the year in which the insurance period ends.
Crop year deductible. The deductible percentage multiplied by the sum of all plant inventory values for each basic unit. The crop year deductible will be increased for any increases in the inventory value on the PIVR or through the purchase of a Peak Inventory Endorsement, if in effect at the time of loss. The crop year deductible will be reduced by any previously incurred deductible, except any incurred under the Rehabilitation Endorsement, if you timely report each loss to us.
Deductible percentage. An amount equal to 100 percent minus the percent of coverage you select.
Eligible Plant List. A list that includes the botanical and common names of insurable plants, the winter protection requirements for container grown material and the areas in which they apply, the hardiness zone to which field grown material is insurable, the designated hardiness zone for each county, and the unit classification for each plant on the list, published by FCIC on RMA's Web site at http://www.rma.usda.gov . It is also available on compact disk from your crop insurance agent.
Fabric grow bag. A fabric bag (including a woven or matted bag with a plastic or fabric bottom) used for growing woody plants in-ground or as an above-ground nursery plant container that provides adequate drainage and is appropriate in size for the plant.
FCIC. The Federal Crop Insurance Corporation, a wholly owned corporation within the USDA, or a successor agency.
Field grown. Nursery plants planted and grown in the ground without the use of an artificial root containment device. Plants grown in in-ground fabric grow bags, plants that are balled and burlapped or plants grown in containers that allow the plants to root (excluding fibrous roots) into the ground (for example, a container without a bottom) are also considered field grown.
Field market value A. The value of undamaged insurable plants, based on the lesser of: (1) The prices contained in the Plant Price Schedule; or (2) the prices contained in your catalog or price list in the basic unit immediately prior to the occurrence of any loss, as determined by our appraisal. This allows the amount of insurance under the policy to be divided among the individual units in accordance with the actual value of the plants in the unit at the time of loss to determine whether you are entitled to an indemnity for insured losses in the basic unit. This value is also used to calculate the actual value of the plants in the basic unit at the time of loss to ensure that you have not under-reported your plant values. For liners, the total value of undamaged liners is multiplied by the survival factor to determine the value of undamaged insurable plants.
Field market value B. The value of insurable plants, based on the lesser of: (1) The prices contained in the Plant Price Schedule; or (2) the prices contained in your catalog or price list in the basic unit 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.
Good nursery practices. In lieu of the definition of “good farming practices” contained in section 1 of the Basic Provisions, the horticultural practices generally in use in the area for nursery plants to make normal progress toward the stage of growth at which marketing can occur and: (1) For conventional practices, generally recognized by agricultural experts for the area as compatible with the nursery plant production practices and weather conditions in the county; or (2) for organic practices, generally recognized by the organic agricultural industry for the area as compatible with the nursery plant production practices and weather conditions in the county or contained in the organic plan. We may, or you may request us to, contact FCIC to determine whether or not production methods will be considered to be “good nursery practices.”
Irrigated practice. In lieu of the definition in the Basic Provisions, the application of water, using appropriate systems and at the proper times, to provide the quantity of water needed to sustain normal growth of your insured plant inventory and provide cold protection for applicable plants as specified in the Eligible Plant List.
Liners. Plants produced in standard nursery containers that are equal to or greater than 1 inch in diameter (including trays containing 200 or fewer individual cells, unless specifically provided by the Special Provisions) but less than 3 inches in diameter at the widest point of the container or cell interior, have an established root system, and meet all other conditions specified in the Special Provisions.
Loss. Field market value A minus field market value B.
Marketable. Of a condition that it may be offered for sale in the market.
Monthly proration factors. Factors contained in the actuarial documents that are used to calculate premium when you do not insure the nursery plants for an entire crop year.
Nursery. A business enterprise that grows the nursery plants and derives at least 50 percent of its gross income from the wholesale marketing of such plants.
Occurrence deductible. This deductible allows a smaller deductible than the crop year deductible to be used when the inventory value is less than the reported basic unit value. The occurrence deductible is the lesser of: (1) The deductible percentage multiplied by field market value A multiplied by the under-report factor; or (2) the crop year deductible.
PIVR. The plant inventory value report, your report that declares the value of insurable plants in accordance with section 6.
Plant Price Schedule. A schedule of insurable plant prices that establishes the maximum insurable value of undamaged insurable plants, published by FCIC as an actuarial document available on RMA's Web site at http://www.rma.usda.gov. It is also available on compact disk from your crop insurance agent.
Practice. A cultural method of producing plants. Container grown and field grown are considered separate insurable practices.
Sales closing date. In lieu of the definition in section 1 of the Basic Provisions, the date shown in the Special Provisions. New-policy applications may be filed at any time. However, all applications, including those for new or amended coverage, are subject to a 30-day waiting period before commencement of coverage as specified in sections 3(d) and 9(a).
Standard nursery containers. Rigid containers not less than 1 inch in diameter at the widest point of the container interior (including trays that contain 200 or fewer individual cells, unless specifically provided by the Special Provisions), above-ground fabric grow bags, and other types of containers specified in the Special Provisions that are appropriate in size and provide adequate drainage for the plant. In-ground fabric grow bags, balled and burlapped, and trays (flats) without individual cells are not considered standard nursery containers.
Stock plants. Plants used solely for propagation during the insurance period.
Survival factor. A factor shown on the Special Provisions that specifies the expected percentage of liners that normally survive the period from insurance attachment to market.
Under-report factor. The factor that adjusts your indemnity for under-reporting of inventory values. The factor is always used in determining indemnities. For each basic unit, the under-report factor is the lesser of: (1) 1.000; or (2) the basic unit value, including a Peak Inventory Value Report during the coverage term of a Peak Inventory Endorsement, minus the total of all previous losses, as adjusted by any previous under-report factor, divided by field market value A. Payments made under the Rehabilitation Endorsement will not be considered a previous loss when calculating the under-report factor.
Wholesale. To sell nursery plants in large quantities at a price below that offered on low-quantity sales to retailers, commercial users, governmental end-users, or other end-users for business purposes (e.g. sales to landscape contractors and commercial fruit producers). This determination will be based on a county-by-county basis.
2. Unit Division
(a) If you elect additional coverage for a practice, a basic unit, as defined in section 1 of the Basic Provisions, may be divided into additional basic units by each insurable plant type designated in section 2(b) for which a premium rate is provided by the actuarial documents.
(b) Only the following plant types contained on the Eligible Plant List are insurable:
(1) Deciduous Trees (Shade and Flower);
(2) Broad-leaf Evergreen Trees;
(3) Coniferous Evergreen Trees;
(4) Fruit and Nut Trees;
(5) Deciduous Shrubs;
(6) Broad-leaf Evergreen Shrubs;
(7) Coniferous Evergreen Shrubs;
(8) Small Fruits;
(9) Herbaceous Perennials;
(10) Roses;
(11) Ground Cover and Vines;
(12) Annuals;
(13) Foliage;
(14) Palms and Cycads;
(15) Liners (container grown only and inclusive of all insurable plant types); and
(16) Other plant types listed in the Special Provisions.
3. Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities
(a) The production reporting requirements, including the misreporting provisions, contained in section 3 of the Basic Provisions are not applicable.
(b) In addition to the requirements of section 3 of the Basic Provisions, you may select either catastrophic risk protection or additional coverage for each insured practice. An administrative fee established in accordance with section 7(e) of the Basic Provisions will be owed for each practice insured.
(c) In lieu of section 3(b) of the Basic Provisions:
(1) If you select additional coverage for a practice:
(i) You may select one coverage level for each plant type insured in that practice if you elect basic units by plant type;
(ii) You will receive 100 percent of the price election for all plant types in that practice;
(iii) You must provide on the application a coverage level percentage for each plant type that will be insured; and
(iv) You must select a coverage level if:
(A) A new plant is added under a revised PIVR or Peak Inventory Endorsement; and
(B) The plant is not categorized under a plant type reported on the initial PIVR.
(2) If you select catastrophic risk protection for a practice, all plant types under the practice must be insured at the catastrophic risk protection level.
(d) In lieu of section 3(d) of the Basic Provisions, you may request changes to the coverage level for a plant type by submitting them in writing to us as follows:
(1) For new policies, changes cannot be made for the crop year after the date of the application; and
(2) For carryover policies:
(i) For the 2006 crop year only, changes must be requested on or before September 30th prior to the start of the crop year;
(ii) For all subsequent crop years, changes must be requested on or before the sales closing date; and
(iii) Unless we reject the proposed increase because a loss occurs within 30 days of the date the request is made (Rejection can occur at any time we discover such loss has occurred), requested changes will take effect:
(A) For the 2006 crop year, 30 days after the date you submitted your request; and
(B) For all subsequent crop years, on the date of the start of the crop year.
(e) Your amount of insurance will be reduced by the amount of any indemnity paid under this policy. For losses occurring when a Peak Inventory Endorsement is in effect, to determine the amount of insurance remaining after the loss you must subtract the amount of the indemnity from the peak amount of insurance, then subtract any remaining amount of indemnity from the amount of insurance.
(f) If you restock your nursery plant inventory, you may increase your amount of insurance in accordance with section 6(g).
4. Contract Changes
In accordance with section 4 of the Basic Provisions, the contract change date is January 31 of each crop year.
5. Cancellation and Termination Dates
In accordance with section 2 of the Basic Provisions, the cancellation and termination dates are May 31 preceding the crop year.
6. PIVR
(a) Section 6 of the Basic Provisions is not applicable.
(b) You must submit a PIVR for each insured practice, as applicable, and two copies of your most recent wholesale catalogs or price lists in accordance with subsection (k) to us with your application on or before the sales closing date for each crop year following the year of application.
(1) You will be notified in writing if an application for insurance is refused because the inventory or wholesale catalog or price list is not acceptable.
(2) If you fail to provide a PIVR or applicable catalog or price list on or before the sales closing date for any crop year, insurance will not attach until 30 days after all such documents have been received by your crop insurance agent and we will not be liable for any losses that occur before insurance has attached.
(c) The PIVR must include, by basic unit, all growing locations, basic unit value, coverage level selected, as applicable, and your share.
(1) If you do not elect additional basic units by plant type or you elect CAT coverage, the plant inventory values for each plant type in the basic unit must be separately reported on the PIVR and totaled to determine the basic unit value.
(2) At our option, you will be required to provide documentation in support of your PIVR, including, but not limited to, a detailed plant inventory listing that includes the name, the number, and the size of each plant; acceptable records of sales and purchases of plants for the three previous crop years in the amount of detail we require; and your ability to properly obtain and maintain nursery stock. Acceptable records must contain the name and telephone number of the purchaser or seller, as applicable, names of the plants, the number of each plant sold or purchased, and the sales price for each plant.
(3) Failure to provide documentation when requested or providing inadequate documentation will result in denial of insurance for the crop year for any basic units for which such documentation was not provided. This provision does not apply to:
(i) Plant varieties you have not previously grown; or
(ii) New nurseries where an inspection has determined you have the ability to properly obtain and maintain the nursery stock.
(d) Your PIVR, including any revised report, and your Peak Inventory Value Report will be used to determine your premium and amount of insurance.
(e) Your PIVR must reflect your insurable nursery plant inventory value by basic unit.
(1) The price for each plant and size listed on your PIVR will be the lower of the Plant Price Schedule price or the lowest wholesale price in your nursery catalog or price list submitted in accordance with section 6(k).
(2) In no instance will we be liable for plant values greater than those contained in the Plant Price Schedule.
(3) If you have previously made a claim and the loss adjuster is unable to determine whether a plant was damaged prior to submission of your PIVR for the current crop year, the plant will be insurable at full value based on the lesser of the Eligible Plant List price or the catalog or price list price. The value of the plant may be reduced at any time during the crop year if the extent of damage is discovered.
(f) For catastrophic level policies only, you must report, on the PIVR for each practice insured, your greatest plant sales in any of the previous 3 years and the actual inventory value on the date insurance attaches.
(1) You may be required to provide documentation to support the above reporting requirements. To be considered adequate, sales documents must contain the name and telephone number of the purchaser, names of the plants, the number of each plant sold, and the sales price for each plant.
(2) For each applicable practice, the total of your basic unit values cannot exceed 110 percent of the higher of your:
(i) Greatest amount of plant sales in any of the previous 3 years; or
(ii) Actual inventory value on the date insurance attaches.
(3) Failure to provide documentation when requested or providing inadequate documentation will result in denial of insurance for the crop year for any basic unit for which such documentation was not provided. This provision does not apply to:
(i) Plant varieties you have not previously grown; or
(ii) New nurseries where an inspection has determined you have the ability to properly obtain and maintain the nursery stock.
(g) You may increase your reported inventory value for each basic unit no more than twice during the crop year by submitting a revised PIVR prior to 30 days before the end of such crop year.
(1) Any requested increase must be made in writing and contain the same information as required in section 6(c). The limitations in section 3(d) regarding making changes to the coverage level after a specified date are not applicable to a revised PIVR that adds new plant types. The limitations continue to apply if plants are added for a specific plant type.
(2) An inspection will be performed when the total of all the basic unit values contained on the revised PIVRs is increased 50 percent or more from the previous total of all the basic unit values on the PIVR, and the increase is not due to restocking subsequent to an insured loss.
(3) At our discretion, we may inspect the inventory if an increase of less than 50 percent is reported on the revised PIVR.
(4) Your revised PIVR will be considered accepted by us and insurance will attach on any proposed increase in inventory value 30 days after your written request is received unless we reject the proposed increase in your plant inventory value in writing.
(5) We will reject any requested increase if a loss occurs within 30 days of the date the request is made.
(6) You cannot revise your PIVR to decrease the plant inventory value after the start of the insurance period specified in section 9.
(h) For insurable plants that were damaged prior to the attachment of insurance coverage:
(1) The applicable price, as determined in accordance with section 6(e), will be reduced for inventory reporting purposes if we accept such plants for insurance coverage;
(2) The plants will be removed from the PIVR if they are not accepted;
(3) The procedure for calculating the insurable value of damaged plants that are accepted for coverage is contained in the Special Provisions.
(i) You must report the full value of each basic unit value in accordance with section 6(e). Failure to report the full value of each basic unit value will result in the reduction of any claim in accordance with section 12(d).
(j) Insurable plants in over-sized containers will be valued for purposes of reporting inventory and loss adjustment as if the plants were in appropriate-sized containers in accordance with the standards contained in the current American Standard for Nursery Stock. Each cell in a multiple-cell container is considered a separate container. (See the Eligible Plant List at http://www.rma.usda.gov/ for additional information and requirements on container specifications and volume calculation.)
(k) At a minimum, your wholesale catalog or price list must:
(1) Be type-written and legible;
(2) Show an issue date on the cover page (may be handwritten);
(3) Contain the name, address, and phone number of your nursery;
(4) Be provided to customers and used in the sale of your plants; and
(5) List each plant's name (scientific or common), plant or container size, and wholesale price.
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, any premium adjustment factor, and the monthly proration factor contained in the actuarial documents, if applicable.
(b) In addition to the provisions in section 7 of the Basic Provisions, we will prorate your premium based on:
(1) The time remaining in the crop year after insurance attaches:
(i) If you have made application after the start of the insurance period specified in section 9; or
(ii) If you submit a PIVR or wholesale catalog or price list after the sales closing date;
(2) The time remaining in the crop year after insurance attaches and the additional amount of inventory reported, if you submit a revised PIVR to report an increase in inventory value for a basic unit; and
(3) The time period for which insurance is provided under the Peak Inventory Endorsement.
(c) If your premium is prorated, premium will be charged for the entire month for any calendar month during which any amount of coverage is provided under these provisions or the Peak Inventory Endorsement.
(d) In lieu of section 7(a) of the Basic Provisions:
(1) If you apply for insurance before April 1st, the annual premium is earned and payable at the time coverage begins. You will be billed for the premium and administrative fee not earlier than the premium billing date specified in the Special Provisions.
(2) If you apply for insurance, or submit your PIVR or wholesale catalog or price list, on or after April 1st, the premium for the partial crop year will be due and must be paid at the time of application.
(3) Failure to pay the premium at the time of application, or when you submit your PIVR or wholesale catalog or price list, will result in no insurance and no indemnity being owed for the crop year.
8. Insured Crop and Plants
In lieu of the provisions of sections 8 and 9 of the Basic Provisions, the crop insured will be all nursery plants and plant types in each practice, contained on the Eligible Price List, in which you have a share, that you elect to insure, and that:
(a) Are shown on the Eligible Plant List and meet all the requirements for insurability (plant types, species and cultivars not insurable under the eligible plant list may be insured by written agreement, subject to FCIC's determination that the proper storage requirements and an accurate insurable price for the plant can be determined, and provided all other requirements, such as plant and container size, are met);
(b) Are determined by us to be acceptable;
(c) Are grown in a county for which a premium rate is provided in the actuarial documents;
(d) Are grown in a nursery inspected by us and determined to be acceptable;
(e) Are irrigated unless otherwise provided by the Special Provisions (You must have adequate irrigation equipment and water to irrigate all insurable nursery plants at the time coverage begins and throughout the insurance period);
(f) Are grown in accordance with the production practices for which premium rates have been established;
(g) Are grown in an appropriate medium;
(h) Are not grown for sale as Christmas trees;
(i) Are not stock plants or plants being grown solely for harvest of buds, flowers, or greenery;
(j) May produce edible fruits or nuts provided the plants are made available for sale (Harvest of the edible fruit or nuts does not affect insurability); and
(k) Are not produced in nursery containers that contain two or more different genera, species, subspecies, varieties or cultivars.
9. Insurance Period
(a) In lieu of section 11 of the Basic Provisions:
(1) For the year of application, if you apply for coverage:
(i) On or before August 31, 2005, for the 2006 crop year, coverage begins on October 1, 2005, unless we notify you in writing that your inventory is not acceptable;
(ii) After August 31, 2005, and on or before May 1, 2006, for the 2006 crop year, or on or before May 1st of the crop year for any subsequent crop year, coverage begins 30 days after your crop insurance agent receives an application signed by you, unless we notify you in writing that your inventory is not acceptable;
(iii) After May 1, 2006, or after May 1st for any subsequent crop year, coverage will not begin until the next crop year, subject to the 30-day delay specified in subparagraph (ii); and
(2) For continuous policies:
(i) For the 2006 crop year, the insurance period begins on October 1, 2005.
(ii) For the 2007 crop year, the insurance period begins on June 1, 2006, and for each subsequent crop year, the insurance period begins on each June 1st.
(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) Removal of bare root nursery plant material from the field;
(3) Removal of all other insured plant material from the nursery; or
(4) 11:59 p.m. on May 31, 2006, for the 2006 crop year, and on May 31st for each subsequent crop year.
10. Causes of Loss
(a) In accordance with the provisions of section 12 of the Basic Provisions, insurance is provided for unavoidable damage caused only by the following causes of loss that occur within the insurance period:
(1) Adverse weather conditions, except as specified in section 10(c) or the Special Provisions;
(2) Fire, provided weeds and undergrowth in the vicinity of the plants or buildings on your insured site are controlled by chemical or mechanical means;
(3) Wildlife;
(4) Earthquake; or
(5) Volcanic eruption.
(b) Insurance is also provided against the following if due to a cause of loss specified in section 10(a) that occurs within the insurance period:
(1) A loss in plant values because of an inability to market such plants, provided such plants would have been marketed during the crop year (e.g. poinsettias that are not marketable during their usual and recognized marketing period of November 1st through December 25th);
(2) Failure of the irrigation water supply; or
(3) Failure of, or reduction in, the power supply.
(c) In addition to the causes of loss excluded in sections 12(a) and (c) through (f) of the Basic Provisions, we do not insure against any loss caused by:
(1) Disease or insect infestation, unless:
(i) A disease or insect infestation occurs for which no effective control measure exists; or
(ii) Coverage is specifically provided by the Special Provisions.
(2) The inability to market the nursery plants as a result of:
(i) The refusal of a buyer to accept production;
(ii) Boycott; or
(iii) An order from a public official prohibiting sales including, but not limited to, a stop sales order, quarantine, or phytosanitary restriction on sales;
(3) Cold temperatures, if cold protection is required in the eligible plant list, unless:
(i) You have installed adequate cold protection equipment or facilities and there is a failure or breakdown of the cold protection equipment or facilities resulting from an insurable cause of loss specified in section 10(a) (the insured plants must be damaged by cold temperatures and the damage must occur within 72 hours of the failure of such equipment or facilities unless we establish that repair or replacement was not possible between the time of failure or breakdown and the time the damaging temperatures occurred); or
(ii) The lowest temperature or its duration exceeded the ability of the required cold protection equipment to keep the insured plants from sustaining cold damage;
(4) Collapse or failure of buildings or structures, unless the damage to the building or structures results from a cause of loss specified in section 10(a);
(5) Any cause of loss, including those specified in section 10(a), if the only damage suffered is a failure of plants to grow to an expected size; or
(6) In lieu of section 12(b) of the Basic Provisions, failure to follow recognized good nursery practices.
11. Duties in the Event of Damage or Loss
(a) In addition to your duties contained in section 14 of the Basic Provisions,
(1) You must obtain our written consent prior to:
(i) Destroying, selling or otherwise disposing of any plant inventory that is damaged; or
(ii) Changing or discontinuing your normal growing practices with respect to care and maintenance of the insured plants.
(2) You must submit a claim for indemnity to us on our form, not later than 60 days after the date of your loss, but in no event later than 60 days after the end of the insurance period. This requirement will be waived by us if the final adjustment of your claim is totally or partially deferred because we are unable to make an accurate determination of the amount of damage to the insured plants. If within the time frame specified we notify you that we are unable to make an accurate determination of damage on all or some of your damaged plants:
(i) For those damaged plants on which the loss adjustment and claim have not been deferred, you must submit a partial claim within the time frame specified in section 11(a)(2) and we will settle your claim on such plants;
(ii) For those damaged plants on which the loss adjustment and claim have been deferred, we will determine the amount of damage at the earliest possible date but no later than one year after the end of the insurance period for the crop year in which the damage occurred; and
(iii) You must maintain the identity of the plants on which loss adjustment is deferred throughout the deferral period.
(b) Failure to obtain our written consent as required by section 11(a)(1) will result in the denial of your claim.
12. 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 field market value B from field market value A;
(d) Multiply the result of 12(c) by the under-report factor;
(e) Subtract the occurrence deductible from the result in section 12(d); and
(f) If the result of section 12(e) is greater than zero, and subject to the limit of section 12(g);
(1) For other than catastrophic risk protection coverage, your indemnity equals the result of section 12(e), multiplied by your share.
(2) For catastrophic risk protection coverage, your indemnity equals the result of section 12(e) multiplied by fifty-five percent, multiplied by your share.
(g) The total of all indemnities for the crop year will not exceed the amount of insurance, including any peak amount of insurance during the coverage term of the Peak Inventory Endorsement, if this endorsement is elected.
13. Late and Prevented Planting
The late and prevented planting provisions in the Basic Provisions are not applicable.
14. Written Agreements
(a) In lieu of section 18(a) of the Basic Provisions, you must request in writing a written agreement with the application for the initial crop year, and not later than the cancellation date for each subsequent crop year, except as provided in section 14(c).
(b) In lieu of the requirements of section 18(d) of the Basic Provisions, any written agreement is valid only until the end of the insurance period for the crop year such written agreement applies; and
(c) In lieu of section 18(e) of the Basic Provisions, an application for a written agreement submitted after the date of application for the initial crop year and the cancellation date for all subsequent crop years may be approved if:
(1) You demonstrate your physical inability to have applied timely; and
(2) After physical examination of the nursery plant inventory, we determine the inventory will be marketable at the value shown on the PIVR.
15. Examples
Single Unit Example
Assume you have a 100 percent share and the plant inventory value reported by you is $100,000, and your coverage level is 75 percent. Your amount of insurance is $75,000 ($100,000 × .75). At the time of loss, field market value A is $125,000, and field market value B is $80,000. The under-report factor is .80 ($100,000 divided by $125,000). The deductible percentage is 25 percent (100 − 75), the crop year deductible is $25,000 (.25 × $100,000) and the occurrence deductible is $25,000 (.25 × $125,000 × .80). Your indemnity would be calculated as follows:
Step (1) Determine the under-report factor $100,000 ÷ $125,000 = .80;
Step (2) Field market value A minus field market value B $125,000 − $80,000 = $45,000;
Step (3) The result of step (2) multiplied by the result of step (1) $45,000 × .80 = $36,000;
Step (4) The result of step (3) minus the occurrence deductible $36,000 − $25,000 = $11,000; and
Step (5) Result of step (4) multiplied by your share $11,000 × 1.000 = $11,000 indemnity payment.
Peak Inventory Value Report Example
Assume you have a second loss on the same basic unit. Your amount of insurance has been reduced by subtracting your previous indemnity payment of $11,000 from your amount of insurance ($75,000 − $11,000 = $64,000). Your crop year deductible has been reduced to zero by the previous loss ($25,000 − $36,000, but not less than zero). You purchase a Peak Inventory Endorsement and report $60,000 in inventory. Your peak amount of insurance is your reported inventory times your coverage level ($60,000 × .75 = $45,000). The combined amount of insurance for the coverage term of the peak endorsement is $64,000 $45,000 = $109,000. Your crop year deductible is increased by $15,000 ($60,000 × .25). At the time of loss, field market value A is $124,000, and field market value B is $58,000. The under-report factor is 1.00 [($160,000 − $36,000)/$124,000]. The crop year deductible is $15,000 (.25 × $60,000) and the occurrence deductible is $15,000 (the lesser of field market value A × .25 or the crop year deductible). Your indemnity would be calculated as follows:
Step (1) Determine the under-report factor $160,000 − $36,000) ÷ $124,000 = 1.00;
Step (2) Field market value A minus field market value B $124,000 − $58,000 = $66,000;
Step (3) The result of step (2) multiplied by the result of step (1) $66,000 × 1.0 = $66,000;
Step (4) The result of step (3) minus the occurrence deductible $66,000 − $15,000 = $51,000; and
Step (5) Result of step (4) multiplied by your share $51,000 × 1.000 = $51,000 indemnity payment.
Your peak amount of insurance is reduced to zero. Your amount of insurance is reduced by the amount the indemnity exceeds the peak amount of insurance. $64,000 − ($51,000 − 45,000) = $64,000 − $6,000 = $58,000.
[63 FR 50975, Sept. 24, 1998; 63 FR 57046, Oct. 26, 1998, as amended at 70 37241, June 28, 2005; 71 FR 74456, Dec. 12, 2006]

Title 7 published on 2014-01-01

The following are only the Rules published in the Federal Register after the published date of Title 7.

For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2014-01-13; vol. 79 # 8 - Monday, January 13, 2014
    1. 79 FR 2075 - General Administrative Regulations; Mutual Consent Cancellation; Food Security Act of 1985, Implementation; Denial of Benefits; and Ineligibility for Programs Under the Federal Crop Insurance Act
      GPO FDSys XML | Text
      DEPARTMENT OF AGRICULTURE, Federal Crop Insurance Corporation
      Final rule.
      Effective date: This rule is effective February 12, 2014. Applicability date: The changes will apply for the 2015 and succeeding crop years for all crops with a contract change date after February 12, 2014.
      7 CFR Parts 400, 407 and 457

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United States Code
U.S. Code: Title 7 - AGRICULTURE

Title 7 published on 2014-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 7 CFR 457 after this date.

  • 2014-04-11; vol. 79 # 70 - Friday, April 11, 2014
    1. 79 FR 20110 - Common Crop Insurance Regulations; Pear Crop Provisions
      GPO FDSys XML | Text
      DEPARTMENT OF AGRICULTURE, Federal Crop Insurance Corporation
      Proposed rule.
      Written comments and opinions on this proposed rule will be accepted until close of business May 12, 2014 and will be considered when the rule is to be made final.
      7 CFR Part 457