On April 10, 2020, the Risk Management Agency (RMA) issued Managers Bulletin: MGR-20-009, which provides additional relief from crop insurance deadlines as a result of the stay-at-home orders in place in most states. https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/MGR-20-009. RMA cites to the problems with the ability of agents to meet with producers to obtain signatures associated with various reporting requirements, written agreements, purchases of new coverage or adjustments current policy elections. RMA states that MGR-20-009 complements the flexibility provided in MGR-20-005 and MGR-20-006. RMA states that it remains committed to provide flexibility that supports the health and safety of all program participants while ensuring crop insurance continues to serve as a vital risk management tool.
RMA states that for all sales and reporting deadlines for crops with sales closing dates prior to July 15, 220, policyholders can send notifications electronically, over the phone with documentation of the call, or other electronic means to select policy elections. RMA states that reports, including policy elections, must include an electronic signature or follow up with a properly signed form no later than July 15, 2020. The policyholders agrees to be bound by their initial certification and cannot make changes, other than those authorized by RMA procedure, after the applicable deadlines.
RMA states that policyholders must select various options and endorsements, and complete forms by sales closing, production reporting, or acreage reporting deadlines to participate in the Federal crop insurance program, such as a Producer’s Pre-Acceptance Worksheet or the Nursery Plant Inventory Value Report. For carryover policyholders, most options and endorsements are continuous, meaning unless a policyholder requests modification, they remain in effect. New policyholders may wish to select from available options in discussion with their agent. RMA states that for reporting deadlines for options, endorsements, and forms with deadlines prior to July 15, 2020, notifications may be sent electronically, over the phone with appropriate documentation of the call or using electronic methods to select options and endorsements occurring for the sales closing, production reporting and acreage reporting deadlines. RMA states that if the policyholder sends their elections in such a manner, they will be required to either sign digitally at the time of submission or must follow up with a properly signed forms) no later than July 15, 2020. The policyholder agrees to be bound by their initial certification and cannot make changes after the applicable deadline other than those authorized by RMA procedure.
RMA states that the Perennial Crop Pre-Acceptance Inspection Report (PAIR) is an underwriting tool used by the approved insurance providers (AIPs) to establish insurability of the crop or adjust coverage, as authorized by the policy. Additionally, PAIRs verify information provided by the policyholder on the pre-acceptance worksheet. RMA states that the pre-acceptance worksheet is a policyholder’s self-certification of the planting and other conditions of the perennial crop. RMA states that AIPs are authorized to accept pre-acceptance worksheets using authority provided under Reporting Deadline for Options, Endorsements and Forms for Applicable Crop Years with Deadlines prior to July 15,2020, shown above.
RMA stated that several PAIR deadlines are upcoming for multiple crop years, and the following relief and flexibility is granted:
Florida Citrus Fruit Dollar & Florida Fruit Tree Programs: The sales closing date is April 15, 2020, with PAIRs required by June 14, 2020. Although many AIPs indicated most inspections are occurring, some situations may warrant an extension of time to complete the inspections. To provide AIPs additional flexibility, the PAIR deadline is extended until July 15, 2020.
New Apple Tree Program: The sales closing date is April 15, 2020. AIPs are authorized to accept PAWs through May 15, 2020. PAIRs, including a trellis inspection, are also required for new insureds. AIPs must ensure PAIRs are conducted for any appropriate insurability determinations in advance of the date insurance attaches, July 1, 2020.
Pecan Tree Program: The sales closing date is May 15, 2020. PAWs are due from new and carryover policyholder’s by May 15, 2020. AIPs must ensure PAIRs are conducted for any appropriate insurability determinations in advance of the date insurance attaches, July 1, 2020.
All Other Applicable Policies: PAIRs are required when changes occur to carryover policies or for new policyholders when required by the applicable policy to adjust coverage. Examples may include changes such as: irrigation changes, substantial grafting, prior damage, etc. These may also require a Determined Yield Request be submitted to the applicable RMA Regional Office.
For Category C Actual Production History (APH) crops and Pecan Revenue, PAIRs with a deadline due on or before May 30, 2020, AIP have an additional 30 calendar days to complete the necessary PAIRs.
When situations unique to an area impact Regional Office Determined Yield Requests or other PAIR extensions, the applicable RMA Regional Office will continue to issue Underwriting Guidelines on a regional basis. An example is a request to provide coverage to an underage perennial crop. RMA’s Regional Offices can be found at: www.rma.usda.gov/RMALocal/Field-Offices/Regional-Offices
RMA states that the Nursery program continues to be available for the 2021 crop year with a sales closing date of May 1, 2020, and insurance attaches June 1 under the terms of the policy. Nursery Value Select (NVS) is a new program for the 2021 crop year, which will be offered in select counties alongside the existing Nursery program. In certain counties, NVS also has a sales closing date of May 1, 2020, and insurance attaches June 1 under the terms of the policy. Both policies require inspections be conducted in May for insurance to begin as scheduled on June 1.
RMA is authorizing AIPs to defer the 2021 crop year inspection until the subsequent crop year for the Nursery and NVS programs when an inspection report exists in the policyholder’s file applicable to Nursery Crop Provisions for the 2017, 2018, 2019 or 2020 crop years. RMA states that Hurricane Irma caused significant damage during the 2018 crop year so AIPs must ensure that any 2018 inspection used for 2021 appropriately accounts for the damage caused by Hurricane Irma that did not recover before the beginning of the 2019 crop year.
RMA states that if a written agreement offer with an issuance date during the time period of March 15, 2020, to May 30, 2020 is provided to the producer, but the producer fails to sign the offer by the expiration date identified on the offer, a producer signature after the expiration date will be accepted. If the producer accepts the written agreement offer, the producer must still sign and date in the acceptance area of the offer no later than July 15, 2020.
RMA states that if the signature and date are executed after the expiration date of the written agreement offer, the producer must provide a self-certification, or other documentation, showing that COVID-19 caused a physical inability to sign the offer by the expiration date. This self-certification, or other documentation, must include a brief explanation of the circumstances surrounding the situation (such as, producer was quarantined, agent offices were closed, “stay-at-home” order issued, etc.) and must be included with the signed and accepted written agreement offer when returned to RMA.
Any written agreement offers with an issuance date after May 30, 2020, must be signed by the expiration date identified in the written agreement offer and follow the procedures provided in the 2020 Written Agreement Handbook for submission to RMA.
ANALYSIS – RMA is continuing its trend to relax reporting to allow remote reporting and signatures to allow participants to comply with the stay-at-home orders and social distancing. Given the uncertainty when these orders may be lifted, RMA actions seem reasonable and prudent. RMA has also extended the deadlines to conduct inspections and insurability determinations to allow AIPs to safely conduct the needed work. Again, given the circumstances, RMA’s actions seem reasonable.
RMA is allowing AIPs to skip inspections for nursery policies for the 2021 crop year as long as the producer has an inspection for the 2017, 2018, 2019, or 2020 crop year. Stay-at-home and social distancing impact the ability to conduct such inspections but given the changing nature of nursery and the nursery policy it is not clear that an inspection conducted four years previously or in the year of a hurricane would be reflective of the current conditions, value, and inventory of the nursery.
With respect to written agreements, RMA is allowing execution of written agreement offers with a March 15, 2020 to May 30, 2020 issuance date after the deadline if the producer can self-certify or provide other evidence the producer was unable to sign by the deadline, such as quarantine, stay-at-home, etc. Again, given the circumstances, RMA’s actions seem reasonable.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.