The Risk Management Agency (RMA) issued Informational Memorandum: COM-19-003 regarding Apiculture Crop Provisions lease requirements. Section 4(c) of the Rainfall Index Apiculture Crop Provisions states that to be insured the colonies must be located on acreage owned or leased by the insured. The policy defines “lease” as a written documents granting the use or occupation of property for a specified compensation, during a specified time period. RMA has found instances where policyholders do not have a lease and since the insurance is based on the selected grid physically located within the owned or lease acreage, RMA has no assurances the policyholder is eligible to insure the selected grid. RMA states that AIPs and agents should remind policyholders that acreage not owned by the policyholder must have a contemporaneous lease in place.
ANALYSIS – Interestingly the memorandum does not specify that if there is no contemporaneous lease for acreage the colony is not insured. Further, it is unclear by what date the lease must be obtained or reported. There is nothing in the Rainfall and Vegetation Index Plan of Insurance Basic Provisions or the Rainfall Index Apiculture Crop Provisions that states a date by which a lease must be obtained or provided to the agent. RMA refers to “contemporaneous lease” which presumably means it has to at least be in effect for the insured index intervals but that is not clear.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.