On June 9, 2020, the Risk Management Agency (RMA) issued a Product Management Bulletin: PM-20-035 and a National Press Release announcing changes made to the Livestock Risk Protection policies for Feeder Cattle, Fed Cattle, and Swine effective for the 2021 and succeeding years. https://www.rma.usda.gov/Policy-and-Procedure/Bulletins-and-Memos/2020/PM-20-035; https://www.rma.usda.gov/News-Room/Press/Press-Releases/2020-News/USDA-Announces-Improvements-to-the-Livestock-Risk-Protection-Insurance-Program-This-Summer. On June 26, 2020, RMA also issued Product Management Bulletin: PM-20-042, the Livestock Risk Protection Policy, the National Fact Sheet, and the Underwriting Rules. https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/PM-20-042; https://www.rma.usda.gov/-/media/RMAweb/Policies/Livestock-Risk-Protection/2021/LRP-Policy.ashx; https://www.rma.usda.gov/en/Fact-Sheets/National-Fact-Sheets/Livestock-Risk-Protection-Feeder-Cattle; https://www.rma.usda.gov/Fact-Sheets/National-Fact-Sheets/Livestock-Risk-Protection-Fed-Cattle; https://www.rma.usda.gov/-/media/RMAweb/Policies/Livestock-Risk-Protection-Fed-Cattle/2021/LRP-Fed-Cattle-Underwriting-Rules.ashx; https://www.rma.usda.gov/-/media/RMAweb/Policies/Livestock-Risk-Protection-Feeder-Cattle/2021/LRP-Feeder-Cattle-Underwriting-Rules.ashx.
RMA states that the Federal Crop Insurance Corporation Board of Directors approved the changes on May 21, 2020. The changes include:
- Allow premium to be paid at the end of the endorsement period; and
- Increase premium subsidy for coverage levels above 80 percent by 5 percentage points.
The changes are implemented on July 1, 2020.
ANALYSIS – The changes made are consistent with other policies and plans of insurance. Most plans of insurance allow the premium to be paid toward the end of the insurance period. In the past, LRP required the payment of premium at the time of purchase. The 2021 LRP policy has been revised to allow for a different premium billing date to be contained in the actuarial documents. In addition, while the subsidy levels have been increased for coverage levels of 80 percent or above, they still remain less than the maximum allowed by law. With respect to the National Fact Sheets, these documents only provide minimal information. It is recommended that all interested parties review the actual policy when determining the terms and conditions of insurance.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.