On March 27, 2020, the Risk Management Agency (RMA) issued a number of documents related to the effects COVID-19 is having on crop insurance and its mitigation responses. https://www.rma.usda.gov/en/News-Room/Press/Press-Releases/2020-News/USDA-Adds-Flexibilities-for-Crop-Insurance-to-Support-Americas-Farmers-and-Ranchers; https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/MGR-20-007; https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/MGR-20-005; https://www.rma.usda.gov/en/Policy-and-Procedure/Bulletins-and-Memos/2020/MGR-20-006.
RMA has recognized that many states have issued stay-at-home orders, which impacts the contacts between the agent and producer. In response, RMA states that recognizes the challenges the crop insurance industry and America’s producers face and will provide flexibility that supports the health and safety of all parties, while also ensuring the Federal crop insurance program continues to serve as a vital risk management tool. To effectuate this goal, RMA announced that producers may send notifications and reports electronically for written agreement issues, acreage and production reporting and upcoming sales closing dates (deadlines to buy crop insurance). Notice of the producer’s election may be provided over the phone with appropriate documentation of the call or using electronic methods followed by their confirmation of such election in writing (a signed, or e-signed, form) no later than July 15, 2020.
RMA announced that for the 2020 crop year, approved insurance providers (AIPs) may accept production reports through the earlier of the acreage reporting date or 30 days after the production reporting date for crops insured under the Common Crop Insurance Policy Basic Provisions (Basic Provisions) with a production reporting date of March 15, 2020, or later. Generally, the production for crops insured under the Common Crop Insurance Policy Basic Provisions is the earlier of the acreage reporting date or 45 days after the cancellation date.
RMA also announced that AIPs are authorized to provide additional time for producers to make payment of premium and administrative fees. Interest accrual on premium payments and administrative fees will be waived to the earliest of an additional 60 days from the scheduled payment due date or the termination date on policies with premium billing dates between March 1, 2020, and April 30, 2020. AIPs are also authorized to provide additional time for producers to make payment for written payment agreements due between March 1, 2020, and April 30, 2020. Payments may be extended up to 60 days from the scheduled payment due date and considered a timely payment.
Further, RMA announced that, in accordance with section 18(e)(1) of the 2020 Basic Provisions, AIPs are reminded that producers may be able to submit a request for a written agreement after the sales closing date, but on or before the acreage reporting date, if they are able to demonstrate, including self-certification of COVID-19 related issues, the physical inability to submit the request (or required additional documentation) on or before the sales closing date.
In accordance with Para. 23 A (2) & (3) of the 2020 Written Agreement Handbook, RMA granted AIPs additional time to submit Written Agreement Requests and applicable documentation into the RMA Regional Office Exception system. Only Written Agreement Requests that have a cancellation date deadline or sales closing date deadline from the time
period of March 15, 2020, to April 15, 2020, are receiving additional time. For these requests, AIPs have until 30 days after the applicable producer submission deadline to submit the Request for Actuarial Change form and all applicable documentation into the RMA Regional Office exception system. Written Agreement Requests with deadlines not mentioned above will continue to follow the submission requirements and deadlines in accordance with the 2020 Written Agreement Handbook.
RMA also announced that notifications may be sent electronically between the policyholder and their AIP. Given the short time period, policyholders may provide information over the phone with appropriate documentation of the call or using electronic methods to select policy elections, such as coverage levels, and for the purpose of reporting acreage and production. If the policyholder sends their reports, including policy elections, in such a matter, they will be required to either sign digitally at the time of submission or must follow up with a properly signed form(s) no later than July 15, 2020. The policyholder agrees to be bound by their certifications based on their initial certification and cannot make changes, other than those authorized by RMA procedure for AIPs, after the applicable deadlines.
ANALYSIS – COVID-19 is an unprecedented event that has never occurred with such a large magnitude in the history of the United States. Crop insurance is not immune to its effects. RMA has always stated that impossibility is a defense to the enforceability of its policy and procedures. That impossibility defense arguably applies here where the circumstances are far beyond the control of RMA and the program participants. No one knows when the circumstances will change and there can be business as usual. That may never happen. In times like these RMA must be commended for providing the flexibility to put personal safety first.
All statements made are opinions of the author and are not intended to provide legal opinions or legal advice.