Final Agency Determination: FAD-005
Subject: The Raisin Crop Insurance
Provisions, 7 C.F.R. § 457.124, subparts 9 and 10.
On February 8, 2001, the Risk Management Agency was asked for
a final agency determination concerning the Raisin Crop Insurance
Provisions for the 2000 crop year. Readers may access subparts
9 and 10 of §457.124 on RMA's web site to review policy language
for which interpretation was requested.
Final Agency Determination
Approved insurance providers must honor the published insurance
policy language contained in 7 C.F.R. § 457.124 and must
determine whether damage is due to an "unavoidable loss
of production resulting from rain that occurs during the insurance
period and while the raisins are on trays or in rolls in the
vineyard for drying" irrespective of whether FCIC's Product
Development Division and Insurance Services authorizes insurance
providers to allow additional time for harvest because of insurable
perils (listed in the policy) delaying or preventing harvest
of the crop under FCIC-25010-2 §79(A).
It is the final agency determination that the terms of the
policy published at 7 C.F.R. § 457.124 are binding on the
reinsured company, the insured, and the Federal Crop Insurance
Corporation (FCIC). While sections V.G.2.g and V.H of the Standard
Reinsurance Agreement require the reinsured companies to comply
with FCIC's loss adjustment procedures, there is an apparent conflict
between the terms of the policy and the loss adjustment procedures.
It is the final agency determination that when such conflicts
occur, the terms of the policy control.
In accordance with 7 C.F.R. § 400.765(c), this constitutes
the final agency determination and is binding on all participants
in the Federal crop insurance program.
Date of Issue: May 9, 2001