BULLETIN NO.: MGR-95-010

TO:       All Reinsured Companies
          CFSA Headquarters, Program Delivery, Field Operations
          All Risk Management Field Offices

FROM:     Kenneth D. Ackerman
          Acting Deputy Administrator

SUBJECT:  Insured's Signature on Acreage Reports


BACKGROUND:

On October 12, 1994, the Federal Crop Insurance Corporation (FCIC) issued an
INFORMATIONAL MEMORANDUM requiring all acreage reports for the 1995 crop year 
to be signed by the insured or the insured's authorized representative.  The 
General Administrative Regulations, Subpart T, 400.653(d) published January 
6, 1995, provided that the insured must file a signed acreage report on or 
before the acreage reporting date.

ACTION:

An insured is statutorily required to report acreage planted and prevented 
from being planted for both the Federal crop insurance program and the 
Noninsured Crop Disaster Assistance program.  As a matter of policy, insureds 
have always been required to file an acreage report in order to compute the 
premium.  The requirement that the insured, or an authorized representative 
sign the acreage report is not new, nor is the practice of accepting acreage 
reports over the phone legally permissible.  Since acreage reports are an 
integral part of the insurance contract, the Office of General Counsel has 
consistently advised FCIC that, as a matter of contract law, these documents 
must be signed by the insured or an authorized representative.

The acreage report is the document upon which the premium is based.  The 
information contained therein is binding on both parties to the contract, the 
insured and the insurer (company or FCIC).  The acreage report also contains 
a certification to the veracity of the information contained therein and 
failure to report accurate information on this document could subject the
insured to criminal and civil penalties.  Therefore, this document must be 
signed by the insured or an authorized representative (authorized by a 
properly executed power of attorney) to have a fully executed contract of 
insurance.  For catastrophic risk protection policies, the operator may sign.  
FCIC will amend the catastrophic risk protection regulations to provide 
notice to any other persons with an interest in the policy that the acreage 
report may be signed by the operator and that they will be bound by all 
statements on that signed acreage report.

In cases where acreage reports are not submitted, failure to timely report 
acreage is a breach of the policy provisions.  When the insured fails to 
timely submit an acreage report, the policy has a provision that permits the 
insurance provider to determine the insurable acreage, share, type or 
practice, or to deny coverage.  This provision was included to avoid adverse 
selection by permitting the company to "zero" acreage when there was a loss, 
or the acreage was damaged.  This provision also permitted the insurance 
provider to assign acreage in years where there was no loss to require the 
insured to pay the premium.

The insurance provider has the authority to determine the acreage as long as 
it is clear on the acreage report that the acreage was determined by the 
insurance provider and a representative of the insurance provider signs his 
or her own name, not the insured.  However, since the insurance provider can 
only determine acreage if the insured violates the provisions of the policy 
and fails to submit an acreage report, the insured has breached the insurance 
contract and the policy may be terminated for the next crop year.  

If the insurance provider accepts an acreage report that is not signed, or is 
taken by the telephone,  it will be considered reinsured by  FCIC; however, 
FCIC can not support the insurance provider in any dispute arising from the 
information contained in or derived from the acreage report because it has no 
way to determine the source or veracity of the information.  If the dispute 
results in litigation, FCIC will not reimburse litigation expenses and will 
not reinsure indemnities resulting from the disputed information.