INFORMATIONAL MEMORANDUM: R&D-95-006 TO: All Reinsured Companies CFSA Headquarters, State and County Offices All Risk Management Field Offices FROM: Tim B. Witt /s/ TIM B. WITT 02/03/95 Acting Director Research and Development Division SUBJECT: Clarification of Appropriate 1995 Crop Year Cancellation and Termination Dates for the Coarse Grains, Cotton, and ELS Cotton Crop Provisions ISSUES: 1. Impact of sales closing date changes required by the Federal Crop Insurance Reform Act of 1994 (Act) on cancellation and termination dates for all spring planted crops for the 1995 crop year. 2. Final dates by which corn, soybeans, grain sorghum, cotton, and ELS cotton policies may be canceled or terminated for the 1995 crop year. 3. Final dates by which policyholders may transfer their coverage to a different insurance provider, or by which an insured with a reinsured company may change their coverage levels and price elections, for corn, soybeans, grain sorghum, cotton, and ELS cotton for the 1995 crop year. BACKGROUND: The Act requires sales closing dates for all spring planted crops for the 1995 crop year to be 30 days earlier than those established for the 1994 crop year. The sales closing dates contained in the special provisions for the 1995 crop year comply with the Act. The sales closing date changes required by the Act have resulted in 1995 crop year sales closing dates that are earlier than the dates by which the 1994 spring planted crop policies may be canceled or terminated for the 1995 crop year. This is because the date by which a policy may be canceled or terminated for the 1995 crop year is contained in the crop insurance policy in effect for the 1994 crop year. These cancellation and termination dates cannot be changed until the crop insurance policies are rewritten. As crop provisions are rewritten under the common crop insurance policy, the cancellation and termination dates will be revised to match the earlier sales closing dates. New common crop insurance policy crop provisions were issued for coarse grains, cotton, ELS cotton, and sunflower seed for the 1995 crop year. The cancellation and termination dates were changed in these new crop provisions. However, these dates apply to when the 1995 crop year policy may be canceled or terminated for the 1996 crop year. The 1995 crop year special provisions are structured to list the date by which a policy may be canceled for the 1995 crop year and the date by which a policy will be terminated for the 1996 crop year. The cancellation and termination dates contained in the 1995 special provisions are correct for sunflower seed. However, many cancellation and termination dates contained in the 1995 special provisions for corn, grain sorghum, soybeans, cotton, and ELS cotton are inconsistent with the dates contained in the applicable crop insurance policy. ACTION: All corn, soybean, grain sorghum, cotton, and ELS cotton policyholders will have until the cancellation dates specified in the applicable crop insurance policies in effect for the 1994 crop year to cancel for the 1995 crop year, regardless of the cancellation date contained in the 1995 special provisions. Attached for your convenience are the cancellation dates contained in the 1994 crop insurance policies. Policyholders insured with a reinsured company, whose policies specify that coverage levels and price elections may be changed on or before the cancellation date shown on the State Endorsement, will have until the cancellation date specified in the State Endorsement that was in effect for the 1994 crop year to change coverage levels and price elections for the 1995 crop year, regardless of the cancellation date contained in the 1995 special provisions. For the purpose of transferring a policy to a different insurance provider for the 1995 crop year, the cancellation request must be signed by the insured on or before the cancellation date specified in the 1994 crop insurance policy, regardless of the cancellation date contained in the 1995 special provisions. However, the application for insurance with the receiving company must be signed by the applicable 1995 sales closing date. For the purpose of determining the production reporting date for the 1995 crop year, the cancellation date reference will apply to the cancellation date specified in the 1994 crop insurance policy, regardless of the cancellation date contained in the 1995 special provisions. All corn, soybean, grain sorghum, cotton, and ELS cotton policies with delinquent debts will be terminated for the 1995 crop year in accordance with the termination dates contained in the applicable crop insurance policies in effect for the 1994 crop year. Policies for these crops will be terminated for the 1996 crop year in accordance with the termination dates contained in the 1995 special provisions, regardless of the termination date contained in the 1995 crop provisions. This is in accordance with the common crop insurance policy documents that specify if a conflict exists between the crop provisions and the special provisions, the special provisions will control. Attachment ----------------------------------------------------------------------------- FINAL DATES BY WHICH THE 1994 POLICY MAY BE CANCELLED FOR THE 1995 CROP YEAR CORN AND GRAIN SORGHUM State and County Cancellation Date Val Verde, Edwards, Kerr, Kendall, Bexar,..............February 15 Wilson, Karnes, Goliad, Victoria, and Jackson Counties, Texas, and all Texas counties lying south thereof Alabama; Arizona; Arkansas; California; Florida;.......March 31 Georgia; Louisiana; Mississippi; Nevada; North Carolina; and South Carolina El Paso, Hudspeth, Culberson, Reeves, Loving,..........March 31 Winkler, Ector, Upton, Reagan, Sterling, Coke, Tom Green, Concho, McCulloch,San Saba, Mills, Hamilton, Bosque, Johnson, Tarrant, Wise, Cooke Counties, Texas, and all Texas Counties lying south and east thereof to and including Terrell, Crockett, Sutton, Kimble, Gillespie, Blanco, Comal, Guadalupe, Gonzales, De Witt, Lavaca, Colorado, Wharton, and Matagorda Counties, Texas All other Texas counties and all other states..........April 15 ----------------------------------------------------------------------------- SOYBEANS Jackson, Victoria, Goliad, Bee, Live Oak,..............February 15 McMullen, Lasalle, and Dimmit Counties, Texas, and all Texas counties lying south thereof Alabama; Arizona; Arkansas; California;................March 31 Florida; Georgia; Louisiana; Mississippi; Nevada; North Carolina; South Carolina; and El Paso, Hudspeth, Culberson, Reeves, Loving, Winkler, Ector, Upton, Reagan, Sterling, Coke, Tom Green, Concho, McCulloch, San Saba, Mills, Hamilton, Bosque, Johnson, Tarrant, Wise, Cooke Counties, Texas, and all Texas counties lying south and east thereof to and including Maverick, Zavala, Frio, Atascosa, Karnes, De Witt, Lavaca, Colorado, Wharton, and Matagorda Counties, Texas All other Texas counties and all other states..........April 15 ----------------------------------------------------------------------------- COTTON Val Verde, Edwards, Kerr, Kendall, Bexar,..............February 15 Wilson, Karnes, Goliad, Victoria, and Jackson Counties, Texas, and all Texas counties lying south thereof Alabama; Arizona; Arkansas; California;................March 31 Florida; Georgia; Louisiana; Mississippi; Nevada; North Carolina; South Carolina; and El Paso, Hudspeth, Culberson, Reeves, Loving, Winkler, Ector, Upton, Reagan, Sterling, Coke, Tom Green, Concho, McCulloch, San Saba, Mills, Hamilton, Bosque, Johnson, Tarrant, Wise, Cooke Counties, Texas, and all Texas counties lying south and east thereof to and including Terrell, Crocket, Sutton, Kimble, Gillespie, Blanco, Comal, Guadalupe, Gonzales, De Witt, Lavaca, Colorado, Wharton, and Matagorda Counties, Texas All other Texas counties and all other states..........April 15 ----------------------------------------------------------------------------- ELS COTTON New Mexico.............................................April 15 All other states.......................................March 31