October 24, 1997
     
    
INFORMATIONAL MEMORANDUM:  R&D-97-076
     
TO:       All Reinsured Companies
          All Risk Management Field Offices
     
FROM:     Tim B. Witt       /s/ Tim B. Witt
          Deputy Administrator
      
SUBJECT:  Macadamia Tree Appraisals
     
     
BACKGROUND:
     
The Rate Classification and Amount of Insuurance per acre for macadamia
trees are determined by the age of the trees.  The County Actuarial
Tables show rate classifications for age of trees:  D01 (1-year-old
trees) through D09 (9+ year-old trees).  Because growers must
periodically replace trees, a given unit or plot may contain trees from
several different age groups.  The grower may have records of the number
of replacement trees and their planting dates, but generally will not
have a plat map showing the actual location and age of the individual
trees.
     
As the adjuster selects sample trees for an appraisal (see Section 11 of
the Macadamia Tree Loss Adjustment Standards Handbook), it becomes
difficult to determine the age of the tree selected.  The Macadamia Tree
Appraisal Worksheet requests "Year Setout" obtained from the acreage
report.  If the acreage being appraised contains more than one age group
and the trees cannot be separated into subfields by age of the tree,
then this entry may not be representative of the unit or plot being
appraised.
     
          Example:  Planting Pattern For the Plot or Unit
     
          #    (X)  @    X    (X)  X    @    X    #    X
     
          X    X    #    X    #    X    X    (X)  (X)  @
     
          @    X    (X)  (@)  X    @    #    X    @    X
     
          (#)  X    X    @    X    X    (#)  X    X    (#)
     
          X   = 9+ year old trees
          #   = 6 year old trees
          @  = 4 year old trees
          (  ) = Tree selected for appraisal
     
If the above situation occurs, the adjuster cannot determine the actual
percent of damage for each age group of trees. The "Applicable Percent
of Loss" (item 24 on the appraisal worksheet) calculated from acreage
that has more than one age group will be an average percent of damage
for the entire acreage appraised.  The claim form requires a separate
line entry for each age group of trees as shown on the acreage report.
     
ACTION:
     
A.   The adjuster must complete a separate appraisal worksheet for each 
     age group of trees on the unit or plot when the acreage and 
     location of the age group of trees can be determined from the
     producer's records.  The "Applicable Percent of Loss" (item 24)
     determined for each age group of trees will be used to determine 
     the amount of loss on the claim form for that age group of trees.
     
B.   For a unit or plot that contains more than one age group of trees 
     on the acreage report, and no maps or records are available that
     show age and location of the individual trees to allow division 
     into subfields by age of trees, the adjuster must complete the
     appraisal worksheet based on a representative sample of all trees 
     in the unit or plot.  The percent of loss determined will be an
     average for the entire acreage being appraised.  
     
     The sample size must be large enough to reasonably expect that all 
     ages of trees have been sampled during the appraisal.
    
     For appraisals as described in B above, make no entry on the
     appraisal worksheet for item 10 (Year Setout) and item 11 (Percent
     Value).  Once the Applicable Percent of Loss (item 24) is
     determined, apply that percentage on the claim form for each line
     with the applicable acreage and age of trees, as reported on the
     acreage report.