Final Agency Determination: FAD-002

FAD-002

Subject The Definition of 'share" under 7 C.F.R. 457.8-Definitions

On December 7, 2000, the Risk Management Agency was asked for a final agency determination on an interpretation of a term of the policy for the 2000 crop year: The definition of 'share" under 7 C.F.R. 457.8-Definitions, which states:

Share. Your percentage of interest in the insured crop as an owner, operator, or tenant at the time insurance attaches. However, only for the purpose of determining the amount of indemnity, your share will not exceed your share at the earlier of the time of loss or the beginning of harvest.

Approved insurance providers must honor the published insurance policy language contained in 7 C.F.R. 457.8 in determining an insured's "percentage of interest" and must use the definition of 'share" contained therein notwithstanding the definitions of 'share" and of "time of loss" contained in FCIC-25010.

Any litigation with insureds resulting from an approved insurance provider's adherence to the definition of 'share" contained in 7 C.F.R. 457.8 will be of the type eligible for litigation assistance under MGR 98-031.

The interpretation is reasonable with respect to insurance providers" honoring the published insurance policy language. The share should be determined at the time the loss occurred, even if it is early in the growing season. Even if the insured were to lose the interest in the crop after that date, the insured would only be compensated for the amount of loss sustained while an actual interest existed. Therefore, the insured would still be entitled to an indemnity for that loss. If a second loss event occurred after the insured no longer had a share of the crop, this loss would not be indemnified.

The Agency does not agree that any litigation involving shares would be entitled to litigation assistance under MGR-98-031. Such cases will be evaluated in accordance with that bulletin.

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: January 19, 2001