Final Agency Determination: FAD-005

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.

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