Final Agency Determination: FAD-034

FAD: 034

Subject: Request dated June 7, 2004, for Final Agency Determination for the 2004 and subsequent crop years, regarding the interpretation of section 2(e)(5) of the Common Crop Insurance Policy, 7 CFR. 457.8.

Section 2(e)(5) of the Basic Provisions states:

2. Life of Policy, Cancellation, and Termination.

(e) If any amount due, including administrative fees or premium, is not paid or an acceptable arrangement for payment is not made on or before the termination date for the crop on which the amount is due, you will be determined to be ineligible to participate in any crop insurance program authorized under the Act in accordance with 7 CFR part 400, Subpart U.

(5) If you are ineligible, you may not obtain any crop insurance under the Act until payment is made, you execute an agreement to repay the debt and make the payments in accordance with the agreement, or you file a petition to have your debts discharged in bankruptcy."

The requestor interprets section 2(e)(5) to mean any payment required to be made, on or before a specific date, will be considered timely paid if it is postmarked on or before the due date and the payment is actually received by the company.

The Federal Crop Insurance Corporation (FCIC) agrees with the submitted interpretation of section 2(e)(5) of the Common Crop Insurance Policy. A postmark is the best evidence when a payment has been made. If the date of receipt is used, it is possible for two insureds to mail their payments on the same date but one could be received timely and the other may not. This would mean one insured would be eligible and the other would not even though their conduct was the same. Insurance is too important to be based on the vagaries of the mail delivery system.

In accordance with 7 C.F.R. 400.765 (c), this Final Agency Determination is binding on all participants in the Federal crop insurance program for the 2004 and subsequent crop years. Any appeal of this decision must be in accordance with 7 C.F.R. 400.768(g).

Date of Last Revision: September 28, 2004