Final Agency Determination: FAD-189

Subject: Request dated May 3, 2013, to the Risk Management Agency (RMA) requesting a Final Agency Determination for the 2011 crop year regarding the interpretation of section 20(b)(1) and (2) of the Common Crop Insurance Policy Basic Provisions (Basic Provisions), published at 7 C.F.R. § 457.8. This request is pursuant to 7 C.F.R. part 400, subpart X.

Background:

Section 20 of the Basic Provisions states in relevant part:

20. Mediation, Arbitration, Appeal, Reconsideration, and Administrative and Judicial Review.

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(b) Regardless of whether mediation is elected:

(1) The initiation of arbitration proceedings must occur within one year of the date we denied your claim or rendered the determination with which you disagree, whichever is later;

(2) If you fail to initiate arbitration in accordance with section 20(b)(1) and complete the process, you will not be able to resolve the dispute through judicial review;

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Interpretation Submitted

The requestor interprets this section as requiring that arbitration proceedings be properly filed within one year of the denial of a claim; and that this requirement is not met by requesting arbitration proceedings, but failing to prefect the request by paying the required filing fee within the one year period. The requestor also interprets this provision as requiring dismissal of a claim when a request for arbitration is filed, but is dismissed due to nonpayment of the filing fee, even if the request for arbitration is re-filed, and the fee is paid more than one year after the denial of the claimant's claim.

Final Agency Determination

The Federal Crop Insurance Corporation (FCIC) agrees with the requestor’s interpretation. FCIC agrees section 20(b)(1)of the Basic Provisions provides a one year deadline for the policyholder to begin arbitration proceedings if a determination by an approved insurance provider (AIP) is disputed. The policyholder is held to the rules of the arbiter of choice when it decides to initiate an arbitration proceeding. The failure of the policyholder to adhere to all of the filing requirements of the arbiter does not extend the one year provision to file for arbitration specified in section 20(b)(1).

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 crop years the policy provisions are in effect. Any appeal of this decision must be in accordance with 7 C.F.R. § 400.768(g).

Date of Issue: July 25, 2013