Final Agency Determination: FAD-196

Subject: Request dated August 30, 2013, to the Risk Management Agency (RMA) requesting a Final Agency Determination for the 2012 crop year regarding the interpretation of section 20(a)(1) of the Common Crop Insurance Basic Provisions (Basic Provisions), published at 7 C.F.R. § 457.8. This request is pursuant to 7 C.F.R. § 400, subpart X.

Background:

Section 20(a)(1) of Basic Provisions states:

(a) If you and we fail to agree on any determination made by us except those specified in section 20(d) or (e), the disagreement may be resolved through mediation in accordance with section 20(g). If resolution cannot be reached through mediation, or you and we do not agree to mediation, the disagreement must be resolved through arbitration in accordance with the rules of the American Arbitration Association (AAA), except as provided in sections 20(c) and (f), and unless rules are established by FCIC for this purpose. Any mediator or arbitrator with a familial, financial or other business relationship to you or us, or our agent or loss adjuster, is disqualified from hearing the dispute.

(1) All disputes involving determinations made by us, except those specified in section 20(d) or (e), are subject to mediation or arbitration. However, if the dispute in any way involves a policy or procedure interpretation, regarding whether a specific policy provision or procedure is applicable to the situation, how it is applicable, or the meaning of any policy provision or procedure, either you or we must obtain an interpretation from FCIC in accordance with 7 CFR part 400, subpart X or such other procedures as established by FCIC.

(i) Any interpretation by FCIC will be binding in any mediation or arbitration.

(ii) Failure to obtain any required interpretation from FCIC will result in the nullification of any agreement or award.

(iii) An interpretation by FCIC of a policy provision is considered a determination that is a matter of general applicability.

(iv) An interpretation by FCIC of a procedure may be appealed to the National Appeals Division in accordance with 7 CFR part 11.

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The requestor interprets section 20(a)(1) of the Basic Provisions to mean that a policy interpretation from FCIC can only be obtained in accordance with 7 C.F.R. part 400, subpart X or such other procedures as established by FCIC and no provision of the Act or regulations promulgated thereunder may be interpreted by a mediator, hearing officer, or any person outside of FCIC. Failure to obtain any required interpretation from FCIC will result in nullification of any agreement or award including a determination issued by a National Appeals Division (NAD) hearing officer or by the NAD Director.

FCIC agrees with the requestor’s interpretation. Section 506(r) of the Federal Crop Insurance Act, 7 C.F.R. part 400, subpart X and Manager’s Bulletin No. MGR-05-018 make it clear that FCIC is responsible for making interpretations of policy and procedure. FCIC agrees that if there is a dispute over any policy or procedural provision in any forum, including before the National Appeals Division, the parties are required to seek a Final Agency Determination or interpretation of procedure from FCIC. FCIC agrees that failure to obtain the required interpretation from FCIC will result in nullification of any award.

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: November 13, 2013