2014 Loss Adjustment Manual Standards Handbook - USDA Risk

601 Pages·2013·4.54 MB·English

LOSS

ADJUSTMENT
United States
Department of
Agriculture
MANUAL (LAM)

STANDARDS

HANDBOOK
Federal Crop
Insurance
Corporation

FCIC-25010 2014 and Succeeding Crop
(11-2013)

Years

RISK MANAGEMENT AGENCY
KANSAS CITY, MO 64133

TITLE: LOSS ADJUSTMENT MANUAL NUMBER: FCIC-25010 (11-2013)
(LAM) STANDARDS HANDBOOK
EFFECTIVE DATE: 2014 and succeeding ISSUE DATE: November 1, 2013
crop years
SUBJECT: OPI: Product Administration and Standards
Division
Provides the procedures and instructions for APPROVED:
administering the general loss adjustment of
crop insurance programs /S:/ Tim B. Witt

Deputy Administrator for Product
Management

REASON FOR ISSUANCE

Major changes: See changes or additions in text which have been highlighted. Three stars (***)
identify information that has been removed.

1. Throughout the LAM Converted to new approved format. Paragraphs are renumbered
accordingly.

All references were updated to reflect the revised paragraph
numbers.

Comments that pertain to grammar, punctuation, deleting
unneeded words, rewording to make a sentence flow better,
formatting, etc., are not listed.

Where necessary, examples and calculations were updated to
reflect current factors, prices, etc.

All references to a MIF have been deleted.

2. Para. 1 B, pg. 1 Added the Source of Authority authorizing the administration of
the Federal crop insurance program.

3. Para. 1 F, pg. 2 Added information on Title VI of the Civil Rights Act of 1964.

4. Para. 3 B, pg. 4 Added procedure for submitting procedural questions concerning
the LAM.

5. Para. 4 Abbreviations or Abbreviations or Acronyms are moved to Exhibit 1.
Acronyms

6. Para. 22 A, pg. 19 Added statement that AIPs must use RMA’s system to determine
if more than one policy is in force.

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SUMMARY OF CHANGES/CONTROL CHART (Continued)

7. Para. 22 C, pg. 19 Added statement that if the AIP determines duplicate coverage
exists and was intentional, the insured may be subject to the
consequences listed.
8. Para. 23 A(1)(a)(iii), pg. 22 Clarified that evidence of share for the judicially declared
incompetent must be provided to the AIP before acceptance of the
application.
9. Para. 23 A(1)(a)(iv), pg. 23 Clarified that a new application is required when incompetency is
dissolved, and evidence of the dissolution must be provided to the
AIP.

10. Para. 23 A(1)(b), pg. 23 Clarified that a new application is required when an minor enters
the age of legal majority and is competent to enter a legally binding
contract.

11. Para. 25 B(3)(a), pg. 35 Revised procedure to state a RAN is an acceptable number for crop
insurance purposes. A RAN is issued by RMA to those individuals
who demonstrate that they are entitled to Federal benefits in
accordance with the Personal Responsibility and Work
Opportunity Act of 1996 (PRWORA).

12. Para. 25 C(1)(b), pg. 37 Revised to state a policy will be void if it does not include all
persons with an SBI in the applicant or insured.

13. Para. 25 C(1)(g), pg. 38 Added Example 3.

14. Para. 25 D(1)(a)(ii), pg. 39 Added “...disappears, or is judicially declared incompetent...”

15. Para. 25 F(2)(b)(ii), pg. 46 Added Exceptions to when separate policies for spouses are
allowed.

16. Para. 25 F(3)(a), pg. 47 Deleted the following:

1 Effective the 2012 crop year, applications/carryover policies
containing an SSN of either the applicant/insured or an
individual SBI must be reported as an individual.
2 The AIP must notify the carryover insured that he/she or
their SBI has been identified as an individual and of the
change in person type.

17. Para. 25 G(1)(a), pg. 49 Clarified that if the tenant or landlord has a separate policy for the
crop/county, they cannot be insured under another person’s policy.

18. Para. 25 I, pg. 50 Added “Joint ventures are not allowed between spouses.”
19. Para. 25 I(1)(b), pg. 51 Deleted “If two or more persons do not have a SBI in the joint
venture, documentation must be obtained from the insured
verifying there is no SBIs.”

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SUMMARY OF CHANGES/CONTROL CHART (Continued)

20. Para. 25 J, pg. 52 Deleted “Share. The corporation may insure its share as landlord,
owner-operator, operator, or tenant.”

21. Para. 25 L(1)(a), pg. 53 Clarified that an EIN must be established, used, and reported.

22. Para. 25 L(1)(a), pg. 53 Deleted the following:

(a) An EIN. Effective for 2012, an estate which previously
reported a SSN must provide an EIN to continue to be
insured as an estate for the 2012 crop year.

1 The AIP must use the applicable form to obtain an
EIN and revise existing policies

a The change in identification number does not
constitute a new insured.

b Any multi-year WA must be revised to reflect
the new identification number reported.
23. Para. 25 N(2), pg. 56 Deleted the following:

(c) Effective for 2012, policies reported by the AIP to RMA as a
public agency (city, county, or state) person type must be
revised to State/Local Government. The AIP must notify
carryover insured’s of the change in person type.
24. Para. 25 N(4), pg. 56 Deleted the followinig:
(a) Effective for 2012, policies reported by the AIP to RMA as
the following person types: associations, clubs, private
schools, or tax-exempt organizations must be revised to
Non-Profit or Tax-Exempt Organization. The AIP must
notify carryover insured’s of the change in person type.
25. Para. 41, pg. 71 Added information clarifying a form or card meeting FCIC-form
standards for the required information for a Notice of Loss may be
used by the insured to file written notice to the AIP or, if
applicable, to confirm the notice in writing within 15 days. If the
agent/AIP receives the notice from the insured by phone, e-mail,
FAX, or postal service, and documents such notice on a phone log,
claim form, claims log, claim registry, automated notice system to
open claims, etc., the policy requirement for confirming the notice
of loss in writing will be considered fulfilled.

26. Para. 51 A, pg. 75 Clarified that except for Nursery and Cultivated Clams, the acreage
report (tonnage report for raisins) is the document used to
determine the liability or amount of insurance, the premium, and
the insurable share at the time insurance attached.

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SUMMARY OF CHANGES/CONTROL CHART (Continued)

27. Para. 53 E (1) & (2), pg. 85 Clarified that when referencing a firm engaged in land
measurement, the primary function of such firm must be land
measurement. A company whose primary function is not land
measurement, but provides land measurement as part of their
service (e.g., spray or fertilizer applications businesses) should not
be considered a firm engaged land measurement service.

28. Para. 53 H, pg. 87 Clarified that the information in this paragraph applies only when
the APH or practice/type/variety within the same unit is not
correctable as allowed in Para. 29 B.
29. Para. 62 D (1) (a), pg. 94 Revised to clarify that acreage is not insurable if the acreage was
initially planted after the LPP (FPD if LPP is not applicable),
unless late planting coverage is allowed by the policy.

30. Para. 83 B, pg. 98 Clarified that in some counties summer fallow is an insurable
practice, and that all of the procedures in 83 B (1) – (3) must be
met to qualify as SF practice for the current crop year.

31. Para. 83 B (2), pg. 98 Clarified that in addition to lying fallow for a full crop year, plant
growth on the acreage must be terminated on or before the
applicable plant growth termination date, followed by a
continuous chemical and/or mechanical weed control program.

Added an example illustrating the applicable termination date.
32. Para. 83 B (3), pg. 98 Clarified that for land devoted to a perennial crop, such as
grasses, alfalfa, clover, or other perennial plants or forbs,
including land previously enrolled in CRP, the perennial crop must
be terminated by mechanical or chemical means a full crop year
before planting of the crop qualifying for the SF practice.

33. Para. 83 B (3), Exception 1, pg. Added language to clarify that representative sample area left for
99: loss adjustment purposes will qualify for a SF practice provided
the remainder of the field qualifies for the SF practice.

Added several examples to help illustrate this procedure.
34. Para. 83 B (3), Exception 2, pg. Added language to clarify when acreage on which a crop was
99: planted in the preceding crop year shall qualify for the SF practice
in the current crop year.

35. Para. 83 B (3), Exception 3, pg. Added language to clarify when acreage that did not qualify for
100: the SF practice in the preceding crop year and on which a crop
was planted in the preceding crop year shall qualify for the SF
practice in the spring of the current crop year provided:

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SUMMARY OF CHANGES/CONTROL CHART (Continued)

36. Para. 84 A (1) (b), pg. 101 Added language to clarify if insureds that have no reasonable
expectation of receiving adequate irrigation water, they must make
decisions to plant fewer acres, plant and insure acreage for which
adequate water is not available under a non-irrigated practice, or
report acreage as PP

37. Para. 84 B, pg. 102 Added language to clarify that AIPs are to provide to insureds for
whom the irrigated practice may apply, the “Irrigated Practice
Guidelines” prior to the time insurance generally attached in an
area.
38. Para. 84 C, pg. 102 Added definitions for Adequacy of Water, Good Irrigation
Practice, and Reasonable Expectation of Adequate Water.

39. Para. 84 D, pg. 103 Updated some of the Factors to Consider for IRR Practice
Reporting and Coverage for clarification.

40. Para. 84 G, pg. 107 Added language to clarify that the insured is not expected to
purchase more expensive equipment or take extraordinary
measures to modify their irrigation facilities in order to deliver
adequate irrigation water to their crop(s) the surface water (e.g.,
river) level has decreased to the point that the insured’s existing
equipment cannot lift the amount of water historically lifted to
adequately irrigate the crop.
41. Para. 84 M (4), pg. 109 Added language to clarify that if no other appropriate practice is
available for the acreage, insurance will not be considered to have
attached on the acreage.

42. Para. 84 S, pg. 116 Added language stating what the AIP/Adjuster must verify and
document concerning irrigated practice.

43. Para. 87 A (1), pg. 117 Deleted – “(b) The certified organic and transitional acreage is
identified as insured (or insurable) in the CP; or”

44. Para. 87 B (1), pg. 118 Clarified that when an organic plan is in not effect, appraisals for
production lost due to uninsured causes may apply for not
following weed or disease control measures or GFP
recommendations for conventional practices.

45. Para. 87 C, pg. 118 Added language stating Section 21 of the BP gives AIP authority
to request any records related to the insured crop, including
insured crops grown under an organic practice.

46. Para. 87 C (2), pg. 118 Added procedure for a new insured that receives an organic
certification after the ARD, and if the insured has acreage but the
certifying agent did not reissue the certificate after the organic
plan was updated.

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SUMMARY OF CHANGES/CONTROL CHART (Continued)

47. Para. 87 F, pg. 121 Clarified procedure concerning certification exemption.

48. Para. 101 B (1), pg. 138 Added language to instruct adjuster to also refer to the applicable
CP or SP for the crop and county for additional reasons why the
crop may not be insured.

49. Para. 114 D, pg. 154 Updated crop years in examples.

50. Para. 131 A (d), pg. 175 Clarified the intent of the paragraph.

51. Para. 132 E (2) (a), pg. 186 Removed unnecessary language.
52. Para. 132 F (5), pg. 190 Removed information regarding how to convert to the new 2011
unit numbering system.

53. Para. 132 H (5), pg. 195 Removed specific section references in the Written Agrement
Handbook.

54. Para. 174 H (1), pg. 214 Inserted instructions requiring AIPs to provide insured’s with
consent in advance of replanting. Also indicated that exceptions
to this requirement cannot be made even if the original stand
remains intact and the insured inter-seeded, replanted alongside
the original damaged rows, or left representative sample areas at
the insured’s discretion.

55. Para. 175 A (1) and (2), pg 218 Inserted at the beginning of the paragraph language describing the
purpose of the certification form. Rewrote sections A (1) and (2)
to clarify how the certification form is used in different claim
scenarios and when the claim can be finalized.
56. Para. 175 C, pg. 220 Revised to emphasize the insured must sign and date the
certification form. Added under C (5) as an additional reason the
insured is to return a certification form when damaged nursery
plants have been destroyed. Moved section D (2) up to section D
(1) and renumbered D (3) as D (2). In D (2) (a) clarified the
adjuster must review the certification form and claim, and if the
information on the two forms agree the adjuster is to send both
forms to the AIP.

57. Para. 175 D(1), pg. 221 Revised paragraph to clarify that damaged nursery plants that will
not recover any time after the loss occurrence require the adjuster
to make another on-the-farm inspection to verify .

58. Para. 175 D(3)(a), pg. 222 Revised paragraph to clarify that the adjuster must review the
Certification Form and the claim. If the data on the Certification
Form and the claim agree, the adjuster may sign the claim form
and send both documents to the AIP, and no follow-up inspection
is required.

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SUMMARY OF CHANGES/CONTROL CHART (Continued)

59. Para. 178 A (3), pg. 229 Clarified the title of the subsection by inserting the words “of
Time.”
60. Para. 178 A (3)(b), pg.230 Clarified that when the insured requests the 180 day delay in
measurement, it will not be considered a delayed claim.

61. Para. 178 B (2) (a), pg. 233 Clarified the intent of the subsection.
62. Para. 178 C (2) (b), pg. 234 Inserted instructions requiring the AIP to document why the claim
form and the insured’s signature could not be obtained within the
required time frame.

63. Para. 182 A (1), pg. 247 Removed the reference to the CIH.
64. Para. 201 B (1), pg. 254 Clarified the intent of the subsection by inserting that a
measurement service is a firm whose primary function is land
measurement services. Inserted if an acreage measurement is only
requested for a portion of the acreage in a unit, the insured must
separately identify the acreage for which an acreage measurement
has been requested. Also clarified the intent of subsection (3).

65. Para. 201 C, pg. 256 Revised the subsection title by adding “the AIP,” and inserting “or
a” before the phrase Measurement Service.

66. Para. 201 E (3), pg. 257 Inserted at the end of Example 1 that “A LAF will apply.”
67. Para. 201 I (3) (a), pg. 263 Revised to indicate planting rate records are required if variable
rate planting populations are recommended by ag experts.

68. Para. 213 C (1) (d),pg. 278 Added an example at the end of (d) to clarify the intent of the
subsection.

69. Para. 213 H (2) (e), pg. 281 Clarified the intent of the subsection, revised the insured’s
certification statement, and added instructions to attach the
original signed Certification form to the claim.
70. Para. 216 E (1) (b) (i)(A), pg. Inserted an example calculation for determining the equivalent
290 area needed for an RSA contained within a center pivot irrigation
circle.

71. Para 218 C (4) (a)(i), pg. 299 Moved statement to Para 218 C (4) (a)(iii) for clarity.

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SUMMARY OF CHANGES/CONTROL CHART (Continued)

72. Para 219 G (1) (a) (iv), pg. 304 Revised statement for clarity.

73. Para. 232 D(2)(a), pg. 318 Added wild rice to list of crops for which blended samples may be
accepted.

74. Para 232 H (14), pg. 330 Updated discount factors in the examples for the current crop year.

75. Para. 232 J(1), pg. 341 Revised statement for clarification.

76. Para. 232 J (3) (a) (iii)(B), pg. Revised language to clarify when the AIP receives the
345 Certification Form back from the insured, the claim cannot be
finalized until the adjuster makes another on-the-farm inspection
to verify destruction.

77. Para. 234 A (1)(b), pg. 349 Corrected the entry instructions for columns 58a and 58b on the
PW.

78. Para 238 P Examples, pg. 375 Updated discount factors in the examples for the current crop year.

79. Para. 252 A, pg. 383 Changed “uninsurable” to “uninsured” for clarification.

80. Para. 252 B (1) (b), pg. 384 Added language to allow weighed production records from a grain
cart equipped with scales integrated with Bluetooth (or other
wired or wireless) interface that is capable of electronically
recording and storing weight records on a load by load basis
without requiring verification of the production records from such a
grain cart by other means (i.e., bin measurements, sales records, etc.),
unless there is reason to question the accuracy of the records provided
by the insured.

81. Para. 252 C, pg. 386 Moved this procedure from subparagraph D to C for clarity.
Added procedure for acceptable production records from a grain
cart equiped with scales integrated with a Bluetooth interface.

82. Para. 252 C (4), pg. 386 Added a grain cart that is equipped with scales integrated
Bluetooth (or other wired or wireless) interface that is capable of
electronically recording and storing weight records on a field-by-
field basis from which the insured can print all individual load
tickets and detailed summaryas an acceptable scale type.

83. Para. 252 D(2)(c)(i), pg. 387 Statement revised to allow gross weight records only from a grain cart if
it is equipped with scales integrated with Bluetooth (or other wired
or wireless) interface that is capable of electronically recording
and storing weight records on a load by load basis from which the
insured can print all individual load tickets and detailed summary,
by unit..

84. Para. 253 E, pg. 395 Changed the calculations to round to 6 decimal places instead of to
whole percent.

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