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2014 Loss Adjustment Manual Standards Handbook - USDA Risk PDF

601 Pages·2013·4.54 MB·English
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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. NOVEMBER 2013 FCIC-25010 TP 1 LOSS ADJUSTMENT MANUAL STANDARDS HANDBOOK 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.” NOVEMBER 2013 FCIC-25010 TP 2 LOSS ADJUSTMENT MANUAL STANDARDS HANDBOOK 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. NOVEMBER 2013 FCIC-25010 TP 3 LOSS ADJUSTMENT MANUAL STANDARDS HANDBOOK 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: NOVEMBER 2013 FCIC-25010 TP 4 LOSS ADJUSTMENT MANUAL STANDARDS HANDBOOK 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. NOVEMBER 2013 FCIC-25010 TP 5 LOSS ADJUSTMENT MANUAL STANDARDS HANDBOOK 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. NOVEMBER 2013 FCIC-25010 TP 6 LOSS ADJUSTMENT MANUAL STANDARDS HANDBOOK 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. NOVEMBER 2013 FCIC-25010 TP 7 LOSS ADJUSTMENT MANUAL STANDARDS HANDBOOK 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. NOVEMBER 2013 FCIC-25010 TP 8

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Nov 3, 2013 SUMMARY OF CHANGES/CONTROL CHART (Continued). 7. Para. 22 C schools, or tax-exempt organizations must be revised to. Non-Profit
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