7 USC 1523 - Pilot programs

View all text of Subchapter I [§ 1501 - § 1524]

§ 1523. Pilot programs

(a) General provisions

(1) Authority

(2) Private coverage

(3) Covered activitiesThe pilot programs described in paragraph (1) may include pilot programs providing insurance protection against losses involving—

(A) reduced forage on rangeland caused by drought or insect infestation;

(B) livestock poisoning and disease;

(D) unique special risks related to fruits, nuts, vegetables, and specialty crops in general, aquacultural species, and forest industry needs (including appreciation);

(E) after October 1, 2001, wild salmon, except that—

(i) any pilot program with regard to wild salmon may be carried out without regard to the limitations of this subchapter; and

(ii) the Corporation shall conduct all wild salmon programs under this subchapter so that, to the maximum extent practicable, all costs associated with conducting the programs are not expected to exceed $1,000,000 for fiscal year 2002 and each subsequent fiscal year.

(4) Scope of pilot programsThe Corporation may—

(A) approve a pilot program under this section to be conducted on a regional, State, or national basis after considering the interests of affected producers and the interests of, and risks to, the Corporation;

(B) operate the pilot program, including any modifications of the pilot program, for a period of up to 4 years;

(C) extend the time period for the pilot program for additional periods, as determined appropriate by the Corporation; and

(D) provide pilot programs that would allow producers—

(i) to receive a reduced premium for using whole farm units or single crop units of insurance; and

(ii) to cross State and county boundaries to form insurable units.

(b) Livestock pilot programs

(1) Definition of livestock

(2) Programs requiredSubject to paragraph (7), the Corporation shall conduct two or more pilot programs to evaluate the effectiveness of risk management tools for livestock producers, including the use of futures and options contracts and policies and plans of insurance that protect the interests of livestock producers and that provide—

(A) livestock producers with reasonable protection from the financial risks of price or income fluctuations inherent in the production and marketing of livestock; or

(B) protection for production losses.

(3) Purpose of programs

(4) Timing

(5) Relation to other limitations

(6) Assistance

(7) Private insurance

(8) Location

(9) Eligible producers

(1) In general

(2) AdministrationRevenue insurance under this subsection shall—

(A) be offered through reinsurance arrangements with private insurance companies;

(B) offer at least a minimum level of coverage that is an alternative to catastrophic crop insurance;

(D) require the payment of premiums and administrative fees by an insured producer.

(d) Premium rate reduction pilot program

(1) Purpose

(2) Establishment

(A) In generalBeginning with the 2002 crop year, the Corporation shall establish a pilot program under which approved insurance providers may propose for approval by the Board policies or plans of insurance with reduced rates of premium—

(i) for one or more agricultural commodities; and

(ii) within a limited geographic area, as proposed by the approved insurance provider and approved by the Board.

(B) Determination by BoardThe Board shall approve a policy or plan of insurance proposed under this subsection that involves a premium reduction if the Board determines that—

(i) the interests of producers are adequately protected within the pilot area;

(ii) rates of premium are actuarially appropriate, as determined by the Board;

(iii) the size of the proposed pilot area is adequate;

(iv) the proposed policy or plan of insurance would not unfairly discriminate among producers within the proposed pilot area;

(v) if the proposed policy or plan of insurance were available in a geographic area larger than the proposed pilot area, the proposed policy or plan of insurance would—(I) not have a significant adverse impact on the crop insurance delivery system;(II) not result in a reduction of program integrity;(III) be actuarially appropriate; and(IV) not place an additional financial burden on the Federal Government; and

(vi) the proposed policy or plan of insurance meets other requirements of this subchapter determined appropriate by the Board.

Time limitations and procedures

(e) Adjusted gross revenue insurance pilot program

(1) In general

(2) Additional counties

(A) In general

(B) Selection criteria

(f) Camelina pilot program

(1) In general

(2) Determination by BoardThe Board shall approve a policy or plan of insurance proposed under paragraph (1) if, as determined by the Board, the policy or plan of insurance—

(A) protects the interests of producers;

(B) is actuarially sound; and

(3) Timeframe

(g) Sesame insurance pilot program

(1) In general

(2) Terms and conditionsThe multiperil crop insurance offered under the sesame insurance pilot program shall—

(A) be offered through reinsurance arrangements with private insurance companies;

(B) be actuarially sound; and

(3) Location

(4) Duration

(h) Grass seed insurance pilot program

(1) In general

(2) Terms and conditionsThe multiperil crop insurance offered under the grass seed insurance pilot program shall—

(A) be offered through reinsurance arrangements with private insurance companies;

(B) be actuarially sound; and

(3) Location

(4) Duration

(i) Underserved crops and regions pilot programs

(1) Definition of livestock commodity

(2) Authorization

(3) Review and approval of submissions

(A) In general

(B) RequirementsTo be eligible for approval under this subsection, the approved insurance provider shall have—

(i) adequate experience underwriting and administering policies or plans of insurance that are comparable to the proposed policy or plan of insurance;

(ii) sufficient assets or reinsurance to satisfy the underwriting obligations of the approved insurance provider, and possess a sufficient insurance credit rating from an appropriate credit rating bureau, in accordance with Board procedures; and

(iii) applicable authority and approval from each State in which the approved insurance provider intends to sell the insurance product.

(D) Prioritization

(4) Payment of premium support

(A) In general

(B) Amount

(i) a percentage of premium;

(ii) a percentage of expected loss determined pursuant to a reasonable actuarial methodology; or

(iii) a fixed dollar amount per acre.

(D) Payment

(E) Operating and administrative expense payments

(i) In general

(ii) Limitation

(F) Approved insurance providersAny policy or plan of insurance approved under this subsection may be sold only by the approved insurance provider that submits the application and by any additional approved insurance provider that—

(i) agrees to pay maintenance fees or other payments to the approved insurance provider that submitted the application in an amount agreed to by the applicant and the additional approved insurance provider, on the condition that the fees or payments shall be reasonable and appropriate to ensure that the policies or plans of insurance may be made available by additional approved insurance providers; and

(ii) meets the eligibility criteria of paragraph (3)(B), as determined by the Board.

(G) Relationship to other provisions

(5) OversightThe Corporation shall develop and publish procedures to administer policies or plans of insurance approved under this subsection that—

(A) require each approved insurance provider to report sales, acreage and claim data, and any other data that the Corporation determines to be appropriate, to allow the Corporation to evaluate sales and performance of the product; and

(B) contain such other requirements as the Corporation determines necessary to ensure that the products—

(i) do not have a significant adverse impact on the crop insurance delivery system;

(ii) are in the best interests of producers; and

(iii) do not result in a reduction of program integrity.

(6) Confidentiality

(A) In general

(B) Standard

(7) Ineligible purposes

(8) Funding

(A) Limitation on expenditures

(B) Relation to other programs

(Feb. 16, 1938, ch. 30, title V, § 523, as added Pub. L. 106–224, title I, § 132(a), June 20, 2000, 114 Stat. 383; amended Pub. L. 107–171, title X, § 10004, May 13, 2002, 116 Stat. 487; Pub. L. 110–234, title XII, §§ 12025(a), 12033(c)(2)(B), May 22, 2008, 122 Stat. 1389, 1405; Pub. L. 110–246, § 4(a), title XII, §§ 12025(a), 12033(c)(2)(B), June 18, 2008, 122 Stat. 1664, 2151, 2167; Pub. L. 113–79, title XI, §§ 11025, 11026, Feb. 7, 2014, 128 Stat. 974; Pub. L. 115–123, div. F, § 60101(c)(1), Feb. 9, 2018, 132 Stat. 312; Pub. L. 115–334, title XI, § 11124, Dec. 20, 2018, 132 Stat. 4935.)