With the widespread drought conditions farmers and ranchers are facing, along with other considerations in many parts of the nation causing catastrophic damage to crops, concerns have been raised about the requirement to pay crop insurance premiums timely to avoid the accrual of interest.
The Common Crop Insurance Policy, Area Risk Protection Insurance Policy, Rainfall Index Plan Common Policy, Whole-Farm Revenue Protection Pilot Policy, and Livestock policies’ Basic Provisions state that interest will accrue starting the first day of the month, following issuance of the notice of premium due by the approved insurance provider (AIP), provided that a minimum of 30 days has passed from the premium billing date.
The Risk Management Agency (RMA) recognizes the challenges farmers and ranchers are facing in light of the drought and other conditions, and as a result, will provide flexibilities to help them throughout these challenging times.
Per Managers Bulletin: MGR-22-005, AIPs are authorized to provide additional time for MPCI and Livestock policyholders to make payment of premium and administrative fees. As noted above, interest accrual on premium payments and administrative fees will be waived to the earliest of an additional 60 days of the scheduled payment due date or the termination date on policies with premium billing dates between August 1, 2022, and September 30, 2022. Premium billing dates are based upon the RMA established bill date found in the Actuarial Documents or the Actuarial Information Browser (AIB). AIPs will begin to accrue interest after this additional period for unpaid premium and administrative fees. Interest will continue to attach monthly for coverages with bill dates outside of the August 1, 2022, thru September 30, 2022 covered scope.
This bulletin does not extend the termination date of the policy. If the termination date for the coverage is within the 60-day period, the insured will still need to pay the balance by the termination date or establish a payment agreement by the termination date. Notes will be added to the Grower Billing Statements explaining the relief that is being provided and any stipulations.
Additionally, ProAg is using the guidelines of this bulletin for Private Product interest. Private Product policies with fall bill dates in the August 1, 2022, thru September 30, 2022 range will qualify for this additional time. To get more details on which policies will qualify, please contact your district sales manager (DSM) or crop accounting. Note that this does not extend any applicable Cash Discount Due Date.
Please click here to access the bulletin for additional information.