CROP INSURANCE.

SEC. 106. CROP INSURANCE. Section 508 (7 U.S.C. 1508) is amended to read as follows: “SEC. 508. CROP INSURANCE. “(a) Authority to Offer Insurance.— “(1) In general..— If sufficient actuarial data are available (as determined by the Corporation), the Corporation may insure, or provide reinsurance for insurers of, producers of agricultural commodities grown in the United States under 1 or more plans of insurance determined by the Corporation to be adapted to the agricultural commodity concerned. To qualify for coverage under a plan of insurance, the losses of the insured commodity must be due to drought, flood, or other natural disaster (as determined by the Secretary). “(2) Period.— Except in the cases of tobacco and potatoes, insurance shall not extend beyond the period during which the insured commodity is in the field. As used in the preceding sentence, in the case of an aquacultural species, the term ‘field’ means the environment in which the commodity is produced. “(3) Exclusions.— Insurance provided under this subsection shall not cover losses due to— “(A) the neglect or malfeasance of the producer; “(B) the failure of the producer to reseed to the same crop in such areas and under such circumstances as it is customary to reseed; or “(C) the failure of the producer to follow good farming practices (as determined by the Secretary). “(4) Expansion to other areas or single producers.— “(A) Area expansion.— The Corporation may offer plans of insurance or reinsurance for production of agricultural commodities in the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Common-wealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, 108 STAT. 3184and the Republic of Palau in the same manner as provided in this section for production of agricultural commodities in the United States. “(B) Producer expansion.— In an area in the United States or specified in subparagraph (A) where crop insurance is not available for a particular agricultural commodity, the Corporation may offer to enter into a written agreement with an individual producer operating in the area for insurance coverage under this title if the producer has actuarially sound data relating to the production by the producer of the commodity and the data is acceptable to the Corporation. “(5) Dissemination of crop insurance information.— The Corporation shall make available to producers through local offices of the Department— “(A) current and complete information on all aspects of Federal crop insurance; and “(B) a listing of insurance agents and companies offering to sell crop insurance in the area of the producers. “(6) Addition of new and specialty crops.— “(A) Data collection.— Not later than 180 days after the date of enactment of this paragraph, the Secretary shall issue guidelines for publication in the Federal Register for data collection to assist the Corporation in formulating crop insurance policies for new and specialty crops. “(B) Addition of new crops.— Not later than 1 year after the date of enactment of this paragraph, and annually thereafter, the Corporation shall report to Congress on the progress and expected timetable for expanding crop insurance coverage under this title to new and specialty crops. “(C) Addition of direct sale perishable crops.— Not later than 1year after the date of enactment of this paragraph, the Corporation shall report to Congress on the feasibility of offering a crop insurance program designed to meet the needs of specialized producers of vegetables and other perishable crops who market through direct marketing channels. “(b) Catastrophic Risk Protection.— “(1) In general.— The Corporation shall offer a catastrophic risk protection plan to indemnify producers for crop loss due to loss of yield or prevented planting, if provided by the Corporation, when the producer is unable, because of drought, flood, or other natural disaster (as determined by the Secretary), to plant other crops for harvest on the acreage for the crop year. “(2) Amount of coverage.— “(A) In general.— Subject to subparagraph (B)— “(i) in the case of each of the 1995 through 1998 crop years, catastrophic risk protection shall offer a producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 60 percent of the expected market price, or a comparable coverage (as determined by the Corporation); and “(ii) in the case of each of the 1999 and subsequent crop years, catastrophic risk protection shall offer a 108 STAT. 3185producer coverage for a 50 percent loss in yield, on an individual yield or area yield basis, indemnified at 55 percent of the expected market price, or a comparable coverage (as determined by the Corporation). “(B) Reduction in actual payment.— The amount paid to a producer on a claim under catastrophic risk protection may reflect a reduction that is proportional to the out-of-pocket expenses that are not incurred by the producer as a result of not planting, growing, or harvesting the crop for which the claim is made, as determined by the Corporation. “(3) Yield and loss basis.— A producer shall have the option of basing the catastrophic coverage of the producer on an individual yield and loss basis or on an area yield and loss basis, if both options are offered by the Corporation. “(4) Sale of catastrophic risk coverage.— “(A) In general.— Catastrophic risk coverage may be offered by— “(i) approved insurance providers, if available in an area; and “(ii) at the option of the Secretary that is based on considerations of need, local offices of the Department “(B) Need.— For purposes of considering need under subparagraph (A)(ii), the Secretary may take into account the most efficient and cost-effective use of resources, the availability of personnel, fairness to local producers, the needs and convenience of local producers, and the availability of private insurance carriers. “(5) Administrative fee.— “(A) Fee required.— Producers shall pay an administrative fee for catastrophic risk protection. The administrative fee for each producer shall be $50 per crop per county, but not to exceed $200 per producer per county up to a maximum of $600 per producer for all counties in which a producer has insured crops. The administrative fee shall be paid by the producer at the time the producer applies for catastrophic risk protection. “(B) Use of fees.— “(i) Fees up to $100.— “(I) Fees collected by usda offices.— Not more than $100 of the administrative fees paid by a producer for catastrophic risk coverage that are collected by an office of the Department shall be credited to the appropriations account providing funds for the payment or operating and administrative expenses incurred for the delivery of catastrophic risk protection under this section. The fees shall be collected in accordance with appropriation Acts and shall be available until expended without fiscal year limitation for the payment of the expenses. “(II) Fees collected by approved insurance pro3s.— Not more than $100 of the administrative fees paid by a producer for catastrophic risk coverage that are collected by an approved insurance provider shall be retained by the pro-108 STAT. 3186vider as payment for operating and administrative expenses incurred for the delivery of catastrophic risk protection. “(ii) Fees in excess of $100—Notwithstanding the authority granted to the Secretary under the Federal Crop Insurance Corporation account provisions of the Agricultural, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1995, all fees collected under this subsection in excess of $100 per producer per county shall be deposited in the crop insurance fund established under section 516(c), to be available for the programs and activities of the Corporation. “(C) Waiver of fee.— The Corporation shall waive the administrative fee for limited resource farmers, as defined by the Corporation. “(6) Participation requirement.— A producer may obtain catastrophic risk coverage for a crop of the producer on land in the county only if the producer obtains the coverage for the crop on all insurable land of the producer in the county. “(7) Eligibility for department programs.— “(A) In general.— To be eligible for any price support or production adjustment program, the conservation reserve program, or any benefit described in section 371 of the Consolidated Farm and Rural Development Act, the producer must obtain at least the catastrophic level of insurance for each crop of economic significance grown on each farm in the county in which the producer has an interest, if insurance is available in the county for the crop. “(B) Definition of crop of economic significance.— As used in this paragraph, the term ‘crop of economic significance’ means a crop that has contributed, or is expected to contribute, 10 percent or more of the total expected value of all crops grown by the producer. “(8) Limitation due to risk.— The Corporation may limit catastrophic risk coverage in any county or area, or on any farm, on the basis of the insurance risk concerned. “(9) Transitional coverage for 1995 crops.— Effective only for a 1995 crop planted or for which insurance attached prior to January 1, 1995, the Corporation shall allow producers of the crops until not later than the end of the 180-day period beginning on the date of enactment of the Federal Crop Insurance Reform Act of 1994 to obtain catastrophic risk protection for the crop. On enactment of such Act, a producer who made timely purchases of a crop insurance policy before the date of enactment of such Act, under the provisions of this title then in effect, shall be eligible for the same benefits to which a producer would be entitled under comparable additional coverage under subsection (c). “(10) Simplification.— “(A) Catastrophic risk protection plans.— In developing and carrying out the policies and procedures for a catastrophic risk protection plan under this title, the Corporation shall, to the maximum extent practicable, minimize the paperwork required and the complexity and 108 STAT. 3187costs of procedures governing applications for, processing, and servicing of the plan for all parties involved. “(B) Other plans.— To the extent that the policies and procedures developed under subparagraph (A) may be applied to other plans of insurance offered under this title without jeopardizing the actuarial soundness or integrity of the crop insurance program, the Corporation shall apply the policies and procedures to the other plans of insurance within a reasonable period of time (as determined by the Corporation) after the effective date of this paragraph. “(c) General Coverage Levels.— “(1) Additional coverage generally.— “(A) In general.— The Corporation shall offer to producers of agricultural commodities grown in the United States plans of crop insurance that provide additional coverage. “(B) Purchase.— To be eligible for additional coverage, a producer must apply to an approved insurance provider for purchase of additional coverage if the coverage is available from an approved insurance provider. If additional coverage is unavailable privately, the Corporation may offer additional coverage plans of insurance directly to producers. “(2) Transfer of relevant information.— If a producer has already applied for catastrophic risk protection at the local office of the Department and elects to purchase additional coverage, the relevant information for the crop of the producer shall be transferred to the approved insurance provider servicing the additional coverage crop policy. “(3) Yield and loss basis.— A producer shall have the option of purchasing additional coverage based on an individual ' 1 and loss basis or on an area yield and loss basis, if options are offered by the Corporation. “(4) Level of coverage.— The level of coverage shall be dollar denominated and may be purchased at any level not to exceed 85 percent of the individual yield or 95 percent of the area yield (as determined by the Corporation). Not later than the beginning of the 1996 crop year, the Corporation shall provide producers with information on catastrophic risk and additional coverage in terms of dollar coverage (within the allowable limits of coverage provided in this paragraph). “(5) Price level.— The Corporation shall establish a price level for each commodity on which insurance is offered that— “(A) shall not be less than the projected market price for the commodity (as determined by the Corporation); or “(B) at the discretion of the Corporation, may be based on the actual market price at the time of harvest (as determined by the Corporation). “(6) Price elections.— “(A) In general.— Subject to subparagraph (B), insurance coverage shall be made available to a producer on the basis of any price election that equals or is less than the price election established by the Corporation. The coverage shall be quoted in terms of dollars per acre. 108 STAT. 3188 “(B) Minimum price elections.— The Corporation may establish minimum price elections below winch levels of insurance shall not be offered. “(C) Wheat classes and malting barley.— The Corporation shall, as the Corporation determines practicable, offer producers different price elections for classes of wheat and malting barley (including contract prices in the case of malting barley), in addition to the standard price election, that reflect different market prices, as determined by the Corporation. The Corporation shall, as the Corporation determines practicable, offer additional coverage for each class determined under this subparagraph and charge a premium for each class that is actuarially sound. “(7) Fire and hail coverage.— For levels of additional coverage equal to 65 percent or more of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, a producer may elect to delete from the additional coverage any coverage against damage caused by fire and hail if the producer obtains an equivalent or greater dollar amount of coverage for damage caused by fire and hail from an approved insurance provider. On written notice of the election to the company issuing the policy providing additional coverage and submission of evidence of substitute coverage on the commodity insured, the premium of the producer shall be reduced by an amount determined by the Corporation to be actuarially appropriate, taking into account the actuarial value of the remaining coverage provided by the Corporation. In no event shall the producer be given credit for an amount of premium determined to be greater than the actuarial value of the protection against losses caused by fire and hail that is included in the additional coverage for the crop. “(8) State premium subsidies.— The Corporation may enter into an agreement with any State or agency of a State under which the State or agency may pay to the approved insurance provider an additional premium subsidy to farther reduce the portion of the premium paid by producers in the State. “(9) Limitations on additional coverage.— The Board may limit the availability of additional coverage under this subsection in any county or area, or on any farm, on the basis of the insurance risk involved. The Board shall not offer additional coverage equal to less than 50 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage. “(10) Administrative fee.— “(A) Fee required.— Except as otherwise provided in this paragraph, if a producer elects to purchase additional coverage for a crop at a level that is less than 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the producer shall pay an administrative fee for the additional coverage. Subsection (b)(5) shall apply in determining the amount and use of the administrative fee or in determining whether to waive the administrative fee. 108 STAT. 3189 “(B) Exception.— If a producer elects to purchase additional coverage for a crop equal to 65 percent or more of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the producer shall not be subject to the administrative fee required by this paragraph or subsection (b)(5). If the producer has already paid the administrative fee for a lower level of coverage for the crop, the administrative fee shall be refunded to the producer unless the refund would reduce to less than $200 the total amount of the administrative fees paid by the producer for 2 or more crops in the same county for which a lower level of coverage is obtained. “(C) Additional fee.— If a producer elects to purchase additional coverage for a crop equal to or exceeding 65 percent of the recorded or appraised average yield and 100 percent of the expected market price or an equivalent coverage, the producer shall pay an administrative fee of $10 for the coverage. If a producer has already paid an administrative fee for lesser coverage for the crop, the fee for lesser coverage shall be refunded to the producer unless the producer has paid the maximum fee for lesser coverage and refund of the fee will not reduce the amount to be paid below the maximum amount “(D) Deposit of fees.— Notwithstanding the authority granted to the Secretary under the Federal Crop Insurance Corporation account provisions of the Agricultural, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act 1995, administrative fees collected under subparagraph (B) in excess of $100 per producer per county and under subparagraph (C) shall be deposited in the insurance fund established under section 516(c) to be available for the programs and activities of the Corporation. “(d) “(1) Premiums required.— The Corporation shall fix adequate premiums for all the plans of insurance of the Corporation at such rates as the Board determines are actuarially sufficient to attain an expected loss ratio of not greater than 1.1 through September 30, 1998, and not greater than 1.075 after October 1, 1998. “(2) Premium amounts.— The premium amounts for catastrophic risk protection under subsection (b) and additional coverage under subsection (c) shall be fixed as follows: “(A) In the case of catastrophic risk protection, the amount of the premium shall be sufficient to cover anticipated losses and a reasonable reserve. “(B) In the case of additional coverage below 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, but greater than 50 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the amount of the premium shall— “(i) be sufficient to cover anticipated losses and a reasonable reserve; and 108 STAT. 3190 “(ii) include an amount for operating and administrative expenses, as determined by the Corporation. “(C) In the case of additional coverage equal to or greater than 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the amount of the premium shall— “(i) be sufficient to cover anticipated losses and a reasonable reserve; and “(ii) include an amount for operating and administrative expenses, as determined by the Corporation, on an industry-wide basis as a percentage of the amount of the premium used to define loss ratio. “(e) Payment of Portion of Premium by Corporation.— “(1) In general.— For the purpose of encouraging the broadest possible participation of producers in the catastrophic risk protection provided under subsection (b) and the additional coverage provided under subsection (c), the Corporation shall pay a part of the premium in the amounts provided in accordance with this subsection. “(2) Amount of payment.— The amount of the premium to be paid by the Corporation shall be as follows: “(A) In the case of catastrophic risk protection, the amount shall be equivalent to the premium established for catastrophic risk protection under subsection (d)(2)(A). “(B) In the case of coverage below 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, but greater than 50 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, the amount shall be equivalent to the amount of premium established for catastrophic risk protection coverage and the amount of operating and administrative expenses established under subsection (d)(2)(B). “(C) In the case of coverage equal to or greater than 65 percent of the recorded or appraised average yield indemnified at 100 percent of the expected market price, or an equivalent coverage, on an individual or area basis, the amount shall be equivalent to an amount equal to the premium established for 50 percent loss in yield indemnified at 75 percent of the expected market price and the amount of operating and administrative expenses established under subsection (d)(2)(C). “(3) Premium reduction.— If an approved insurance provider determines that the provider may provide insurance more efficiently than the expense reimbursement amount established by the Corporation, the approved insurance provider may reduce, subject to the approval of the Corporation, the premium charged the insured by an amount corresponding to the efficiency. The approved insurance provider shall apply to the Corporation for authority to reduce the premium before making such a reduction, and the reduction shall be subject to the rules, limitations, and procedures established by the Corporation. “(4) Individual and area crop insurance coverage.— The Corporation shall allow approved insurance providers to 108 STAT. 3191offer a plan of insurance to producers that combines both individual yield coverage and area yield coverage at a premium rate determined by the provider under the following conditions: “(A) The individual yield coverage shall he equal to or greater than catastrophic risk protection as described in subsection (b). “(B) The combined policy shall include area yield coverage that is offered by the Corporation or similar area coverage, as determined by the Corporation. “(C) The Corporation shall provide reinsurance on th— area yield portion of the combined policy at the request of the provider, except that the provider shall agree to pay to the producer any portion of the area yield and loss indemnity payment received from the Corporation or a commercial reinsurer that exceeds the individual indemnity payment made by the provider to the producer. “(D) The Corporation shall pay a part of the premium equivalent to— “(i) the amount authorized under paragraph (2) (except provisions regarding operating and administrative expenses); and “(ii) the amount of operating and administrative expenses authorized by the Corporation for the area yield coverage portion of the combined policy. “(E) The provider shall provide all underwriting services for the combined policy, including the determination of individual yield coverage premium rates, the terms and conditions of the policy, and the acceptance and classification of applicants into risk categories, subject to subparagraph (F). “(F) The Corporation shall approve the combined policy unless the Corporation determines that the policy is not actuarially sound or that the interests of producers are not adequately protected. “(f) “(1) In general.— To participate in catastrophic risk protection coverage under this section, a producer shall submit an application at the local office of the Department or to an approved insurance provider. “(2) Sales closing date.— For coverage under this title, each producer shall purchase crop insurance on or before the sales closing date for the crop by providing the required information and executing the required documents. Subject to the goal of ensuring actuarial soundness for the crop insurance program, the sales closing date shall be established by the Corporation to maximize convenience to producers in obtaining benefits under price and production adjustment programs of the Department Beginning with the 1995 crop year, the Corporation shall establish, for an insurance policy for each insurable crop that is planted in the spring, a sales closing date that is 30 days earlier than the corresponding sales closing date that was established for the 1994 crop year. “(3) Records and reporting.— To obtain catastrophic risk protection under subsection (b) or additional coverage under subsection (c), a producer shall— “(A) provide, to the extent required by the Corporation, records acceptable to the Corporation of historical acreage 108 STAT. 3192and production of the crops for which the insurance is sought or accept a yield determined by the Corporation; and “(B) report acreage planted and prevented from planting by the designated acreage reporting date for the crop and location as established by the Corporation. “(g) Yield Determinations.— “(1) In general.— Subject to paragraph (2), the Corporation shall establish crop insurance underwriting rules that ensure that yield coverage, as specified in this subsection, is provided to eligible producers obtaining catastrophic risk protection under subsection (b) or additional coverage under subsection (c). “(2) Yield coverage plans.— “(A) Actual production history.— Subject to subparagraph (B), the yield for a crop shall be based on the actual production history for the crop, if the crop was produced on the farm without penalty during each of the 4 crop years immediately preceding the crop year for which actual production history is being established, building up to a production data base for each of the 10 consecutive crop years preceding the crop year for which actual production history is being established. “(B) Assigned yield.— If the producer does not provide satisfactory evidence of the yield of a commodity under subparagraph (A), the producer shall be assigned a yield that is not less than 65 percent of the transitional yield of the producer (adjusted to reflect actual production reflected in the records acceptable to the Corporation for continuous years), as specified in regulations issued by the Corporation based on production history requirements. “(C) Area yield.— The Corporation may offer a crop insurance plan based on an area yield that allows an insured producer to qualify for an indemnity if a loss has occurred in an area (as specified by the Corporation) in which the farm of the producer is located. Under an area yield plan, an insured producer shall be allowed to select the level of area production at which an indemnity will be paid consistent with such terms and conditions as are established by the Corporation. “(D) Commodity-by-commodity basis.— A producer may choose between individual yield or area yield coverage or combined coverage (as provided in subsection (e)(4)), if available, on a commodity-by-commodity basis. “(3) Transitional yields for producers of feed or FORAGE.— “(A) In general.— If a producer does not provide satisfactory evidence of a yield under paragraph (2)(A), the producer shall be assigned a yield that is at least 80 percent of the transitional yield established by the Corporation (adjusted to reflect the actual production history of the producer) if the Secretary determines that— “(i) the producer grows feed or forage primarily for on-farm use in a livestock, dairy, or poultry operation; and “(ii) over 50 percent of the net farm income of the producer is derived from the operation. 108 STAT. 3193 “(B) Yield calculation.— The Corporation shall— “(i) for the first year of participation of a producer, provide the assigned yield under this paragraph to the producer of feed or forage; and “(ii) for the second year of participation of the producer, apply the actual production history or assigned yield requirement, as provided in this subsection. “(C) Termination of authority.— The authority provided by this paragraph shall terminate on the date that is 3 years after the effective date of this paragraph. “(h) Submission of Policies and Materials to Board.— “(1) In general.— In addition to any standard forms or policies that the Board may require be made available to producers under subsection (c), a person may prepare for submission or propose to the Board— “(A) other crop insurance policies and provisions of policies; and “(B) rates of premiums for multiple peril crop insurance pertaining to wheat, soybeans, field corn, and any other crops determined by the Secretary. “(2) Submission of policies.— A policy or other material submitted to the Board under this subsection may be prepared without regard to the limitations contained in this title, including the requirements concerning the levels of coverage and rates and the requirement that a price level for each commodity insured must equal the expected market price for the commodity as established by the Board. In the case of such a policy, the payment by the Corporation of a portion of the premium of the policy may not exceed the amount that would otherwise be authorized under subsection (e). “(3) Review and approval by the board.— A policy or other material submitted to the Board under this subsection shall be reviewed by the Board and, if the Board finds that the interests of producers are adequately protected and that any premiums charged to the producers are actuarially appropriate, shall be approved by the Board for reinsurance and for sale to producers as an additional choice at actuarially appropriate rates and under appropriate terms and conditions. The Corporation may enter into more than 1 reinsurance agreement with the approved insurance provider simultaneously to facilitate the offering of the new policies. “(4) Guidelines for submission and review.— The Corporation shall issue regulations to establish guidelines for the submission, and Board review, of policies or other material submitted to the Board under this subsection. At a minimum, the guidelines shall ensure the following: “(A) A proposal submitted to the Board under this subsection snail be considered as confidential commercial or financial information for purposes of section 552(b)(4) of title 5, United States Code, until approved by the Board. A proposal disapproved by the Board shall remain confidential commercial or financial information. “(B) The Board shall provide an applicant with the opportunity to present the proposal to the Board in person it the applicant so desires. 108 STAT. 3194 “(C) The Board shall provide an applicant with notification of intent to disapprove a proposal not later than 30 days prior to making the disapproval. An applicant that receives the notification may modify the application of the applicant. Any modification shall be considered an original application for purposes of this paragraph. “(D) Specific guidelines shall prescribe the timing of submission of proposals under this subsection and timely consideration by the Board so that any approved proposal may be made available to all persons reinsured by the Corporation in a manner permitting the persons to participate, if the persons so desire, in offering such a proposal m the first crop year in which the proposal is approved by the Board for reinsurance, premium subsidy, or other support offered by this title. “(5) Required publication.— Any policy, provision of a policy, or rate approved under this subsection shall be published as a notice in the Federal Register and made available to all persons contracting with or reinsured by the Corporation under the terms and conditions of the contract between the Corporation and the person originally submitting the policy or other material. “(6) Pilot cost of production risk protection plan.— “(A) In general.— The Corporation shall offer, to the extent practicable, a cost of production risk protection plan of insurance that indemnifies producers (including new producers) for insurable losses as provided in this paragraph. “(B) Pilot basis.— The cost of production risk protection plan shall— “(i) be established as a pilot project for each of the 1996 and 1997 crop years; and “(ii) be carried out in a number of counties that is determined by the Corporation to be adequate to provide a comprehensive evaluation of the feasibility, effectiveness, and demand among producers for the plan. “(C) Insurable loss.— An insurable loss shall be incurred by a producer if the gross income of the producer (as determined by the Corporation) is less than an amount determined by the Corporation, as a result of a reduction in yield or price resulting from an insured cause. “(D) Definition of new producer.— As used in this paragraph, the term ‘new producer’ means a person that has not been actively engaged in farming for a share of the production of the insured crop for more than 2 crop years, as determined by the Secretary. “(7) Additional prevented planting policy coverage.— “(A) In general.— Beginning with the 1995 crop year, the Corporation shall oner to producers additional prevented planting coverage that insures producers against losses in accordance with this paragraph. “(B) Approved insurance providers.— Additional prevented planting coverage shall be offered by the Corporation through approved insurance providers. “(C) Timing of loss.— A crop loss shall be covered by the additional prevented planting coverage if— 108 STAT. 3195 “(i) crop insurance policies were obtained for— “(I) the crop year the loss was experienced; and “(II) the crop year immediately preceding the year of the prevented planting loss; and “(ii) the cause of the loss occurred— “(I) after the sales closing date for the crop in the crop year immediately preceding the loss; and “(II) before the sales closing date for the crop in the year in which the loss is experienced. “(8) Pilot program of assigned yields for new PRODUCERS.— “(A) Program required.— For each of the 1995 and 1996 crop years, the Corporation shall carry out a pilot program to assign to eligible new producers higher assigned yields than would otherwise be assigned to the producers under subsection (g). The Corporation shall include in the pilot program 30 counties that are determined by the Corporation to be adequate to provide a comprehensive evaluation of the feasibility, effectiveness, and demand among new producers for increased assigned yields. “(B) Increased assigned yields.— In the case of an eligible new producer participating in the pilot program, the Corporation shall assign to the new producer a yield that is equal to not less than 110 percent of the transitional yield otherwise established by the Corporation. “(C) Eligible new producer.— The Secretary shall establish a definition of new producer for purposes of determining eligibility to participate in the pilot program. “(i) Adoption of Rates and Coverages.— The Corporation shall adopt, as soon as practicable, rates and coverages that will improve the actuarial soundness of the insurance operations of the Corporation for those crops that are determined to be insured at rates that are not actuarially sound, except that no rate may be increased by an amount of more than 20 percent over the comparable rate of the preceding crop year. “(j) Claims for Losses.— “(1) In general.— Under rules prescribed by the Corporation, the Corporation may provide for adjustment and payment of claims for losses. The rules prescribed by the Corporation shall establish standards to ensure that all claims for losses are adjusted, to the extent practicable, in a uniform and timely manner. “(2) Denial of claims.— “(A) In general.— Subject to subparagraph (B), if a claim for indemnity is denied by the Corporation or an approved provider, an action on the claim may be brought against the Corporation or Secretary only in the United States district court for the district in which the insured farm is located. “(B) Statute of limitations.— A suit on the claim may be brought not later than 1 year after the date on which final notice of denial of the claim is provided to the claimant “(3) Indemnification.— The Corporation shall provide approved insurance providers with indemnification, including 108 STAT. 3196costs and reasonable attorney fees incurred by the approved insurance provider, due to errors or omissions on the part of the Corporation. “(k) Reinsurance.— “(1) In general.— Notwithstanding any other provision of this title, the Corporation shall, to the maximum extent practicable, provide reinsurance to insurers approved by the Corporation that insure producers of any agricultural commodity under 1 or more plans acceptable to the Corporation. “(2) Terms and conditions.— The reinsurance shall be provided on such terms and conditions as the Board may determine to be consistent with subsections (b) and (c) and sound reinsurance principles. “(3) Share of risk.— The reinsurance agreements of the Corporation with the reinsured companies shall require the reinsured companies to bear a sufficient share of any potential loss under the agreement so as to ensure that the reinsured company will sell and service policies of insurance in a sound and prudent manner, taking into consideration the financial condition of the reinsured companies and the availability of private reinsurance. “(4) Rate.— The rate established by the Board to reimburse approved insurance providers and agents for the administrative and operating costs of the providers and agents shall not exceed— “(A) for the 1997 reinsurance year, 29 percent of the premium used to define loss ratio; “(B) for the 1998 reinsurance year, 28 percent of the premium used to define loss ratio; and “(C) for the 1999 reinsurance year, 27.5 percent of the premium used to define loss ratio. “(5) Cost and regulatory reduction.— Consistent with section 118 of the Federal Crop Insurance Reform Act of 1994, and consistent with maintenance of program integrity, prevention of fraud and abuse, the need for program expansion, and improvement of quality of service to customers, the Board shall alter program procedures and administrative requirements in order to reduce the administrative and operating costs of approved insurance providers and agents in an amount that corresponds to any reduction in the reimbursement rate required under paragraph (4) during the 5-year period beginning on the date of enactment of this paragraph. “(6) Agency discretion.— The determination of whether the Corporation is achieving, or has achieved, corresponding administrative cost savings shall not be subject to administrative review, and is wholly committed to agency discretion within the meaning of section 701(a)(2) of title 5, United States Code. “(7) Plan.— The Corporation shall submit to Congress a plan outlining the measures that will be used to achieve the reduction required under paragraph (5). If the Corporation can identify additional cost reduction measures, the Corporation shall describe the measures in the plan. “(l) Optional Coverages.— The Corporation may offer specific risk protection programs, including protection against prevented planting, wildlife depredation, tree damage and disease, and insect infestation, under such terms and conditions as the Board may determine, except that no program may be undertaken if insurance 108 STAT. 3197for the specific risk involved is generally available from private companies. “(m) Research.— “(1) In general.— Except as provided in paragraph (2), the Corporation may conduct research, surveys, pilot programs, and investigations relating to crop insurance and agriculture- related risks and losses including insurance on losses involving reduced forage on rangeland caused by drought and by insect infestation, livestock poisoning and disease, destruction of bees due to the use of pesticides, and other unique special risks related to fruits, nuts, vegetables, aquacultural species, forest industry needs (including appreciation), and other agricultural products as determined by the Board. “(2) Exception.— No action may be undertaken with respect to a risk under paragraph (1) if insurance protection against the risk is generally available from private companies. “(3) Evaluation.— After the completion of any pilot program under this subsection, the Corporation shall evaluate the pilot program and submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, a report of the operations of the pilot program, including the evaluation by the Corporation of the pilot program and the recommendations of the Corporation with respect to implementing the program on a national basis”.