Enclosure Page 2

FCIC Interpretation of Procedure

Risk Management Agency Interpretation of Federal Crop Insurance Corporation Provisions:

Subject: Request dated March 8, 2021, to the Risk Management Agency (RMA) for an interpretation 

of whether section 4 of the 2018 Whole-Farm Revenue Protection (WFRP) Pilot Policy authorizes an 

Approved Insurance Provider (AIP) to cancel a policy in the initial year of insurance or retroactively 

after the initial year of insurance has concluded.

The relevant policy provisions provided by the requester are section 4(a), (b), and (c):

4. Life of Policy, Termination, and Cancellation

(a) After we have accepted your application, you may not cancel this policy for the initial 

policy year.

(b) This is a continuous policy and will remain in effect for each succeeding policy year 

following the acceptance of the original application until canceled by you in accordance 

with the terms of the policy or by us. In accordance with section 5, FCIC may change the 

coverage provided from year to year.

(c) Either you or we may cancel this policy after the initial policy year by providing written 

notice to the other on or before the cancellation date.

Interpretation Submitted by Requestor(s)

The first requester’s interpretation of section 4 is that neither party can cancel the WFRP Policy during 

the initial policy year. Section 4(c) states that “[e]ither you or we may cancel this policy after the 

initial policy year ....” The first requester believes the use of the phrase “after” in Section 4(c), and 

the language in WFRP Handbook subparagraph 23(12) lends to the interpretation that the policy 

cannot be canceled by either party for the first year. Also, the first requester believes there is no 

language in section 4 or otherwise for either the insured or the AIP to cancel the policy for the initial 

policy year after the first year has concluded and to subsequently refund the premium paid by the 

insured for the initial policy year. The first requestor also interprets section 4 to mean that the AIP is 

not entitled to cancel an insured’s WFRP coverage for the initial policy year at any time, either during 

the initial policy year or retroactively after the initial policy year has ended. Furthermore, revisions to 

the policy can occur pursuant to sections 15(j), (k), and (l), but this section also does not allow for the 

cancellation of the policy.

The second requester’s interpretation of section 4(c) is that it permits an AIP to cancel the policy prior 

to the cancellation date upon written notice with or without a reason. In addition, section 4 generally 

is not applicable to the cancellation of or revisions to coverage that the company determines are 

necessary when it discovers errors in or cannot verify the information reported on the policyholder’s 

Schedule F form or when the information reported on the Schedule F form is not supported by 

verifiable records. Rather section 15(j), (k), and (l) authorize the company to revise coverage and 

modify indemnities retroactively when it discovers misreported information or errors in reporting.
Enclosure Page 3

FCIC Interpretation of Procedure

Federal Crop Insurance Corporation Determination

FCIC disagrees with the first requester’s interpretation that section 4 of the 2018 WFRP Pilot Policy 

serves as an absolute limit on the ability of the AIP to cancel the WFRP policy during the initial year 

of insurance. Furthermore, FCIC disagrees with the first requester that there are no circumstances in 

which the AIP may cancel a policy for the initial year of coverage, after the initial year has concluded. 

Section 3 of the 2018 WFRP Pilot Policy states eligibility requirements in order to receive insurance 

coverage. Meeting eligibility requirements is the ongoing responsibility of the insured at all times. 

Anytime the AIP requests additional information from the insured to verify previously reported 

information and the additional information affects the insured’s or farm operation’s eligibility for 

coverage, the AIP may conclude that the producer is not eligible for the crop insurance year, whether 

past or present.

FCIC agrees with the second requester’s interpretation that section 4(c) of the 2018 WFRP Pilot 

Policy allows an AIP to cancel a WFRP policy prior to the cancellation date with written notice. 

However, FCIC disagrees that the policy may be cancelled without reason. The Standard Reinsurance 

Agreement SRA states in section II(a)(3), “The Company may not cancel an eligible crop insurance 

contract held by a policyholder so long as the policyholder remains an eligible producer and the 

Company continues to write eligible crop insurance contracts within the State, except as authorized by 

FCIC ....” But, section 4 is not applicable when the cancellation is necessary due to the AIP’s 

inability to determine eligibility or verify information reported by the insured.

In accordance with section 33(a)(1) of the WFRP Pilot Policy, this FCIC interpretation is generally 

applicable and binding in any mediation or arbitration. In accordance with section 33(a)(1), any 

appeal of this interpretation must be in accordance with 7 C.F.R. part 11.