66574 Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Rules and Regulations 

(12) Paprika color—derived from 

dried powder or vegetable oil extract of 

Capsicum annuum L. 

(13) Pumpkin juice color—derived 

from Cucurbita pepo L. or Cucurbita 

maxima Duchesne. 

(14) Purple sweet potato juice color— 

derived from Ipomoea batatas L. or 

Solanum tuberosum L. 

(15) Red cabbage extract color— 

derived from Brassica oleracea L. 

(16) Red radish extract color—derived 

from Raphanus sativus L. 

(17) Saffron extract color—derived 

from Crocus sativus L. 

(18) Turmeric extract color—derived 

from Curcuma longa L. 

* * * * * 

(h) Glycerin (CAS # 56–81–5)— 

produced from agricultural source 

materials and processed using biological 

or mechanical/physical methods as 

described under § 205.270(a). 

* * * * * 

Dated: December 18, 2018. 

Bruce Summers, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. 2018–27792 Filed 12–26–18; 8:45 am] 

BILLING CODE 3410–02–P 

DEPARTMENT OF AGRICULTURE 

Federal Crop Insurance Corporation 

7 CFR Part 400 

[Docket No. FCIC–14–0001] 

RIN 0563–AC45 

General Administrative Regulations; 

Interpretations of Statutory Provisions, 

Policy Provisions, and Procedures 

AGENCY: Federal Crop Insurance 

Corporation, USDA. 

ACTION: Final rule. 

SUMMARY: The Federal Crop Insurance 

Corporation (FCIC) finalizes the General 

and Administrative Regulation Subpart 

X- Interpretations of Statutory and 

Regulatory Provisions (Subpart X) to 

incorporate interpretations of 

procedures previously issued and 

administered in accordance with 

Manager’s Bulletin MGR–05–018, and to 

provide a mechanism for interpretations 

of policy provisions that are not 

codified in the Code of Federal 

Regulations. The effect of this action is 

to provide requestors with information 

on how to request a final agency 

determination or an interpretation of 

FCIC procedures within one 

administrative regulation, and bring 

consistency and clarity to the processes 

used and existing provisions. 

DATES: This rule is effective January 28, 

2019. 

ADDRESSES: Anyone can to search the 

electronic form of all comments 

received for any dockets by the name of 

the person submitting the comment (or 

signing the comment, if submitted on 

behalf of an association, business, labor 

union, etc.). You may review the 

complete User Notice and Privacy 

Notice for Regulations.gov at http://

www.regulations.gov/#!privacyNotice. 

FOR FURTHER INFORMATION CONTACT: 

Francie Tolle, Director, Product 

Management, Product Administration 

and Standards Division, Risk 

Management Agency, United States 

Department of Agriculture, Beacon 

Facility, Stop 0812, Room 421, PO Box 

419205, Kansas City, MO 64141–6205, 

telephone (816) 926– 7730. 

SUPPLEMENTARY INFORMATION: 

Background 

This rule finalizes changes to Subpart 

X that were published by FCIC on 

March 18, 2015, as a notice of proposed 

rulemaking in the Federal Register at 80 

FR 14030–14033. The public was 

afforded 30 days to submit comments 

after the regulation was published in the 

Federal Register. 

A total of 18 comments were received 

from 5 commenters. The commenters 

included persons or entities from the 

following categories: Financial, 

insurance provider, legal, trade 

association, and other. The public 

comments received regarding the 

proposed rule and FCIC’s responses to 

the comments are as follows: 

Comment: A commenter stated 

Subpart X—Interpretations of statutory 

provisions could provide asset 

management improvements. Driving 

these types of assets would be a 

dynamic and unprecedented 

improvement in the field of asset 

management. 

Response: FCIC does not understand 

the comment and does not see a 

connection between asset management 

and interpretations of policy and 

procedures. Subpart X intended to 

ensure that the Federal crop insurance 

program policy provisions and 

procedures are interpreted in a 

consistent manner for all participants. 

No change has been made. 

Comment: A commenter questioned 

the use of ‘‘calendar year(s)’’ in 

§ 400.766(a)(1) when § 400.766(a)(2) 

refers to ‘‘crop years’’. For the calendar 

years 2011–2014 used in the example, 

these could include policies for crop 

years from 2010–2016, depending on 

the time of the calendar year the request 

was submitted. The commenter 

suggested only referencing crop years in 

these two sections. 

Response: FCIC agrees that the use of 

the term calendar year can be confusing 

since all crop insurance, except for 

Whole-Farm Revenue Protection, is 

conducted on a crop year basis. Further, 

although crop years may differ, since 

the opinion is about a specific provision 

in a policy and effects producers with 

that policy, crop years is more 

appropriate. FCIC has revised the 

provisions accordingly. 

Comment: A commenter stated in 

proposed rule § 400.766(a)(2), FCIC 

states that it will reject requests for 

interpretations of crop year policy 

provisions that are older than four years 

prior to the calendar year in which the 

request was submitted. The commenter 

did not understand the purpose of this 

time limit. It is not unusual for litigation 

or arbitration to drag on for quite some 

time due to continuances, changes in 

attorneys, changes in arbitrators, etc. 

There may be situations in which it 

does not become clear that an 

interpretation of a policy provision or 

procedure is necessary until the time 

limit set forth in this section has already 

passed, particularly if the dispute 

involves a claim overpayment 

discovered in a subsequent crop year. 

As a result, the commenter believed this 

time limit should be stricken or revised 

to include any crop year(s) of policies 

subject to current litigation or 

arbitration. 

Response: As stated above, FCIC is 

moving to a crop year basis instead of 

a calendar year basis. However, FCIC 

does not agree the time limit should be 

stricken or revised to include any crop 

years of policies subject to current 

litigation or arbitration. The policy 

provisions require filing of a request for 

mediation, arbitration or litigation 

within one year of the determination by 

the insurance provider in the event of a 

dispute. The current time limit is set to 

allow an additional two years to pass 

before an interpretation must be 

requested to permit time for the appeals 

process to proceed. FCIC believes that 

most proceedings initiated within oneyear of a determination that is in 

dispute would be readily able to request 

an interpretation within the timeframes 

established by this regulation. Further, 

the published interpretations state that 

to the extent the language in the 

provisions interpreted is identical to the 

language applicable for any other crop 

year, including previous crop years, the 

same interpretation can be applied to 

such other crop year provided the 

person seeking to use the published 

interpretation for a different crop year 

provided that the language of the 


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provisions is identical. Therefore, to the 

extent that policy language is the same, 

interpretations made for one year may 

apply to numerous years. No change has 

been made. 

Comment: A commenter 

recommended the wording in 

§ 400.766(a)(3) be changed to ‘‘. . . 

starting with the 2014 crop year, you 

must submit . . .’’ 

Response: FCIC agrees and has 

revised the provisions accordingly. 

Comment: A commenter 

recommended the wording in 

§ 400.766(b)(2) be changed to ‘‘. . . 

matters of general applicability and are 

not. . .’’ 

Response: FCIC agrees with the 

revisions, however this provision has 

been moved and can now be found in 

§ 400.766(b)(5). 

Comment: A commenter stated, the 

proposed rule neither defines ‘‘nullify’’ 

or ‘‘nullification’’ nor explains the legal 

process by which FCIC will nullify a 

mediation, arbitration, or judicial 

decision. Is the term ‘‘nullify’’ 

synonymous with the term ‘‘vacate’’ as 

used in the Federal Arbitration Act 

(‘‘FAA’’)? Which division within the 

RMA Compliance Division will manage 

the nullification process? Will the 

insurance provider or policyholder be 

afforded appeal rights if FCIC nullifies 

an award? If a policyholder disputes the 

nullification of an award, does a cause 

of action lie against the insurance 

provider or FCIC? Because the proposed 

rule does not describe the process by 

which FCIC will nullify an award, the 

commenter cannot adequately evaluate 

the impact of the proposed rule or 

assess its risk in the event nullification 

occurs. 

Another commenter also questioned 

whether FCIC has the authority to 

nullify an arbitration award as set forth 

in proposed section § 400.766(b). On a 

prefatory note, FCIC is not a party to the 

Common Crop Insurance Policy Basic 

Provisions (Basic Provisions), is not a 

party to arbitration arising under the 

policy and, consequently, may not 

intervene in an arbitration proceeding. 

Assuming arguendo that FCIC, as a nonparty, may vacate an arbitration award, 

its ability to do so is subject to Federal 

Arbitration Association (FAA), which 

governs arbitration proceedings, 

including judicial review, arising under 

section 20 of the Basic Provisions. With 

respect to the vacation or modification 

or arbitration awards, section 10 of the 

FAA provides, in pertinent part: 

(a) In any of the following cases the 

United States court in and for the 

district where in the award was made 

may make an order vacating the award 

upon the application of any party to the 

arbitration— 

(1) where the award was procured by 

corruption, fraud, or undue means: 

(2) Where there was evident partiality 

or corruption in the arbitrators, or either 

of them; 

(3) where the arbitrators were guilty of 

misconduct in refusing to postpone the 

hearing, upon sufficient cause shown, or 

in refusing to hear evidence pertinent 

and material to the controversy; or any 

other misbehavior by which the rights of 

any party have been prejudiced; or 

(4) where the arbitrators exceeded 

their powers, or so imperfectly executed 

them that a mutual, final, and definite 

award upon the subject matter 

submitted was not made. 

9 U.S.C. 10. The Supreme Court has 

held that the FAA’s grounds for vacating 

any award are exclusive. Section 10 

does not empower FCIC to nullify an 

arbitration award simply because the 

arbitrator did not enforce or request a 

final agency determination. 

The commenter also believed section 

10(a)(4) of the FAA is the only provision 

tangentially related to an arbitrator’s 

enforcement of a final agency 

determination, and case law 

demonstrates that FCIC cannot rely on 

section 10(a)(4) to nullify an arbitration 

award. When a party invokes section 

10(a)(4) of the FAA as a basis for 

vacating an award on the basis that the 

arbitrator exceeded his power, the court 

must: 

‘‘. . . determine if the form of the 

arbitrator’s award can be rationally 

derived either from the agreement 

between the parties or from the parties’ 

submissions to the arbitrators, and we 

do not revise the terms of the award 

‘‘unless they are ‘completely 

irrational.’ ’’ 

The commenter stated this standard of 

reviews is so deferential, that a Court 

may overturn an award only if there is 

‘‘absolutely no support at all in the 

record justifying the arbitrator’s 

determinations.’’ (A court may not 

overrule the arbitrator simply because it 

disagrees. ‘‘There must be absolutely no 

support at all in the record.’’) Thus, 

even if an arbitrator does not apply a 

final agency determination to a 

particular dispute, case law suggests 

that this alone does not merit vacating 

an award. 

Response: The definition of ‘‘null’’ 

and ‘‘nullification’’ is not provided for 

in the administrative regulation as it 

intends the common meaning to apply. 

The term ‘‘null’’ is defined in MerriamWebster’s Online Dictionary, as ‘‘having 

no legal or binding force; invalid.’’ This 

means that if an arbitration award was 

based upon an interpretation of a policy 

provision or procedure that was not 

provided by FCIC, the arbitration award 

would have no legal or binding force 

and would be invalid. 

While FCIC is not a party to the 

insurance contract, this is a Federal crop 

insurance program, and FCIC is the 

regulator of the program. It is FCIC’s 

duty and obligation to ensure 

compliance with all policy and 

procedure, especially since taxpayer 

dollars are used in part to fund the 

program. Government funds can only be 

spent in the manner authorized by law. 

In the past, one problem in the 

program that was reoccurring was 

inconsistent interpretations of policy 

and procedures by arbitrators and 

courts, resulting in the inequitable 

application of the policy provisions and 

procedures based on geography. As a 

result, Congress enacted section 506(r) 

of the Federal Crop Insurance Act (Act), 

which mandates that FCIC will provide 

an interpretation of all statutes and 

regulations. This ensures that taxpayer 

dollars are spent in accordance with the 

law. 

With respect to the American 

Arbitration Act, there is a long-standing 

legal principle of statutory construction 

that states that later in time statutes 

preempt earlier enacted statutes. That is 

the case here. Section 506(r) of the Act 

was enacted after the American 

Arbitration Act and to the extent there 

is a conflict, section 506(r) of the Act 

takes precedence. Therefore, while the 

American Arbitration Act may apply to 

certain circumstances, it cannot be used 

to require the payment of awards that 

would use taxpayer dollars that are not 

authorized by law. Those provisions of 

the American Arbitration Act that could 

be interpreted to require the payment of 

awards that are otherwise not 

authorized by law are not applicable. 

Congress has determined that FCIC 

interprets its statutes and regulations, 

but it left to FCIC the manner in which 

it does so. In carrying out that mandate, 

FCIC promulgated Subpart X to 

administer the process of obtaining the 

requisite interpretations and, under 

prevailing Supreme Court precedence, 

FCIC’s administration of section 506(r) 

of the Act is to be given deference if it 

is reasonable and not arbitrary, 

capricious, or not in accordance with 

the law. FCIC’s determination that there 

must be consequences for failure to 

obtain an interpretation when required 

is reasonable. Further, since all parties 

to the legal proceeding have the 

obligation to seek an interpretation 

when there is a dispute regarding the 

meaning of a provision, the 

consequences cannot unfairly affect one 

party over another. Nullification of an 


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award has been the only process FCIC 

has determined that will not unfairly 

affect one party over another. It simply 

resets the process and the appeal 

proceeds using the interpretation 

obtained from FCIC. Requiring 

nullification of an award when no final 

agency determination or FCIC 

interpretation has been sought or it has 

been disregarded is reasonable and not 

arbitrary and capricious or is in 

accordance with the law. 

Requiring FCIC to provide 

interpretations of statutes and 

regulations ensures that all producers 

nationwide are treated the same. FCIC 

determined the only way to effectuate 

this provision and ensure that its 

interpretations are binding on all 

parties, including in the appeals 

process, is to require that awards that 

failed to obtain an interpretation or 

disregarded an interpretation will be 

nullified. Therefore, if any party in a 

dispute believes an agreement or award 

was rendered based on an interpretation 

of a statutory or regulatory provision 

that is in dispute and an official 

interpretation from FCIC was not sought 

or was disregarded, it is incumbent 

upon the aggrieved party to request from 

FCIC whether an official interpretation 

was sought or disregarded. 

Comment: A commenter stated 

history suggests that FCIC does not 

nullify arbitration awards if the parties 

do not request a final agency 

determination or the arbitrator does not 

abide by the final agency determination. 

Instead, RMA issues compliance 

findings directed at the insurance 

provider and denies reinsurance on any 

amount awarded to the policyholder. 

Although this sanction may be justified 

if an insurance provider does not 

request a final agency determination or 

offers an argument contrary to FCIC 

interpretation of policy or procedures, 

this penalty is unconscionable if the 

insurance provider obtains either a final 

agency determination or the testimony 

of an FCIC employee and the arbitrator 

disregards the FCIC’s interpretation. The 

Standard Reinsurance Agreement (SRA) 

authorizes the denial of reinsurance or 

the imposition of other penalties if an 

insurance provider does not comply 

with the SRA or FCIC policies and 

procedures. If an insurance provider 

obtains and offers a final agency 

determination during a legal 

proceeding, and the arbitrator, judge or 

jury ignores the final agency 

determination, the insurance provider 

has not violated the SRA and may not 

be penalized. 

Response: FCIC agrees that if an 

insurance provider obtains a final 

agency determination or FCIC 

interpretation and it is disregarded by 

the person hearing the appeal, or if no 

final agency determination or FCIC 

interpretation has been sought by any 

party, the proper remedy is nullification 

of the award under Subpart X. 

Comment: A commenter recognized 

that FCIC expects arbitrators, judges, 

and juries to adhere to a final agency 

determination’s interpretation of 

policies and procedures. However, the 

commenter did not believe that an 

insurance provider may force an 

arbitrator or judge to halt proceedings 

and request a final agency 

determination if a dispute arises as to 

the meaning of a policy or procedure. At 

best, an insurance provider may request 

that the arbitrator motion the court for 

a stay in the proceedings. An insurance 

provider cannot control whether or not 

an arbitrator or judge grants such a 

request or motion, and the refusal of an 

arbitrator or judge to stay proceeding 

should not be the basis for sanctioning 

an insurance provider. 

Response: FCIC agrees an insurance 

provider cannot force an arbitrator or 

judge to halt proceedings and request a 

final agency determination or FCIC 

interpretation if a dispute arises as to 

the meaning of a policy or procedure. 

However, an insurance provider may 

request a stay in the proceedings. As 

stated above, while no judge or 

arbitrator may be forced to delay a 

proceeding for the parties to obtain a 

final agency determination or FCIC 

interpretation, this rule puts all persons 

involved in the appeal on notice that 

failure to obtain a final agency 

determination or FCIC interpretation 

when there is a dispute regarding the 

meaning of a provision will result in the 

nullification of any agreement or award. 

It is incumbent upon the aggrieved party 

to request from FCIC whether an official 

interpretation was sought or 

disregarded. 

Comment: A commenter stated FCIC 

should clarify the process for 

nullification of an award or deem it to 

occur automatically. The proposed rule 

indicates that the failure to obtain or 

adhere to a final agency determination 

will result in nullification of any award. 

However, it is not clear from the 

proposed rule how a party can seek 

nullification of an arbitration award, or 

whether nullification is a self-executing, 

automatic occurrence. 

In Great American Ins. Co. v. Moye, a 

Federal district court ruled that the 

Federal Arbitration Act (FAA) (9 U.S.C. 

1 et seq.) applies to crop insurance 

arbitrations. The FAA severely limits a 

reviewing court’s ability to review an 

arbitration award. In that case, which 

has been cited by many cases since, the 

court ruled that a ‘‘court will not sit as 

the arbitrator to re-evaluate the merits,’’ 

and that ‘‘an arbitrator does not exceed 

his authority every time he makes an 

interpretive error.’’ Therefore, even 

though the policy terms and regulations 

in Subpart X require nullification of an 

award if the arbitrator engages in 

unauthorized interpretation, the FAA 

requires a reviewing court to defer to the 

arbitrator’s judgment except in 

extraordinary circumstances. 

The commenter stated it is clear that 

FCIC intends that the parties have some 

process for determining whether an 

arbitration award is nullified, as it 

recently stated in FAD–232, ‘‘the policy 

allows for nullification of the award if 

the party seeking nullification can show 

that the inconsistent interpretation 

resulted in an improper award being 

made.’’ It is not clear where there is a 

process available for a party seeking 

nullification to make that type of 

showing. Once the arbitrator has 

rendered the final award under 

American Arbitration Association 

(AAA) rules, the arbitrator’s duties are 

complete (except in very specific 

circumstances requiring revision for 

obvious mathematical errors). AAA 

rules do provide a procedure for 

appeals, but only in the event that both 

parties agree, which would be unlikely 

in the event one party is satisfied with 

an award in its favor. 

FCIC should revise the proposed rule 

so that nullification is an automatic 

process, where an arbitration award 

containing unauthorized interpretation 

is automatically void and unenforceable 

in Federal Court. Alternatively, FCIC 

should make it clear where and how the 

process for determining nullification 

must occur, whether that be before the 

arbitrator who issued the award, 

through the AAA appeals process made 

mandatory for crop insurance cases, or 

through a reviewing court. Otherwise, 

nullification will usually be 

unenforceable in practice. 

Response: While the courts have 

agreed that the American Arbitration 

Act applies in arbitrations, its 

application cannot be absolute. 

Taxpayer dollars are used to fund the 

Federal crop insurance program and 

FCIC has an obligation to ensure such 

funds are expended in accordance with 

policy and procedure. Congress 

strengthened this obligation by 

imposing on FCIC the express mandate 

to provide interpretations of law and 

regulations in section 506(r) of the Act. 

This later in time statute supersedes the 

American Arbitration Act preclusion 

against reviewing arbitrator’s 

interpretations. 


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FCIC agrees that if there is a failure to 

obtain, or adhere to, a final agency 

determination or FCIC interpretation, 

any award is nullified but there is no 

way for anyone to know or the parties 

may not agree whether such a failure 

existed. Therefore, FCIC has revised this 

rule to allow persons to obtain a 

determination by FCIC when that 

person believes that a failure to comply 

with this subpart took place during an 

arbitration by not obtaining, adhering, 

or requesting a final agency 

determination or FCIC interpretation. 

Once FCIC determines that a final 

agency determination or FCIC 

interpretation was required in an 

arbitration or litigation, the provisions 

are revised to specify the award is 

automatically nullified. 

Comment: The commenter stated 

there is a word missing after ‘‘any 

other’’ in the first sentence of proposed 

rule § 400.766(c)(1). 

Response: FCIC has revised § 400.766 

and this phrase is no longer used. 

Therefore, the comment is not 

applicable. 

Comment: A commenter 

recommended the wording in 

§ 400.767(b)(1) be changed to ‘‘. . . 

proceeding (e.g., mediation . . .’’ 

Response: FCIC agrees and has 

revised the provision accordingly. 

Comment: A commenter suggested 

FCIC clarify that nullification of an 

arbitration award occurs when the 

decision made by the arbitrator 

disregards, or the parties fail to obtain, 

any form of interpretation from FCIC, 

not just those that are final agency 

determinations. The proposed rule 

provides that the parties’ failure to 

submit a timely request for a final 

agency determination results in 

‘‘nullification of any agreement or 

award’’ (proposed § 400.767(b)(3)(ii)(B)). 

The proposed rule also provides that 

‘‘failure of the National Appeals 

Division, arbitrator, or mediator to 

adhere to the final agency determination 

provided under this subpart will result 

in the nullification of any award or 

agreement in arbitration or mediation.’’ 

The commenter agreed failure to obtain 

or adhere to a final agency 

determination should result in 

nullification of the award, but the 

commenter suggested FCIC revise the 

final rule so that it is clear that the 

failure to obtain or adhere to any type 

of interpretation from FCIC results in 

nullification. Another commenter stated 

final agency determinations are not the 

only form of interpretation that FCIC 

provides under existing processes nor 

will they be the only form under the 

proposed revisions to Subpart X. In 

FAD–225, FCIC acknowledged that the 

agency has multiple avenues under 

which it may deliver binding 

interpretations of policy and procedure, 

including formal interpretations of 

procedure under Manager’s Bulletin 

MGR–05–018 and witness testimony 

pursuant to 7 CFR part 1, subpart H. 

FCIC further indicated, ‘‘any 

interpretation provided by FCIC, in 

writing or orally, will be binding in any 

mediation or arbitration. Subsequently, 

the failure to obtain the required 

interpretation from FCIC or if an 

arbitrator disregards an interpretation 

provided by FCIC, the award is 

nullified.’’ As written, the proposed rule 

does not clearly state that the failure to 

obtain or adhere to other forms of 

interpretations from FCIC will result in 

nullification. Since, the agency has 

already made clear in a binding final 

agency determination that it is so, FCIC 

should incorporate that principle into 

the final rule. 

Response: FCIC agrees with the 

commenter. Section 20(a)(1)(ii) of the 

Common Crop Insurance Policy Basic 

Provisions states ‘‘Failure to obtain any 

required interpretation from FCIC will 

result in the nullification of any 

agreement or award.’’ Therefore, FCIC 

has revised the relevant provisions to 

clarify that FCIC interpretations may 

take other forms and the nullification 

provisions apply to all FCIC 

interpretations. However, FCIC has 

revised the language to state that if an 

official interpretation from FCIC was not 

sought or was disregarded it is 

incumbent upon the aggrieved party to 

request a determination of whether such 

interpretation was required or 

disregarded and, if it was, the award is 

automatically nullified. 

Comment: A commenter stated 

§ 400.767(b)(3)(ii) of the proposed rule 

is missing ‘‘or interpretations of 

procedure or policy provision not 

codified in the Code of Federal 

Regulations’’ before ‘‘may result in’’. 

Response: As stated above, FCIC has 

revised the provisions to apply to all 

FCIC interpretations. However, FCIC 

determined these provisions regarding 

nullification are more appropriately 

contained in § 400.766 and has revised 

the provisions accordingly. 

Additionally, FCIC has revised the 

regulation to define ‘‘FCIC 

interpretation’’ as an interpretation of a 

policy provision not codified in the 

Code of Federal Regulations or any 

procedure used in the administration of 

any Federal crop insurance program. 

Therefore, any references to 

‘‘interpretations of procedure or policy 

provision not codified in the Code of 

Federal Regulations’’ have been 

removed and replaced with the term 

‘‘FCIC interpretation’’ throughout the 

regulation. 

Comment: A commenter requested 

that FCIC delete the reference to 

nullification of arbitration awards 

contained § 400.767(b). Language, 

which mirrors this provision, is already 

contained in the Basic Provisions, so it 

is redundant to include the reference to 

nullification in this rule. 

Response: Proposed section 

400.767(b) reiterates and expands the 

provisions in section 20(a)(1)(ii) of the 

Basic Provisions which simply states 

that a failure to obtain any required 

interpretation from FCIC will result in 

the nullification of any agreement or 

award. FCIC has revised the provisions 

to include requests to be made to FCIC 

regarding whether there has been noncompliance with section 20 of the Basic 

Provisions and Subpart X and failure of 

the National Appeals Division, 

arbitrator, mediator, or judge to adhere 

to the final agency determination or 

FCIC interpretation provided under this 

subpart will result in the nullification of 

any award or agreement in arbitration or 

mediation. However, as stated above, all 

these provisions regarding nullification 

have been moved to § 400.766. 

Comment: A commenter stated FCIC’s 

stated purpose for promulgating the new 

regulations is to ‘‘clarify existing 

provisions, eliminate redundancies, 

remove or update obsolete references, 

simplify the regulation to address final 

agency determinations and 

interpretations of procedures or policy 

provisions not codified in the Code of 

Federal Regulations in the same 

regulation, simplify program 

administration, and improve clarity of 

the requestor and FCIC obligations.’’ 

The commenter supported this worthy 

goal. However, there are several 

portions of the proposed rule which the 

commenter believed require revision or 

clarification so that the new rule is 

compatible with the practicalities of 

policyholder and insurance provider 

disputes and arbitration proceedings. 

The commenter noted the proposed 

rule describes several types of 

interpretations by FCIC, including final 

agency determinations and 

interpretations of procedure. The 

commenter stated the proposed rule will 

promote unnecessary litigation, since it 

provides that no one may request an 

interpretation without first initiating 

arbitration, suit, or mediation (see 

proposed § 400.767(b)). 

Final agency determinations and 

interpretations of procedure from FCIC 

should be available to program 

participants as a tool to resolve disputes 

before formal dispute resolution 

processes commence, to avoid costly 


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and possibly unnecessary arbitration or 

litigation proceedings. There are times 

when the policy terms, procedure, or 

how policies and procedures apply to 

specific factual situations are not 

entirely clear, and an insurance 

provider must seek guidance from FCIC. 

Those instances may occur during the 

adjustment of a claim, or when a 

policyholder disagrees with an 

insurance provider determination, but 

has not yet filed a Demand for 

Arbitration. It has been the commenter’s 

experience that in those cases, a formal 

interpretation from RMA can help avert 

or resolve a dispute without having to 

resort to arbitration, which can be costly 

for both parties. For that reason, the 

commenter suggested FCIC remove from 

the final rule the requirement that 

arbitration be initiated prior to 

submission of the request for 

interpretation. 

Another commenter stated proposed 

rule § 400.767(b) limits requests for 

interpretations to formal judicial review, 

mediation, or arbitration. There are 

frequently situations where insurance 

providers may need binding 

clarification of FCIC policies or 

procedures to ensure that they are 

accurately administering policies in a 

uniform manner. It is a benefit to 

insurance providers, insureds, and the 

program to be able to submit such 

requests before the expense and 

exposure of adversarial proceedings 

takes place. Although there are other 

means which insurance providers may 

use to request an interpretation, they 

may be inadequate because they do not 

contain the 90-day time limit imposed 

by the final agency determination 

process and may not result in published 

interpretations. As a result, the 

commenter believed this section should 

be deleted or revised to carve out a 

separate right for insurance providers to 

request interpretations of policy 

provisions or procedures even if they 

are not related to a formal arbitration or 

mediation. 

Response: FCIC agrees and has 

removed the requirement that formal 

judicial review, mediation, or 

arbitration must be initiated before a 

final agency determination or FCIC 

interpretation can be requested. 

Comment: A commenter stated 

language in the proposed rule suggests 

that only the party who initiated 

arbitration or suit can request an 

interpretation from FCIC. As currently 

worded, only the party who actually 

initiates the legal proceeding may 

request a final agency determination or 

an interpretation of procedure. A 

defendant or arbitration respondent 

cannot (see proposed § 400.767(b): ‘‘You 

may request . . . only if you have 

legally filed or formally initiated. . .’’). 

Both parties to an arbitration should be 

permitted to request an interpretation 

from FCIC. It is not uncommon for 

parties to disagree about whether an 

interpretation is necessary, and in those 

cases, one party may need to seek the 

interpretation unilaterally. Further, 

respondents in arbitration and 

defendant in suits, which in most cases 

will be the insurance providers, have 

just as much a right to avail themselves 

of FCIC’s interpretation process as 

claimants/plaintiffs. 

Response: Either party may request an 

interpretation, not just the party that 

initiated the proceeding. Further, as 

stated above, parties no longer have to 

wait until arbitration, mediation or 

judicial review before a request may be 

made. The language has been revised 

accordingly. 

Comment: A commenter stated the 

new request timing requirements in 

proposed § 400.767(b)(3) will conflict 

with certain AAA rules and be 

impractical in many cases. FCIC should 

clarify how the interpretation request 

process should proceed in those cases. 

Section 20 of the Basic Provisions (7 

CFR 457.8) provides that the rules of the 

American Arbitration Association 

(AAA) apply to disputes regarding 

insurance provider determinations. The 

AAA Commercial Arbitration Rules 

contain a set of ‘‘Expedited Procedures’’ 

that apply in cases where the amount in 

controversy is $75,000 or less. Those 

Expedited Procedures require that the 

hearing occur within 30 days of the 

appointment of the arbitrator. The 

proposed rule requires that all 

interpretation requests be submitted ‘‘90 

days before the date the mediation, 

arbitration or litigation in which the 

interpretation will be used is scheduled 

to begin’’ (§ 400.767(b)(3)), but not until 

after arbitration has commenced 

(§ 400.767(b)). In cases where the AAA 

Expedited Procedures apply, it would 

be impossible for the parties to comply 

with those conflicting requirements. 

The commenter suggested FCIC either 

remove the timeliness requirement, or 

state clearly in the final rule that any 

AAA rule that does not allow the parties 

sufficient time to request an 

interpretation prior to the hearing is in 

conflict with the policy terms and does 

not apply to crop insurance arbitrations. 

A commenter also stated the new 

request timing requirements in 

§ 400.767(b)(3) will be impractical in 

many cases. FCIC should clarify the 

meaning of ‘‘proceeding’’ in 

§ 400.767(b)(3)(iii) to ensure that 

necessary interpretations from the 

agency are available in all cases. Even 

in cases where the Expedited 

Procedures do not apply, the timeliness 

rule will cause difficulty. It is not 

always clear at the outset of an 

arbitration that the dispute involves a 

matter of interpretation. Arbitration 

demands typically contain only a 

cursory description of the dispute and it 

is not until the parties have engaged in 

some exchange of discovery materials or 

legal briefing that the parties identify a 

dispute over interpretation. It is not 

uncommon for that to occur within 90 

days of the arbitration hearing date. 

The proposed rule contains a 

contingency to allow the arbitrator, 

mediator, or judge to request an 

interpretation in instances when an 

interpretation dispute arises ‘‘during the 

mediation, arbitration, or litigation 

proceeding.’’ It is not clear whether the 

term ‘‘proceeding’’ as used in the 

proposed rule refers only to the 

mediation, arbitration hearing, or trial, 

or whether the term refers to any 

proceedings, including discovery and 

briefing occurring in the course of the 

mediation, arbitration, or litigation. 

FCIC should clarify the meaning of that 

term. 

The commenter suggested the final 

rule allow the parties to seek 

interpretations whenever a dispute 

arises in the process. If FCIC has a 

compelling reason to restrict require 

requests from the parties to be 

submitted 90-days prior to the hearing, 

the final rule should provide an avenue 

for making a request if an interpretation 

dispute arises within 90-days of the 

hearing. 

Response: The AAA rules only apply 

to the extent they do not conflict with 

the policy. The policy requires 

obtaining an interpretation of policy and 

procedure if there is a dispute regarding 

its meaning and Subpart X prescribes 

how such requests are to be made. 

Therefore, Subpart X supersedes the 

AAA rules if there is a conflict. Further, 

the 90-day time-period is necessary to 

allow FCIC time to provide an 

interpretation in writing given its 

limited resources. In addition, as stated 

above, FCIC has revised the rule to 

allow requests for interpretations be 

made at any time, not just when 

mediation, arbitration or litigation has 

been initiated. This should mitigate the 

timing issues in many cases. However, 

when it is discovered that an 

interpretation is required after the 

proceedings have been initiated, FCIC 

acknowledges there are times when 

such a time limit is impracticable. 

Therefore, FCIC has revised the rule to 

provide some flexibility when cases are 

operating under the expedited 

procedures under AAA rules or there is 


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an appeal between a producer and RMA 

before NAD. However, these appeals 

processes have set deadlines and FCIC 

is adding flexibility to accommodate 

them but in all other cases, the parties 

have the flexibility to set the actual date 

of the mediation, arbitration, etc. 

Therefore, FCIC is maintaining the 90- 

day rule for all other proceedings to 

allow FCIC sufficient time to go through 

the administrative process of making an 

interpretation. Further, FCIC has added 

a definition of ‘‘proceeding’’ that 

clarifies that the proceeding commences 

on the day the complaint or notice of 

appeal is filed for arbitration or 

litigation and ends when the decision 

has been rendered so it encompasses the 

discovery process. This should allow 

the parties sufficient time to make a 

request 90 days prior to the date of 

mediation, hearing, arbitration or trial. 

As noted by the commenter, the 

proposed rule contains a contingency to 

allow the NAD hearing officer, 

arbitrator, mediator, or judge, to request 

an interpretation in instances when a 

dispute arises during the mediation, 

arbitration, or litigation proceeding. 

Comment: A commenter 

recommended the wording in 

§ 400.767(c) be changed to ‘‘. . . 

opposing interpretations, a joint 

request. . .’’ 

Response: FCIC agrees and has 

revised the provisions accordingly. 

Comment: A commenter 

recommended the wording in 

§ 400.768(a) be changed to ‘‘. . . 

regarding, or that contains, specific 

factual information. . .’’ 

Response: FCIC agrees and has 

revised the provisions accordingly. 

Comment: A commenter 

recommended the wording in 

§ 400.768(a)(2) be changed to ‘‘. . . 

those are fact-specific and could. . .’’ 

Response: FCIC agrees and has 

revised the provisions accordingly. 

Comment: A commenter 

recommended FCIC not forbid parties 

seeking interpretation requests from 

offering hypothetical examples. The 

proposed rule provides at 

§ 400.768(a)(2), ‘‘FCIC will not consider 

any examples provided in your 

interpretation because those are fact 

specific and could be construed as a 

finding of fact by FCIC,’’ and that FCIC 

will provide any examples that are 

necessary. Parties should be permitted 

to provide hypothetical examples. 

Because an arbitrator cannot decide 

whether or how a policy provision 

applies to a specific set of facts, 

restricting the parties from using 

illustrative hypotheticals will make it 

difficult for FCIC to render 

interpretations regarding whether how 

policy provisions apply with enough 

specificity for the arbitrator to render a 

compliant award. 

Section 20(a)(1) of the Basic 

Provisions exempts from the arbitrator’s 

authority any disputes ‘‘regarding 

whether a specific policy provision or 

procedure is applicable to the situation’’ 

or ‘‘how it is applicable.’’ If the 

arbitrator does not have authority to 

determine how procedure applies to a 

specific factual situation, the parties 

must be able to request an interpretation 

from FCIC with enough specificity so 

that the response gives the arbitrator 

clear direction on how the policy terms 

apply to that type of situation. The best 

way to do that is with an analogous 

hypothetical. In many cases, it will not 

be clear to an arbitrator how to apply an 

interpretation of the policy to a specific 

set of facts without an analogous 

example, and in those cases, the 

arbitrator will have no choice but to 

engage in unauthorized interpretation. 

In many cases, an interpretive dispute 

is not even apparent, because the policy 

terms appear to be unambiguous, but 

only when presented with a particular 

set of circumstances, does the need for 

interpretation arise. It seems unlikely 

that FCIC would be able to generate 

examples on its own that will direct an 

arbitrator with sufficient specificity 

regarding how to apply the policy to a 

peculiar factual situation, since FCIC 

will have no knowledge of the factual 

situation involved in the case. 

The commenter recognized FCIC must 

avoid making determinations of specific 

facts relating to individual policies and 

circumstances, but suggests that in cases 

where a requesting party’s example is 

too fact-specific, FCIC can still reject the 

request or disregard the example 

pursuant to proposed at § 400.768(a)(1) 

(‘‘Regardless of whether or not FCIC 

accepts a request, FCIC will not 

consider specific factual information to 

situations or cases in any final agency 

determination.’’). The commenter 

suggested parties be permitted to 

provide hypothetical examples to aid 

arbitrators in applying the policy to the 

facts before them. 

Response: Currently, FCIC receives 

requests for final agency determinations 

with large amounts of specific factual 

situation or case information, so if FCIC 

were to consider that factual 

information, FCIC would be infringing 

on the role of the mediator, arbitrator, 

hearing officer, or judge who decides 

the facts and applies the law to those 

facts. Further, what the commenter is 

suggesting is the use of hypotheticals to 

let the FCIC inform the arbitrator, 

mediator, etc. know how to apply the 

interpretation to the facts. However, that 

is not the role given to FCIC in section 

506(r) of the Act. FCIC’s role is simply 

to provide interpretations of regulations 

and statutes and policy provisions and 

procedures. It is the role of the 

mediator, arbitrator, etc. to apply that 

interpretation to the particular facts of 

the case. In addition, hypotheticals can 

present some facts and not others, 

which can skew the outcome and FCIC 

is in no position to make such 

determinations. FCIC is revising the rule 

to clarify that it will not accept any 

request for a final agency determination 

or FCIC interpretation that contains 

facts or hypotheticals to ensure that its 

interpretation is objective and unbiased. 

To the extent that FCIC believes that a 

hypothetical will provide clarification 

of its interpretation, FCIC will provide 

such hypothetical so it cannot to be 

construed as any determination of a 

factual situation. No change has been 

made. 

Comment: A commenter 

recommended the wording in 

§ 400.768(b) be changed to ‘‘. . . Code 

of Federal Regulations, but will notify 

you. . .’’ 

Response: As stated above, FCIC has 

revised the regulation to include the 

term ‘‘FCIC interpretation.’’ Therefore, 

the phrase the commenter is referencing 

is no longer used and is replaced with 

the term ‘‘FCIC interpretation.’’ 

Comment: A commenter 

recommended the wording in 

§ 400.768(c) be changed to ‘‘. . . under 

§ 400.768(b), the 90-day time 

period. . .’’, and similarly change the 

two additional references to 90-day time 

period in this section. 

Response: FCIC agrees and has 

revised the provisions accordingly. 

Comment: A commenter stated in 

proposed rule § 400.765, the definition 

of a ‘‘final agency determination’’ is 

limited to interpretations of 

‘‘regulations, or any policy provision 

that is codified in the Federal Register’’ 

but Subpart X is being expanded to 

include interpretations of ‘‘procedure or 

policy provision not codified in the 

Code of Federal Regulations’’, as 

referenced throughout the proposed 

rule. The only distinction for these two 

types of interpretations is whether or 

not they are published on RMA’s 

website and binding on all program 

participants, as indicated in § 400.768(g) 

and (h). The commenter recommended 

eliminating § 400.768(h) and include 

publication of procedure and policies 

that are not codified in the Federal 

Register in § 400.768(g). These changes 

ensure that RMA interpretations of 

procedure or 508(h) and pilot policies, 

which are not codified in the Federal 

Register, would be published and 


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binding on all program participants so 

that all policies and procedures would 

be administered uniformly by every 

insurance provider. 

Alternatively, eliminating 

§ 400.768(h) would also allow the 

definition for ‘‘final agency 

determination’’ to be expanded to 

include ‘‘. . . or interpretations of 

procedure or policy provision not 

codified in the Code of Federal 

Regulations’’. Modifying the definition 

of final agency determination in this 

way allows the phrase ‘‘or 

interpretations of procedure or policy 

provision not codified in the Code of 

Federal Regulations’’ referenced 

throughout the proposed rule to be 

eliminated. For example, § 400.766(a) 

could be simplified to read ‘‘The 

regulations contained in this subpart 

prescribe the rules and criteria for 

obtaining a final agency determination.’’ 

Response: FCIC agrees that the 

provisions are too narrowly drafted but 

not for the reasons provided by the 

commenter. The proposed rule failed to 

take into consideration other forms of 

interpretations, such as testimony. 

Therefore, FCIC is revising a number of 

provisions to identify final agency 

determinations and FCIC 

interpretations. These revisions will 

also make distinctions between 

interpretations of statute and regulations 

and interpretations of unpublished 

policy provisions and procedures as 

final agency determinations and FCIC 

interpretations respectively. 

Additionally, FCIC has revised the 

regulation to define ‘‘FCIC 

interpretation’’ as an interpretation of a 

policy provision not codified in the 

Code of Federal Regulations or any 

procedure used in the administration of 

any Federal crop insurance program. 

Therefore, any references to 

‘‘interpretations of procedure or policy 

provision not codified in the Code of 

Federal Regulations’’ have been 

removed and replaced with the term 

‘‘FCIC interpretation’’ throughout the 

regulation. 

However, the distinction between 

published and unpublished final 

determinations and their binding effect 

stems from section 506(r) of the Act, 

which gives FCIC express authority to 

provide interpretations of statute and 

regulations. Based on this statutory 

authority, FCIC publishes its final 

agency determinations and makes them 

binding on all participants. However, 

there are policies that are published as 

regulations and some policies and 

policy provisions that are not. Those 

policies that are published as 

regulations have the force of law. Those 

policies that are not published as 

regulations have the force of contracts 

but not law. However, to ensure 

consistency and equitable treatment in 

the program, FCIC interpreted section 

506(r) to authorize it to issue all 

interpretations of policy provisions. The 

same is true for procedures. FCIC 

discovered there was disparate 

interpretations of its procedures and for 

the sake of consistency and equitable 

treatment, FCIC included procedures as 

subject to its interpretation. Since, 

interpretations of provisions not 

included in statute or regulation is not 

statutorily mandated, such FCIC 

interpretations are only binding on the 

parties to the dispute, including the 

arbitrator, mediator, judge, or the 

National Appeals Division. No change 

has been made. 

Comment: A commenter 

recommended the wording in 

§ 400.768(i) be changed to ‘‘. . . loss 

adjuster as it relates to their 

performance of following FCIC policy 

provisions. . .’’ 

Response: FCIC agrees and has 

revised the provisions accordingly. 

Executive Orders 12866, 13563, and 

13771 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review,’’ direct agencies 

to assess all costs and benefits of 

available regulatory alternatives and, if 

regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). Executive Order 13563 

emphasized the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. The Office 

of Management and Budget (OMB) 

designated this rule as not significant 

under Executive Order 12866, 

‘‘Regulatory Planning and Review,’’ and 

therefore, OMB has not reviewed this 

rule. Executive Order 13771, ‘‘Reducing 

Regulation and Controlling Regulatory 

Costs,’’ requires that, in order to manage 

the costs required to comply with 

Federal regulations, that for every new 

significant or economically significant 

regulation issued, the new costs must be 

offset by the elimination of at least two 

prior regulations. This rule is not 

subject to Executive Order 13771. 

Paperwork Reduction Act of 1995 

Pursuant to the provisions of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. chapter 35), the collections of 

information in this rule have been 

approved by the Office of Management 

and Budget (OMB) under control 

number 0563–0055. 

E-Government Act Compliance 

FCIC is committed to complying with 

the E-Government Act of 2002, to 

promote the use of the internet and 

other information technologies to 

provide increased opportunities for 

citizen access to Government 

information and services, and for other 

purposes. 

Unfunded Mandates Reform Act of 

1995 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Public 

Law 104–4, establishes requirements for 

Federal agencies to assess the effects of 

their regulatory actions on State, local, 

and tribal governments and the private 

sector. This rule contains no Federal 

mandates (under the regulatory 

provisions of title II of the UMRA) for 

State, local, and tribal governments or 

the private sector. Therefore, this rule is 

not subject to the requirements of 

sections 202 and 205 of UMRA. 

Executive Order 13132 

It has been determined under section 

1(a) of Executive Order 13132, 

Federalism, that this rule does not have 

sufficient implications to warrant 

consultation with the States. The 

provisions contained in this rule will 

not have a substantial direct effect on 

States, or on the relationship between 

the national government and the States, 

or on the distribution of power and 

responsibilities among the various 

levels of government. 

Executive Order 13175 

This rule has been reviewed in 

accordance with the requirements of 

Executive Order 13175, ‘‘Consultation 

and Coordination with Indian Tribal 

Governments.’’ Executive Order 13175 

requires Federal agencies to consult and 

coordinate with tribes on a governmentto-government basis on policies that 

have tribal implications, including 

regulations, legislative comments or 

proposed legislation, and other policy 

statements or actions that have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

The Federal Crop Insurance 

Corporation has assessed the impact of 

this rule on Indian tribes and 

determined that this rule does not, to 

our knowledge, have tribal implications 

that require tribal consultation under 

E.O. 13175. If a Tribe requests 


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consultation, the Federal Crop 

Insurance Corporation will work with 

the Office of Tribal Relations to ensure 

meaningful consultation is provided 

where changes, additions and 

modifications identified herein are not 

expressly mandated by Congress. 

Regulatory Flexibility Act 

FCIC certifies that this regulation will 

not have a significant economic impact 

on a substantial number of small 

entities. The regulation does not require 

any more action on the part of the small 

entities than is required on the part of 

large entities. A Regulatory Flexibility 

Analysis has not been prepared since 

this regulation does not have an impact 

on small entities, and, therefore, this 

regulation is exempt from the provisions 

of the Regulatory Flexibility Act (5 

U.S.C. 605). 

Federal Assistance Program 

This program is listed in the Catalog 

of Federal Domestic Assistance under 

No. 10.450. 

Executive Order 12372 

This program is not subject to the 

provisions of Executive Order 12372, 

which require intergovernmental 

consultation with State and local 

officials. See the Notice related to 7 CFR 

part 3015, subpart V, published at 48 FR 

29115, June 24, 1983. 

Executive Order 12988 

This rule has been reviewed in 

accordance with Executive Order 12988 

on civil justice reform. The provisions 

of this rule will not have a retroactive 

effect. The provisions of this rule will 

preempt State and local laws to the 

extent such State and local laws are 

inconsistent herewith. Interpretations of 

statutory and regulatory provisions are 

matters of general applicability and, 

therefore, no administrative appeals 

process is available and judicial review 

may only be brought to challenge the 

interpretation after seeking a 

determination of appealability by the 

Director of the National Appeals 

Division (NAD) in accordance with 7 

CFR part 11. An interpretation of a 

policy provision not codified in the 

Code of Federal Regulations or any 

procedure used in the administration of 

any Federal crop insurance program 

(hereinafter referred to as ‘‘FCIC 

interpretations’’) are administratively 

appealable and the appeal provisions 

published at 7 CFR part 11 must be 

exhausted before any action for judicial 

review may be brought against FCIC. 

Environmental Evaluation 

This action is not expected to have a 

significant economic impact on the 

quality of the human environment, 

health, or safety. Therefore, neither an 

Environmental Assessment nor an 

Environmental Impact Statement is 

needed. 

List of Subjects in 7 CFR Part 400 

Administrative practice and 

procedure, Crop insurance, Reporting 

and recordkeeping requirements. 

Final Rule 

Accordingly, as set forth in the 

preamble, the Federal Crop Insurance 

Corporation amends 7 CFR part 400 as 

follows: 

PART 400—GENERAL 

ADMINISTRATIVE REGULATIONS 

■ 1. The authority citation for part 400 

continues to read as follows: 

Authority: 7 U.S.C. 1506(1), 1506(o). 

■ 2. Revise subpart X to read as follows: 

Subpart X—Interpretations of Statutory 

Provisions, Policy Provisions, and 

Procedures 

Sec. 

400.765 Definitions. 

400.766 Basis and applicability. 

400.767 Requestor obligations. 

400.768 FCIC obligations. 

Subpart X—Interpretations of Statutory 

Provisions, Policy Provisions, and 

Procedures 

§ 400.765 Definitions. 

The definitions in this section apply 

to this subpart. 

Act. The Federal Crop Insurance Act, 

7 U.S.C. 1501–1524. 

Approved insurance provider. A 

private insurance company that has 

been approved by FCIC to sell and 

service Federal crop insurance policies 

under a reinsurance agreement with 

FCIC. 

FCIC. The Federal Crop Insurance 

Corporation, a wholly owned 

government corporation within the 

United States Department of 

Agriculture. 

FCIC interpretation. An interpretation 

of a policy provision not codified in the 

Code of Federal Regulations or any 

procedure used in the administration of 

the Federal crop insurance program. 

Final agency determination. Matters 

of general applicability regarding FCIC’s 

interpretation of provisions of the Act or 

any regulation codified in the Code of 

Federal Regulations, including certain 

policy provisions, which are applicable 

to all participants in the Federal crop 

insurance program and the appeals 

process. 

NAD. The USDA National Appeals 

Division. See 7 CFR part 11. 

Participant. Any applicant for Federal 

crop insurance, an insured, or approved 

insurance provider or their agent, loss 

adjuster, employee or contractor. 

Procedure. All FCIC issued 

handbooks, manuals, memoranda, and 

bulletins for any crop insurance policy 

reinsured by FCIC. 

Proceeding. The process that starts 

with the filing of a complaint, notice of 

appeal, or other such document that 

commences the appeals process, and 

ends with the adjudicatory body issuing 

its decision, and includes all necessary 

activities, such as discovery, that occur 

within that time frame. 

RMA. The Risk Management Agency, 

an agency of the United States 

Department of Agriculture. 

You. The requestor of a final agency 

determination or FCIC interpretation. 

§ 400.766 Basis and applicability. 

(a) The regulations contained in this 

part prescribe the rules and criteria for 

obtaining a final agency determination 

or a FCIC interpretation. 

(1) FCIC will provide a final agency 

determination or a FCIC interpretation, 

as applicable, for statutory, regulatory, 

or other policy provisions or procedures 

that were in effect during the four most 

recent crop years from the crop year in 

which your request was submitted. For 

example, for a request received in the 

2014 crop year, FCIC will consider 

requests for the 2014, 2013, 2012, and 

2011 crop years. 

(2) If FCIC determines a request is 

outside the scope of crop years 

authorized in paragraph (a)(1) of this 

section, you will be notified within 30 

days of the date of receipt by FCIC. 

(3) If the statutory, regulatory or other 

policy provisions or procedures have 

changed for the time period you seek an 

interpretation you must submit a 

separate request for each policy 

provision or procedure by year. For 

example, if you seek an interpretation of 

section 6(b) of the Small Grains Crop 

Provisions for the 2012 through 2015 

crop years but the policy provisions 

were revised starting with the 2014 crop 

year, you must submit two requests, one 

for the 2012 and 2013 crop years and 

another for the 2014 and 2015 crop 

years. 

(b) With respect to a final agency 

determination or a FCIC interpretation: 

(1) If there is a dispute between 

participants that involves a final agency 

determination or a FCIC interpretation: 

(i) The parties are required to seek an 

interpretation of the disputed provision 


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from FCIC in accordance with this 

subpart (This may require that the 

parties seek a stay of the proceedings 

until an interpretation is provided, if 

such proceedings have been initiated); 

and 

(ii) The final agency determination or 

FCIC interpretation may take the form of 

a written interpretation or, at the sole 

discretion of FCIC, may take the form of 

testimony from an employee of RMA 

expressly authorized in writing to 

provide interpretations of policy or 

procedure on behalf of FCIC. 

(2) All written final agency 

determinations issued by FCIC are 

binding on all participants in the 

Federal crop insurance program for the 

crop years the policy provisions are in 

effect. All written FCIC interpretations 

and testimony from an employee of 

RMA are binding on the parties to the 

dispute, including the arbitrator, 

mediator, judge, or NAD. 

(3) Failure to request a final agency 

determination or FCIC interpretation 

when required by this subpart or failure 

of NAD, arbitrator, mediator, or judge to 

adhere to the final agency determination 

or FCIC interpretation provided under 

this subpart will result in the 

nullification of any award or agreement 

in arbitration or mediation in 

accordance with the provisions in the 

‘‘Mediation, Arbitration, Appeal, 

Reconsideration, and Administrative 

and Judicial Review’’ section or similar 

section in all crop insurance policies. 

(4) If either party believes an award or 

decision was rendered by NAD, 

arbitrator, mediator, or judge based on a 

disputed provision in which there was 

a failure to request a final agency 

determination or FCIC interpretation or 

NAD, arbitrator, mediator, or judge’s 

decision was not in accordance with the 

final agency determination or FCIC 

interpretation rendered with respect to 

the disputed provision, the party may 

request FCIC review the matter to 

determine if a final agency 

determination or FCIC interpretation 

should have been sought in accordance 

with § 400.767. 

(i) Requests should be submitted 

through one of the methods contained 

in § 400.767(a)(1); 

(ii) If FCIC determines that a final 

agency determination or FCIC 

interpretation should have been sought 

and it was not, or the decision was not 

in accordance with the final agency 

determination or FCIC interpretation 

rendered with respect to the disputed 

provision: 

(A) The award is automatically 

nullified; and 

(B) Either party may appeal FCIC’s 

determination that a final agency 

determination or FCIC interpretation 

should have been sought and it was not, 

or the decision was not in accordance 

with the final agency determination or 

FCIC interpretation rendered with 

respect to the disputed provision to 

NAD in accordance with 7 CFR part 11. 

(5) All written final agency 

determinations that are published on 

RMA’s website are considered matters 

of general applicability and are not 

appealable to NAD. Before obtaining 

judicial review of any final agency 

determination, you must obtain an 

Administrative Final Determination 

from the Director of NAD on the issue 

of whether the final agency 

determination is a matter of general 

applicability. 

(6) With respect to an administrative 

review of a FCIC interpretation: 

(i) If either party to the proceeding 

does not agree with the written FCIC 

interpretation, a request for 

administrative review may be filed in 

accordance with 7 CFR part 400, subpart 

J. If you seek an administrative review 

from FCIC, such request must be 

submitted in accordance with 

§ 400.767(a). 

(ii) FCIC will not accept requests for 

administrative review from NAD, a 

mediator, or arbitrator. 

(iii) The RMA Office of the Deputy 

Administrator for Product Management 

will make a determination on the 

request for administrative review not 

later than 30 days after receipt of the 

request. 

(iv) Regardless of whether you have 

sought administrative review, you may 

appeal a FCIC interpretation under this 

subsection to NAD in accordance with 

7 CFR part 11. 

§ 400.767 Requestor obligations. 

(a) All requests for a final agency 

determination or FCIC interpretation 

submitted under this subpart must: 

(1) Be submitted to the Deputy 

Administrator using the guidelines 

provided on RMA’s website at 

www.rma.usda.gov through one of the 

following methods: 

(i) In writing by certified mail or 

overnight delivery, to the Deputy 

Administrator, Risk Management 

Agency, United States Department of 

Agriculture, Beacon Facility, Stop 0801, 

Room 421, P.O. Box 419205, Kansas 

City, MO 64141–6205; 

(ii) By facsimile at (816) 926–3049; or 

(iii) By electronic mail at subpartx@

rma.usda.gov; 

(2) State whether you are seeking a 

final agency determination or FCIC 

interpretation; 

(3) Identify and quote the specific 

provision in the Act, regulations, 

procedure, or policy provision for 

which you are requesting a final agency 

determination or a FCIC interpretation; 

(4) Contain no more than one request 

for an interpretation (You must make 

separate requests for each provision if 

more than one provision is at issue. For 

example, if there is a dispute with the 

interpretation of Paragraph 3 of the Loss 

Adjustment Manual, then one request 

for an interpretation is required. If there 

is a dispute with the interpretation of 

Paragraph 3 of the Loss Adjustment 

Manual and Paragraph 2 of the 

Macadamia Nut Loss Adjustment 

Standards Handbook, then two separate 

requests for an interpretation are 

required); 

(5) State the crop, crop year(s), and 

plan of insurance applicable to the 

request; 

(6) State the name, address, and 

telephone number of a contact person 

for the request; 

(7) Contain your detailed 

interpretation of the specific provision 

of the Act, regulations, procedure, or 

policy provision for which the request 

for interpretation is being requested; 

and 

(8) Not contain any specific facts, 

alleged conduct, or hypothetical 

situations or the request will be 

returned to the requestor without 

consideration. 

(b) You must advise FCIC if the 

request for a final agency determination 

or FCIC interpretation will be used in a 

judicial review, mediation, or 

arbitration. 

(1) You must identify the type of 

proceeding (e.g., mediation, arbitration, 

or litigation), if applicable, in which the 

interpretation will be used, and the date 

the proceeding is scheduled to begin, or 

the earliest possible date the proceeding 

would likely begin if a specific date has 

not been established; 

(2) The name, address, telephone 

number, and if applicable, fax number, 

or email address of a contact person for 

both parties to the dispute; 

(3) Unless the parties elect to use the 

expedited review process available 

under the AAA rules or the appeal is 

before NAD, requests must be submitted 

not later than 90 days before the date 

the mediation, arbitration, or litigation 

proceeding in which the interpretation 

will be used is scheduled to begin. 

(i) If the rules of the court, mediation, 

or arbitration require the interpretation 

prior to the date the proceeding begins, 

add 90 days to the number of days 

required prior to the proceeding. For 

example, if a court requires the 

interpretation 20 days prior to the date 

the proceeding begins, you must submit 


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Federal Register / Vol. 83, No. 247 / Thursday, December 27, 2018 / Rules and Regulations 66583 

the request 110 days before the 

proceeding is scheduled to begin. 

(ii) Failure to timely submit a request 

for a final agency determination or FCIC 

interpretation may result in: 

(A) FCIC issuing a determination that 

no interpretation could be made because 

the request was not timely submitted; 

and 

(B) Nullification of any agreement or 

award in accordance with § 400.766 if 

no final agency determination or FCIC 

interpretation can be provided. 

(iii) Notwithstanding paragraph (b) of 

this section, if during the mediation, 

arbitration, or litigation proceeding, an 

issue arises that requires a final agency 

determination or FCIC interpretation the 

mediator, arbitrator, judge, or magistrate 

must promptly request a final agency 

determination or FCIC interpretation in 

accordance with § 400.767(a). 

(4) FCIC at its sole discretion may 

authorize personnel to provide an oral 

or written final agency determination or 

FCIC interpretation, as appropriate; and 

(5) Any decision or settlement 

resulting from such mediation, 

arbitration, or litigation proceeding 

before FCIC provides its final agency 

determination or FCIC interpretation 

can be nullified in accordance with 

§ 400.766. 

(c) If multiple parties are involved 

and have opposing interpretations, a 

joint request for a final agency 

determination or FCIC interpretation 

including both requestor interpretations 

in one request is encouraged. If multiple 

insured persons are parties to the 

dispute, and the request for a final 

agency determination or FCIC 

interpretation applies to all parties, one 

request may be submitted for all insured 

persons instead of separate requests for 

each person. In this case, the 

information required in this section 

must be provided for each person. 

§ 400.768 FCIC obligations. 

(a) FCIC will not provide a final 

agency determination or FCIC 

interpretation for any request regarding, 

or that contains, specific factual 

information to situations or cases, such 

as acts or failures to act of any 

participant under the terms of a policy, 

procedure, or any reinsurance 

agreement. 

(1) FCIC will not consider specific 

factual information to situations or cases 

in any final agency determination or 

FCIC interpretation. 

(2) FCIC will not consider any 

examples or hypotheticals provided in 

your interpretation because those are 

fact-specific and could be construed as 

a finding of fact by FCIC. If an example 

or hypothetical is required to illustrate 

an interpretation, FCIC will provide the 

example in the interpretation. 

(b) If, in the sole judgment of FCIC, 

the request is unclear, ambiguous, or 

incomplete, FCIC will not provide a 

final agency determination or FCIC 

interpretation, but will notify you 

within 30 days of the date of receipt by 

FCIC that the request is unclear, 

ambiguous, or incomplete. 

(c) If FCIC notifies you that a request 

is unclear, ambiguous or incomplete 

under paragraph (b) of this section, the 

90-day time period for FCIC to provide 

a response is stopped on the date FCIC 

notifies you. On the date FCIC receives 

a clear, complete, and unambiguous 

request, FCIC has the balance of the 

days remaining in the 90-day time 

period to provide a response to you. For 

example, FCIC receives a request for a 

final agency determination on January 

10. On February 10, FCIC notifies you 

the request is unclear. On March 10, 

FCIC receives a clarified request that 

meets all requirements for FCIC to 

provide a final agency determination. 

FCIC has sixty days from March 10, the 

balance of the 90-day time period, to 

provide a response. 

(d) FCIC reserves the right to modify 

the request if FCIC determines that a 

request for a final agency determination 

is really a request for a FCIC 

interpretation or vice versa. 

(e) FCIC will provide you a written 

final agency determination or a FCIC 

interpretation within 90 days of the date 

of receipt for a request that meets all 

requirements in § 400.767. 

(f) If FCIC does not provide a response 

within 90 days of receipt of a request, 

you may assume your interpretation is 

correct for the applicable crop year. 

However, your interpretation shall not 

be considered generally applicable and 

shall not be binding on any other 

program participants. Additionally, in 

the case of a joint request for a final 

agency determination or a FCIC 

interpretation, if FCIC does not provide 

a response within 90 days, neither party 

may assume their interpretations are 

correct. 

(g) FCIC will publish all final agency 

determinations as specially numbered 

documents on the RMA website because 

they are generally applicable to all 

program participants. 

(h) FCIC will not publish any FCIC 

interpretation because it is only 

applicable to the parties in the dispute. 

You are responsible for providing copies 

of the FCIC interpretation to all other 

parties. 

(i) When issuing a final agency 

determination or a FCIC interpretation, 

FCIC will not evaluate the insured, 

insurance provider, agent, or loss 

adjuster as it relates to their 

performance of following FCIC policy 

provisions or procedures. 

Interpretations will not include any 

analysis of whether the insured, 

insurance provider, agent, or loss 

adjuster was in compliance with the 

policy provision or procedure in 

question. 

Martin R. Barbre, 

Manager, Federal Crop Insurance 

Corporation. 

[FR Doc. 2018–27858 Filed 12–26–18; 8:45 am] 

BILLING CODE 3410–08–P 

DEPARTMENT OF AGRICULTURE 

7 CFR Part 800 

[Doc. No. AMS–FGIS–18–0063] 

Removal of Specific Fee Reference 

AGENCY: Agricultural Marketing Service, 

USDA. 

ACTION: Direct final rule. 

SUMMARY: The United States Grain 

Standards Act (USGSA) provides the 

Secretary with the authority to charge 

and collect reasonable fees to cover the 

costs of performing official services and 

the costs associated with managing the 

program. The USDA, on behalf of the 

Agricultural Marketing Service (AMS), 

is eliminating the published table of fees 

in the Code of Federal Regulations 

(CFR). Notice of changes to Schedule A 

Fees will be published in the Federal 

Register and AMS will make the fee 

schedule available on the Agency’s 

public website. 

DATES: This rule is effective February 

11, 2019, unless we receive written 

adverse comments or written notices of 

intent to submit adverse comments on 

or before January 28, 2019. If we receive 

such comments or notices, we will 

publish a timely document in the 

Federal Register withdrawing the direct 

final rule. 

ADDRESSES: Submit comments by any of 

the following methods: 

• Postal Mail: Please send your 

comment addressed to Kendra Kline, 

AMS, USDA, 1400 Independence 

Avenue SW, Room 2043–S, Washington, 

DC 20250–3614. 

• Hand Delivery or Courier: Kendra 

Kline, AMS, USDA, 1400 Independence 

Avenue SW, Room 2043–S, Washington, 

DC 20250–3614. 

• internet: Go to http://

www.regulations.gov. Follow the on-line 

instructions for submitting comments. 

FOR FURTHER INFORMATION CONTACT: 

Denise Ruggles, FGIS Executive Program 

Analyst, USDA AMS; Telephone: (816) 


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