I 

110TH CONGRESS 

1ST SESSION H. R. 1825 

To amend the Federal Crop Insurance Act to require the Federal Crop 

Insurance Corporation to offer farmers supplemental crop insurance 

based on an area yield and loss plan of insurance or an area revenue 

plan of insurance, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 29, 2007 

Mr. NEUGEBAUER introduced the following bill; which was referred to the 

Committee on Agriculture 

A BILL 

To amend the Federal Crop Insurance Act to require the 

Federal Crop Insurance Corporation to offer farmers 

supplemental crop insurance based on an area yield and 

loss plan of insurance or an area revenue plan of insurance, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. AVAILABILITY OF SUPPLEMENTAL CROP IN2 SURANCE BASED ON AREA YIELD AND LOSS 

3 PLAN OF INSURANCE OR AREA REVENUE 

4 PLAN OF INSURANCE. 

5 (a) IN GENERAL.—Section 508(c) of the Federal 

6 Crop Insurance Act (7 U.S.C. 1508(c)) is amended by 

7 adding at the end the following new paragraph: 

8 ‘‘(11) SUPPLEMENTAL AREA COVERAGE.— 

9 ‘‘(A) AVAILABILITY OF COVERAGE.—Not10 withstanding paragraph (4), if area coverage is 

11 available in an area (as determined by the Cor12 poration under paragraph (3)), the Corporation 

13 shall provide eligible producers in that area 

14 with the option to purchase supplemental insur15 ance coverage based on— 

16 ‘‘(i) an area yield and loss plan of in17 surance; or 

18 ‘‘(ii) an area revenue plan of insur19 ance that includes coverage for a loss in 

20 yield. 

21 ‘‘(B) ELIGIBLE PRODUCERS.—To be eligi22 ble to obtain supplemental coverage under this 

23 paragraph, a producer must purchase either an 

24 individual yield and loss plan of insurance or a 

25 revenue plan of insurance that includes cov26 erage for a loss in yield at an additional covVerDate Aug 31 2005 05:53 Apr 05, 2007 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1825.IH H1825

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1 erage level for the same crop to be covered by 

2 the supplemental coverage. 

3 ‘‘(C) LIMITATION.—In providing supple4 mental coverage to a producer under this para5 graph, the sum of the following shall not exceed 

6 100 percent: 

7 ‘‘(i) The coverage level expressed in 

8 percentage terms for the individual yield 

9 and loss plan of insurance or the revenue 

10 plan of insurance that includes coverage 

11 for a loss in yield that is purchased by the 

12 producer for the same crop covered by the 

13 supplemental coverage, as required by sub14 paragraph (B). 

15 ‘‘(ii) The share expressed in percent16 age terms of the area yield and loss plan 

17 of insurance or the area revenue plan of 

18 insurance (at whatever coverage level is se19 lected) that is used to determine the level 

20 of supplemental insurance coverage pro21 vided the producer under this paragraph. 

22 ‘‘(D) PAYMENT OF PORTION OF PRE23 MIUM.—As provided in subsection (e), the Cor24 poration shall pay a portion of the premium for 

25 supplemental coverage under this paragraph 


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1 and the associated individual area yield and loss 

2 plan of insurance or revenue plan of insurance 

3 that includes coverage for a loss in yield. 

4 ‘‘(E) AMOUNT OF INDEMNITY PAID UNDER

5 SUPPLEMENTAL COVERAGE.—The indemnity 

6 payable under supplemental coverage provided 

7 under this paragraph shall be calculated as— 

8 ‘‘(i) the total indemnity for the area 

9 yield and loss plan of insurance or area 

10 revenue plan of insurance, at the coverage 

11 level chosen by the producer; multiplied by 

12 ‘‘(ii) the share of the coverage of the 

13 area yield and loss plan of insurance or 

14 area revenue plan of insurance selected by 

15 the producer. 

16 ‘‘(F) SPECIAL RULE RELATING TO QUALI17 FYING LOSSES.—In the case of a qualifying loss 

18 in an area (as determined by the Corporation) 

19 under supplemental coverage provided under 

20 this paragraph, subject to the applicable cov21 erage limits, the total amount of the indemnity 

22 shall be available to the producer regardless of 

23 the loss incurred under the individual yield and 

24 loss plan of insurance or the revenue plan of inVerDate Aug 31 2005 05:53 Apr 05, 2007 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1825.IH H1825

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1 surance that includes coverage for a loss in 

2 yield of the producer. 

3 ‘‘(G) REINSURANCE YEAR.—Subject to the 

4 availability of area yield and loss or revenue 

5 coverage for an insurable crop in an area (as 

6 determined by the Corporation), the Corpora7 tion shall provide supplemental coverage under 

8 this paragraph not later than the 2008 reinsur9 ance year.’’. 

10 (b) CONFORMING AMENDMENTS.—Section 508(d)(2) 

11 of the Federal Crop Insurance Act (7 U.S.C. 1508(d)(2)) 

12 is amended— 

13 (1) by striking ‘‘additional coverage’’ in the 

14 matter preceding subparagraph (A) and inserting 

15 ‘‘additional and supplemental coverages’’; and 

16 (2) by adding at the end the following new sub17 paragraph: 

18 ‘‘(C) In the case of supplemental coverage 

19 provided under subsection (c)(11) that, in com20 bination with either the individual yield and loss 

21 coverage, or a comparable coverage for a policy 

22 or plan of insurance that is not based on indi23 vidual yield and does not insure more than 100 

24 percent of the recorded or appraised average 

25 yield indemnified at not greater than 100 perVerDate Aug 31 2005 05:53 Apr 05, 2007 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1825.IH H1825

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1 cent of the expected market price, the amount 

2 of the premium shall— 

3 ‘‘(i) be sufficient to cover anticipated 

4 losses and a reasonable reserve; and 

5 ‘‘(ii) include an amount for operating 

6 and administrative expenses, as determined 

7 by the Corporation, on an industry-wide 

8 basis as a percentage of the amount of the 

9 premium used to define loss ratio.’’. 

Æ 


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