LOSS ADJUSTMENT United States MANUAL (LAM) Department of Agriculture STANDARDS HANDBOOK Federal Crop Insurance Corporation 2016 and Succeeding Crop Years FCIC-25010 (10-2015) RISK MANAGEMENT AGENCY KANSAS CITY, MO 64133 TITLE: Loss Adjustment Manual (LAM) NUMBER: FCIC-25010 Standards Handbook EFFECTIVE DATE: 2016 and Succeeding ISSUE DATE: October 8, 2015 Crop Years SUBJECT: OPI: Product Administration and Standards Division Provides procedures and instructions for APPROVED: administering general loss adjustment of crop insurance programs. /s/ Tim B. Witt Deputy Administrator for Product Management REASONS FOR ISSUANCE: 1. Throughout the handbook: Comments that pertained to grammar, punctuation, deleting unneeded words, rewording to make a sentence flow better, corrections of reference numbers, formatting, etc. were incorporated if accepted, but are not listed. 2. Throughout handbook: Made editorial and syntax changes so handbook text tracks with current RMA-approved handbook formatting, and updated examples and forms as needed. 3. Throughout handbook: Removed duplicative information that is currently stated in the GSH and CIH respectively. 4. Paragraph 401: Revised language to clarify that, in accordance with section 14 of the BP, it is the insured’s responsibility (not the agent or AIP) to provide any PP or NOL for insurable acreage. 5. Paragraph 406: Added reference to the GSH and DSSH for signature authority procedures. Removed duplicate language referencing State authority procedure. 6. Paragraph 523(1): Removed language regarding LPP per-acre production guarantee reductions for millet, tobacco, and AUP cotton planted within the LPP and added exception referring to the applicable CP and SP for those crops. 7. Paragraph 721B(1): Clarified self-certified replant claim procedures for spring planted wheat. 8. Subparagraph 722A(4)(a): Revised procedure for when the insured notifies the AIP of intent to replant, but the AIP determines it is not practical to replant. 9. Subparagraph 802(1): Added reference to the CIH for acreage report discrepancies and misreporting situations. October 2015 FCIC-25010 TP 1 LOSS ADJUSTMENT MANUAL (LAM) STANDARDS HANDBOOK REASONS FOR ISSUANCE: 10. Subparagraph 931(1)(h): Added language regarding acceptable records for vertically integrated producers that cannot provide disinterested third party records. 11 Subparagraph 1108D: Revised procedure for flood damaged crops containing contaminants. 12. Exhibit 18: Combined GSI Report and GSI Form standards into one report in accordance with the DSSH. CONTROL CHART: Loss Adjustment Manual (LAM) Standards Handbook TP TC Text Exhibit Exhibit Directive Date Page(s) Page(s) Page(s) Number(s) Page(s) Number Insert Entire Handbook Current Index 1-2 1-6 1-322 1-22 323-400 10-2015 FCIC-25010 FILING INSTRUCTIONS: This handbook replaces the 2015 Loss Adjustment Manual (LAM) Standards Handbook (Updated Handbook including Slipsheets), FCIC-25010-2H (01-2015). This handbook is effective for the 2016 and succeeding crop years and is not retroactive to any 2015 or prior crop year determinations. October 2015 FCIC-25010 TP 2 LOSS ADJUSTMENT MANAUL STANDARDS HANDBOOK TABLE OF CONTENTS PAGE NO. PART 1 GENERAL INFORMATION 1 Purpose ................................................................................................................................... 1 2 Special Instructions ................................................................................................................. 2 3 Operating Policy ..................................................................................................................... 3 4 Document Procedures ............................................................................................................. 4 5 Multiple USDA Benefits & Dual Participation ...................................................................... 4 6-200 (Reserved) PART 2 RESPONSIBILITIES 201 AIP Responsibilities ............................................................................................................... 6 202 Loss Adjustment Responsibilities........................................................................................... 8 203 Insured’s Responsibilities ..................................................................................................... 12 204-300 (Reserved) PART 3 PRACTICES 301 Irrigated Practice ................................................................................................................... 15 302 Organic Certified & Organic Transitional Practices ............................................................ 24 303-400 (Reserved) PART 4 INSUREDS CONTRACT INFORMATION 401 Notification of Prevented Planting or Notice of Damage or Loss ........................................ 27 402 Review of APH Database (Production and Yield Report) ................................................... 29 403 Review of Options & Endorsements .................................................................................... 29 404 Review of Hail & Fire Exclusion ......................................................................................... 29 405 Review of Assignment of Indemnity .................................................................................... 32 406 Review of Signature Authority ............................................................................................. 33 407-500 (Reserved) PART 5 ACREAGE Section 1 Acreage Report 501 Liability Adjustment Factor .................................................................................................. 34 502 Misreported APH or Practices/Types/Variety Within the Same Unit .................................. 39 503 Different Production Method Carried Out That Results In Lower Yield ............................. 39 504 Revision to Correct Uninsurable Acreage As Insured Acres ............................................... 40 505 Unreported Acreage Which May Be Late Planted ............................................................... 40 506-520 (Reserved) October 2015 FCIC-25010 TC 1 LOSS ADJUSTMENT MANAUL STANDARDS HANDBOOK TABLE OF CONTENTS PAGE NO. Section 2 Late Planting Coverage 521 General Information .............................................................................................................. 42 522 Crops Having Late Planting Period Coverage ...................................................................... 42 523 Per-Acre Production Guarantee ............................................................................................ 43 524-600 (Reserved) PART 6 FIRST, SECOND, & SUBSEQUENT CROPS PLANTED ON SAME ACREAGE IN SAME CROP YEAR 601 First (1st) Insured Crop Planted & Second (2nd) Crop ........................................................ 44 602 Reduction of Payments & Premium due to 2nd Crop .......................................................... 51 603 Indemnity Payment as it Relates to Double-Cropping History ............................................ 52 604 Subsequent Planted Crops .................................................................................................... 58 605 Loss Adjustment ................................................................................................................... 59 606 Production Worksheet Entries for 1st & 2nd Insured Crops .................................................. 60 607 1st & 2nd Crop Questions & Answers ................................................................................. 71 608-700 (Reserved) PART 7 TYPES OF INSPECTIONS Section 1 Indemnity Inspections 701 Preliminary Inspections ........................................................................................................ 74 702 Final Inspections ................................................................................................................... 75 703 Production Pre-measurement Service Inspections ................................................................ 91 704-720 (Reserved) Section 2 Replanting Inspections 721 Replanting Payment Inspections ........................................................................................... 94 722 Replanting Provision Issues ................................................................................................ 102 723-730 (Reserved) Section 3 Special Contract Services 731 Growing Season Inspections ............................................................................................... 107 732 Pre-harvest Inspections ....................................................................................................... 107 733 Crop Inspection to Determine Acceptance of Misreported Acreage Report Information .. 108 734-800 (Reserved) October 2015 FCIC-25010 TC 2 LOSS ADJUSTMENT MANAUL STANDARDS HANDBOOK TABLE OF CONTENTS PAGE NO. PART 8 INSPECTION DUTIES & RESPONSIBILITIES Section 1 General Information 801 All Inspection Types ........................................................................................................... 111 802 Verifying Acreage Report Information at Loss Time ......................................................... 112 803 Verifying Insurable Acreage ............................................................................................... 114 804 Verifying Insured Crop ....................................................................................................... 115 805 Verifying Unit Structure ..................................................................................................... 115 806 Verifying Insurable Share ................................................................................................... 116 807 Resolving Share Discrepancies ........................................................................................... 119 808-820 (Reserved) Section 2 Acreage Determination 821 General Information & Methods ........................................................................................ 121 822 Wheel Measuring Method .................................................................................................. 132 823 Determining Insured Acres from Skip-row Planting Patterns ............................................ 135 824-830 (Reserved) Section 3 Certification Form 831 General Information & Responsibilities ............................................................................. 137 832-840 (Reserved) Section 4 Verifying Cause of Loss 841 General Information ............................................................................................................ 141 842 Hail & Fire Exclusion ......................................................................................................... 141 843 Uninsured Causes of Loss .................................................................................................. 141 844 Abandon Versus not Following a Good Farming Practice ................................................. 143 845-900 (Reserved) PART 9 ESTABLISHING PRODUCTION Section 1 General Information 901 Insured & AIP Responsibilities .......................................................................................... 145 902 Verifying Total Appraised or Harvested Production .......................................................... 146 903 Bypassed Acreage ............................................................................................................... 149 904 Gleaned Acreage ................................................................................................................. 152 905-920 (Reserved) Section 2 Appraisals 921 General Information ............................................................................................................ 156 922 Appraisal Method Modifications & Deviations ................................................................. 163 923 Appraisals Involving Average Row-width Measurements ................................................. 163 924 Representative Sample Area Appraisals ............................................................................. 164 925-930 (Reserved) October 2015 FCIC-25010 TC 3 LOSS ADJUSTMENT MANAUL STANDARDS HANDBOOK TABLE OF CONTENTS PAGE NO. Section 3 Verifying Production 931 Verifying Harvested Production ......................................................................................... 175 932 Verifying Sold or Commercially Stored Production .......................................................... 177 933 Verifying Fed Production ................................................................................................... 183 934 Verifying & Accounting for Production Not to Count ....................................................... 184 935-1000 (Reserved) PART 10 DETERMINING AND RECORDING THE QUANTITY OF FARM-STORED PRODUCTION 1001 Determining & Recording Farm-Stored Production that Requires Measurements ............ 186 1002 Production Weighed & Farm-Stored .................................................................................. 187 1003 Authorization to Accept Insured’s Structure Markings, Load Records, & Combine Monitor Records ............................................................................................................................... 192 1004 Determining Amount of Grain Stored in Grain Bags ......................................................... 200 1005 Recording Farm-Stored Production on the Production Worksheet .................................... 202 1006 Farm-stored Production-to-count Formula ......................................................................... 205 1007 Gross Cubic Feet Formulas by Structure ............................................................................ 206 1008 Gross Cubic Feet Formulas for Unusual Storage Configurations ...................................... 209 1009 Net Cubic Feet Formula (Cubic Feet Deductions) ............................................................. 215 1010-1100 (Reserved) PART 11 ADJUSTMENTS TO PRODUCTION 1101 General Information ............................................................................................................ 216 1102 Quality Adjustment ............................................................................................................. 217 1103 Adjustments for Moisture ................................................................................................... 244 1104 Adjustments for Foreign Material & Dockage ................................................................... 245 1105 Consolidating Same Moisture, Foreign Material, or Dockage Percentage Entries ............ 249 1106 Averaging Moisture or Foreign Material Percentage Entries ............................................. 249 1107 Test Weight & Test Weight Factor ..................................................................................... 250 1108 Quality Adjustment when Production Contains Mycotoxins, Other Substances, or Conditions at Levels Injurious to Human or Animal Health .............................................. 252 1109-1200 (Reserved) PART 12 UNUSUAL/CONTROVERSIAL CASES & SPECIAL CLAIMS PROCEDURES Section 1 General Information 1201 General Procedures Involving Unusual or Controversial Cases ......................................... 275 1202 Report Writing .................................................................................................................... 275 1203 Dealing with Problem Cases ............................................................................................... 276 1204 Controversial Claim Procedure ........................................................................................... 278 1205 Pesticide or Other Chemical Substance Hazards ................................................................ 279 1206-1220 (Reserved) October 2015 FCIC-25010 TC 4 LOSS ADJUSTMENT MANAUL STANDARDS HANDBOOK TABLE OF CONTENTS PAGE NO. Section 2 Unusual/Controversial Cases 1221 Controversial Claim: Uninsured Causes of Loss ............................................................... 280 1222 Claims for Indemnity Involving Suspected Concealment or Misrepresentation ................ 288 1223-1230 (Reserved) Section 3 Special Claims Procedures 1231 Third Party Cause of Loss .................................................................................................. 289 1232 Claims Involving Fire Damage ........................................................................................... 289 1233 Commingled Production ..................................................................................................... 294 1234 Unreported Units ................................................................................................................ 302 1235 Claims Involving Severe Wildlife Damage, Insect, Disease, or Weed Infestation ............ 306 1236 Airplane or Broadcast-seeded Barley, Oats, Rye, or Wheat ............................................... 307 1237 Severe Wind Erosion .......................................................................................................... 308 1238 Corrected Claims ................................................................................................................ 310 1239 Documenting Insured’s Death after Insurance Attached & There is a Claim .................... 312 1240 Bankruptcy .......................................................................................................................... 313 1241 Modification of Requirement to Destroy Crop Before Indemnification ............................ 313 1242 Chemical Damage due to Adverse Weather Condition ...................................................... 314 1243 Simplified Claim Process ................................................................................................... 315 1244 Large Claim Reviews & FCIC Participation ...................................................................... 318 1245-1300 (Reserved) ................................................................................................................. 318 PART 13 FARM SERVICE AGENCY 1301 Farm Service Agency Information ..................................................................................... 319 1302 Information Requests to Farm Service Agency .................................................................. 319 1303 Obtaining Requested Documents from Farm Service Agency ........................................... 321 1304 Verification Materials/Information ..................................................................................... 321 October 2015 FCIC-25010 TC 5 LOSS ADJUSTMENT MANAUL STANDARDS HANDBOOK TABLE OF CONTENTS PAGE NO. EXHIBITS 1 Acronyms and Abbreviations ............................................................................................. 323 2 Terms and Definitions ........................................................................................................ 326 3 Causes of Loss .................................................................................................................... 327 4 Hail/Fire Exclusion Appraisal Factor Chart ....................................................................... 331 5 FSA Documents .................................................................................................................. 334 6 Claim Checklist Form Standards ........................................................................................ 341 7 Certification Form Standards and Completion Instructions ............................................... 343 8 Self-certification Replant Worksheet Form Standards & Completion Instructions ........... 346 9 Square Root Table .............................................................................................................. 350 10 Round Bin Conversion Chart .............................................................................................. 351 11 Notice of Prevented Planting or Notice of Damage or Loss Standards .............................. 360 12 Production Worksheet Continuation Sheet Form Standards .............................................. 364 13 FGIS (or Applicable State or Other Entity) Definitions for FM & Dockage ..................... 365 14 Calculation Sequence of Liability Adjustment Factor & 1st/2nd Crop Reduction .............. 370 15 Instructions for Determining Tree/Vine/Bush Acres .......................................................... 372 16 Settlement of Claim When Insured has less than 100% Share ........................................... 377 17 SCP Form Completion Instructions .................................................................................... 386 18 GSI Report Standards & Completion Instructions ............................................................. 394 19 Rounding Rules .................................................................................................................. 397 20 Table to Convert Fractions to Percent Figures ................................................................... 398 21 Metric Conversion Table .................................................................................................... 399 22 Converting Volume to Bushels, Hundredweight, or Pounds .............................................. 400 October 2015 FCIC-25010 TC 6