USDA Waives 30-Day Rule in Drought-Stricken States
July 14, 2017
In light of the severe drought conditions in Montana, North Dakota and South Dakota, producers are struggling to find adequate supplies of feed or forage, causing them to market their livestock sooner than anticipated. In response, the U.S. Department of Agriculture recently announced measures to assist producers affected by severe drought conditions in these states.
The Livestock Risk Protection Basic Provisions contain language that requires livestock to be owned by the producer within the last 30 days of the insurance period or the policy is terminated with premium owed, but no indemnities payable. The 30-day ownership requirement assures the producer maintains an insurable interest in the livestock but does not affect the actuarial performance of the product as insurance coverage and losses are determined from the commodity futures or cash markets.
In keeping with USDA measures to assist producers in managing drought conditions, Approved Insurance Providers, at their sole discretion, may waive the 30-day ownership requirement for LRP Specific Coverage Endorsements (including LRP-Lamb) currently in effect as of July 11, 2017, subject to verification of proof of ownership. Proof of ownership can include sales receipts, kill sheets, or other documentation that verifies ownership during the insurance period showing the date the livestock were sold or slaughtered. The waiver does not affect actuarial performance of the LRP policy and permits producers to market their livestock as necessary while the policy continues in force. The 30-day ownership requirement waiver is applicable in Montana, North Dakota and South Dakota.
Read the full bulletin online at: https://www.rma.usda.gov/bulletins/managers/2017/mgr-17-008.pdf.