NAU Country News

RMA Option Changes

Option ChangesIn early January of 2018, the Risk Management Agency (RMA) made changes affecting both the Prevented Planting +10 Percent Option (PT) and the Yield Cup (YC) option. The changes stated below were already applied to any 2018 coverages with a contract date after November 30, 2017. NAU Country will apply these same changes to any 2019 coverages. If this affects your insureds, they will be notified with a letter explaining the details in mid-August. Please read below for more information.

Prevented Planting +10 Percent option (PT)

On December 4, the RMA made changes to the additional coverage options available for Prevented Planting coverage. The changes remove the Prevented Planting +10 Percent Option (PT). This change had an immediate impact for the 2018 crop year for crops with a contract change date on or after November 30, 2017. The PT removal for the 2019 crop year will now take place on any crop with a contract change date prior to November 30, 2017. This pertains to all Approved Insurance Providers (AIP).

If your insured had elected, or currently has the +10 Percent Option (PT) on their fall policy, we will automatically change these policies to the +5 Percent Option (PF) for the applicable, and succeeding crop year(s). If they wish to not have the +5 Percent Option (PF) on their policy they will need to change this by the applicable Sales Closing Date.

Yield Cup (YC) option

The RMA also added a new Yield Cup (YC) option for 2018 that impacted crops with a contract change date of November 30, 2017 or later. For any crop with a contract change date prior to November 30, 2017, the new YC option will now be applicable for 2019. Cups prevent the Approved Yield on an Actual Production History (APH) database from dropping more than 10% from the previous year’s approved APH yield. In prior years, if your insured had the Trend Adjustment (TA), Yield Exclusion (YE), or Yield Adjustment (YA) options on their County/Crop they would not have been eligible to use a Cup when calculating their yield. For those 2018 crops impacted by the change, Cups were applied to your insured’s database if the cupped yield resulted in a higher yield than the other options. This same change will be completed in 2019 as well.

Impacted policies will automatically have the YC option applied for 2019 (where applicable), unless the insured opts out by the applicable Sales Closing Date (SCD). Insureds also have until the applicable Production Reporting Date (PRD) to opt out of the YC option on a unit level. There will be a rate differential applied if a Cup is used to determine their approved APH yield.

Please contact your underwriter or marketing rep with any questions.


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