Closing dates for submission of applications.

Insurance period.

111.46

Insured production.

Causes of loss or damage insured against.

411.5

411.6

411.7

411.8

Notice of transfer, damage, removal, etc., of cotton crop.

411.9

Time of loss.

Modification of insurance contract. Fractional units in acres and yields. Forms and instructions.

Maturity dates in 1942 for premium notes under 1942 Cotton Crop Insurance Program.

AUTHORITY: §§ 411.1 to 411.46, inclusive, issued under secs. 506 (e), 507 (c), 509, 516 (b); 52 Stat. 73, 74, 75, 77, 55 Stat. 255; 7 U.S.C. and Sup., 1506 (e), 1507 (c), 1508, 1509, 1516 (b).

SOURCE: §§ 411.1 to 411.46, inclusive, contained in 1942 cotton crop insurance regulations, Board of Directors, approved by Secretary of Agriculture, Dec. 16, 1941; 6 FR. 6442.

MANNER OF OBTAINING INSURANCE

§ 411.1 Application for insurance. Application for insurance, on a form prescribed by the Corporation for such purpose, may be made by any person to cover his interest as landlord, owner, tenant, or sharecropper in cotton to be grown in 1942. An application shall cover each insurance unit in the county in which the applicant has an interest in the cotton crop at the beginning of the planting thereof. Applications must be submitted to the office of the county committee on or before the closing date.

§ 411.2 Acceptance of applications by the Corporation. (a) Upon acceptance of an application by the county committee, the insurance contract shall be in effect: Provided, however, That the average yields and the premium rates specified in the application are those approved by the Corporation for the insurance unit covered by the application; And provided further, That such application is submitted in accordance with the provisions of the application, the regulations in this part and any amendments thereto. Acceptance of the application shall be evidenced by the delivery on behalf of all applicants to the applicant whose signature appears in paragraph 8 of the application, of a copy of the application signed by a member of the county

committee for and on behalf of such committee.

(b) The right is reserved to reject any application for insurance or to limit the insured percentage to 50 percent of the average yield for the insurance unit covered by the application in any case where the county committee determines that the risk to be incurred under the insurance contract warrants either such action.

PREMIUM FOR INSURANCE CONTRACT

§ 411.3 Amount of premium. The premium for each insured on his insurance unit shall be the number of pounds of lint cotton determined by multiplying the acreage of cotton planted, as determined by the Corporation (but not in excess of the maximum insurable acreage), by the premium rate per acre and by the insured's interest in the crop. The premium with respect to each insurance unit shall be regarded as earned when the cotton crop on such unit is planted. The minimum premium payable by the insured with respect to any insurance unit shall be ten pounds.

§ 411.4 Manner of payment of pre(a) Each applicant for insurmium. ance shall sign a note, which is part of his application, for the payment of the premium for his insurance contract. Such notes shall be payable on or before the maturity date specified in § 411.46. If the Corporation makes settlement for any indemnity, or the applicant secures a loan from Commodity Credit Corporation on any indemnity cotton before such date, the maturity date shall become the day on which settlement of the indemnity is computed by the Corporation, or the day application for such loan is made, as the case may be. Said notes shall not bear interest either before or after maturity.

(b) Payments on said notes may be made in whole or in part before maturity, either in cotton or cash, or both. After maturity, payment may be made only in cash. In connection with any payment, there shall be credited on the note the number of whole pounds of lint cotton computed by dividing the payment made (the proceeds of the cotton if cotton is paid) by the cash equivalent price per pound, for the date of payment or the maturity date, whichever occurs first.

(c) If the applicant does not agree to participate in the 1942 Agricultural Conservation Program, the premium on the maximum insurable acreage for each insurance unit listed in the application must be paid at the time the application is submitted to the office of the county committee.

(d) If a note is not paid at maturity, the amount unpaid may be deducted, (1) by the Corporation from any indemnity due to the insured, (2) from the proceeds of any commodity loan to him, and (3) by the Secretary of Agriculture from any payment made to him under the Soil Conservation and Domestic Allotment Act, as amended, or any other act of Congress administered by the United States Department of Agriculture.

(e) Payments in cash shall be made by means of cash or by check, money order, or bank draft, payable to the Treasurer of the United States, and all checks and drafts will be accepted subject to collection, and payments tendered shall not be regarded as paid unless collection is made. When a payment is made in cotton it shall be by means of an instrument acceptable to the Corporation representing salable cotton.

INSURANCE COVERAGE

§ 411.5 Insurance period. Insurance with respect to any insurance unit shall attach at the time the crop is planted and shall cease with respect to any portion of the crop upon weighing in at the gin, other disposal after harvest, upon transfer of interest in unharvested cotton after harvest is commenced, or January 21, 1943 (unless such date is extended in writing by the Corporation), whichever occurs first.

§ 411.6 Insured production. The insured production on each insurance unit shall be the number of pounds of lint cotton determined by multiplying the acreage of cotton planted (as determined by the Corporation, but not in excess of the maximum insurable acreage) by the lint cotton insurance per acre and by the insured's interest in the crop at the beginning of planting.

§ 411.7 Causes of loss or damage insured against. The insurance contract shall cover loss in yield of lint cotton and cottonseed due to any unavoidable

cause or causes but shall not cover damage to quality or loss in yield caused by the neglect or malfeasance of the insured or of any person in his household or employment or connected with the farm as tenant, sharecropper or wage hand, or by theft, use of defective or unadapted seed, failure to properly prepare the land for planting, or properly to plant, harvest or care for the insured crop, or by failure to replant the cotton in areas and under circumstances where the Corporation determines it is customary to replant, or where insurance is written on an irrigated basis, failure to properly apply irrigation water to cotton in proportion to the amount of water available for all irrigated crops.

§ 411.8 Notice of transfer, damage, removal, etc., of cotton crop. (a) Notice in writing on a form prescribed for such purpose shall be given the Corporation at the office of the county committee immediately after the cotton crop, or any portion thereof, is transferred to another person, or, if a loss is probable, immediately after any material damage to the insured crop, or before the crop is harvested, removed, or any other use is made of the insured crop Any such notice shall be given at such time that the Corporation may have reasonable time in which to make appropriate investigation.

(b) Any portion of the cotton crop that has been destroyed or substantially destroyed may be put to another use with the consent of the Corporation subject to an appraisal of the yield by the Corporation that would be realized if such portion of the crop remained for harvest. No acreage planted to cotton shall be considered as put to another use as long as any cotton on such acreage is remaining for harvest. There shail be no abandonment of any crop or portion thereof to the Corporation.

§ 411.9 Time of loss. Loss, if any, shall be deemed to have occurred at the completion of weighing in of the insured crop at the gin or disposal of the harvested crop, or January 21, 1943 (unless such date is extended in writing by the Corporation), whichever occurs first, unless there is a total or substantially total destruction of the entire crop at an earlier time, in which event the loss shall be deemed to have occurred at the time

of such total or substantially total destruction as determined by the Corporation. The cotton crop shall be deemed to have been substantially totally destroyed if the Corporation finds that it has been so badly damaged that farmers generally in the area where the farm is located and on whose farms similar losses occurred would not further care for the crop or harvest any portion thereof.

§ 411.10 Proof of loss. If a loss is claimed, the insured shall submit to the Corporation at the office of the county committee, on a form prescribed for that purpose, a statement in proof of loss containing such information as may reasonably be required regarding the insured crop. Such statement in proof of loss shall be submitted not later than 30 days after the time of loss, unless such time is extended in writing by the Corporation. It shall be a condition precedent to any liability under the insurance contract that the insured establish that any loss for which claim is made has been directly caused by a hazard insured against by the insurance contract during the term of the contract, and that the insured further establish that such loss has not arisen from or been caused by, either directly or indirectly, any of the hazards not insured against by the insurance contract.

§ 411.11 Amount of loss. The amount of loss for which indemnity will be payable with respect to any insurance unit will be the number of pounds of lint cotton by which the insured's interest at the time harvest is commenced (and covered by insurance) of cotton harvested from the insurance unit and weighed in at the gin cotton harvested (and not destroyed) but not weighed in at the gin, and the appraised production of cotton not harvested but left standing in the field is less than his insured production for such unit: Provided, however, That such amount shall be subject to one or more of the following reductions, whenever applicable, multiplied by the insured's interest in the crop at the time harvest is commenced: (a) where any acreage of cotton planted is put to another use with the consent of the Corporation, the number of pounds of cotton equal to the appraised production from such acreage; (b) where any acreage of cotton is not replanted to cotton

in areas and under circumstances where it is customary to replant cotton, the number of pounds of cotton by which the amount of cotton determined as the production from such acreage is less than the product of the acreage, the average yield and the insured percentage: (c) where the actual production of cotton on any acreage is reduced either in whole or in part by causes not insured against, including (1) the use of such acreage for any purpose other than the production of cotton, without the consent of the Corporation, and (2) failure to properly apply irrigation water to cotton in proportion to the water available for all irrigated crops in instances in which insurance is written on an irrigated basis, a number of pounds equal to the appraised reduction in production: Provided, however, That with respect to any acreage on which there is a complete failure in yield due solely to a cause not insured against, such number of pounds shall not be less than the product of the acreage, the average yield and the insured percentage; (d) where any acreage of cotton is planted on acreage of poorer average quality than the average quality of the land considered in establishing the average yield and premium rate and such planting was not the result of an established rotation, or where the Corporation's risk has been increased upon any acreage by (1) the planting of a different variety of cotton than the variety of cotton considered in establishing the average yield or premium rate, (2) the following of a different fertilizer or other practice in connection with the production of cotton on the insurance unit than the practice taken into consideration in establishing the average yield and premium rate for the unit, (3) or the planting of the cotton crop under conditions of immediate hazard without adjustment of the average yield or premium rate to reflect such hazard, a number of pounds equal to the product of such acreage, the insured percentage and the number of pounds of cotton per acre representing the difference between the average yield established and the yield appraised on the basis of the quality of the land seeded, the variety of cotton planted, the practice followed, or the immediate hazard at the time of planting, as the case may be. This adjustment shall be made for any one or more of the reasons listed in this

item, notwithstanding that damage or total destruction of the insured crop occurs by reason of any other cause, (e) To the amount of lint loss, there shall be added a number of pounds of lint cotton equal to 19 percent of the amount of lint loss to cover loss of cottonseed.

PAYMENT OF INDEMNITY

§ 411.12 When indemnity payable. The amount of loss for which the Corporation may be liable with respect to any farm covered by the insurance contract shall be payable within 30 days after satisfactory proof of loss is approved by the Corporation. Notwithstanding the fact that payment of any indemnity is delayed for any reason beyond the time specified, the Corporation shall not be liable for interest or damages on account of such delay.

§ 411.13 Manner of payment of indemnity. (a) In payment of any indemnity, the Corporation shall issue a certificate of indemnity specifying the number of pounds of lint cotton due as indemnity and bearing an expiration date. Such certificate shall not be assignable except for the purposes of securing a commodity loan upon cotton from the Commodity Credit Corporation in the event such loans are made. This certificate may be used (1) to obtain the cash equivalent of the indemnity, (2) to obtain lint cotton in payment of the indemnity (payments in cotton shall be in terms of bales only), (3) to obtain a commodity loan upon the cotton represented by the certificate in accordance with the rules of the Commodity Credit Corporation if loans upon the 1942 cotton crop are made available by Commodity Credit Corporation and the insured is eligible for any such loan.

(b) The cash equivalent of the indemnity shall be the number of pounds of lint cotton specified in the certificate of indemnity multiplied by the cash equivalent price per pound established on the basis of the price of cotton at the applicable spot market on the day the insured's request is received, or the expiration date of the certificate, whichever is earlier, and less a reasonable charge for storage and handling. The schedule of such charges shall be shown on the certificate of indemnity.

(c) If the insured, prior to the expiration date of the certificate, requests payment of his indemnity in lint cotton and the Corporation determines that lint cotton is conveniently available for the payment of the indemnity, a warehouse receipt shall be delivered to the insured in an amount of cotton equal to the indemnity due, subject to adjustment for the location of the cotton paid as indemnity and subject also, where applicable, to deduction of an amount of cotton representing the deductions that would have been made if settlement had been made in the cash equivalent.

(d) The certificate of indemnity may be used for the purpose of obtaining a commodity loan from the Commodity Credit Corporation upon the cotton represented thereby (if loans are made available by the Commodity Credit Corporation with respect to the 1942 cotton crop and the insured is eligible for such loan) in accordance with instructions issued by the Commodity Credit Corporation. If, at any time during the period of the loan, the insured elects to liquidate such loan, he may do so by notifying the Federal Crop Insurance Corporation on a form prescribed by the Corporation and request that the cash equivalent of the indemnity be established. The cash equivalent of the indemnity shall be established on the basis of the prices in effect on the date that the request of the insured is received in the appropriate branch office of the Corporation. The amount of the cash equivalent shall be computed in the same manner as is provided in paragraph (b) of this section. If the amount of the cash equivalent is not sufficient to liquidate the loan and charges in connection therewith, the Corporaton shall notify the insured of such fact.

(e) The expiration date of the certificate of indemnity shall be 15 days after the final date established for obtaining cotton loans with respect to the 1942 cotton crop if such loans are made available by the Commodity Credit Corporation, or 90 days after the date of issuance of the certificate of indemnity, whichever is later. If any of the dates fall on other than a business day, the date of the next following business day shall apply.

§ 411.14 Adjustments in connection with indemnity payments. In any case

314664-42-SUPP. IV— 41

where settlement under the certificate of indemnity has been made by the Corporation, and an adjustment in the amount of indemnity is made for such case, the adjustment shall be made as of the same date as the original settlement.

§ 411.15 Other insurance. If the insured has or acquires any other "allrisk" insurance against substantially all the risks that are insured against under the insurance contract on the crop or portion thereof covered in whole or in part by such insurance contract, whether valid or not, or whether collectible or not, the liability of the Corporation shall not be greater than its share would be if the amount of its obligations were divided equally between the Corporation and such other insurer.

§ 411.16 Subrogation. The Corporation may require from the insured an assignment of all rights of recovery against any party for loss or damage to the extent that payment therefor is made by the Corporation, and the insured shall execute all papers required and shall do everything that may be necessary to secure such rights.

§ 411.17 Suit. No suit or action shall be brought to enforce any claim for loss under the insurance contract unless all the requirements of such contract shall have been complied with.

§ 411.18 Creditors. (a) An interest existing by virtue of a debt, lien, mortgage, garnishment, levy, execution, bankruptcy, or any other legal process shall not be considered an interest in an insured crop within the meaning of the regulations in this part.

(b) Any indemnity payable under an insurance contract shall be paid to and settlement under the certificate of indemnity made to, the insured, or to such other person as may be entitled to the benefits of the insurance contract under the provisions of the regulations in this part, notwithstanding any attachment, garnishment, receivership, trustee process, judgment, levy, equity, or bankruptcy directed against the insured or such other person, or against any indemnity alleged to be due to such person, nor shall the Corporation or any officer, employee, or representative thereof be a proper party to any suit or action with reference to such indemnity or the proceeds thereof

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