Question: What are the procedures for correcting mistakes made in submitting the applicant's name and taxpayer identification number on a crop insurance policy?
Answer: Adapted from information provided by Steve Griffin, AFIS, crop insurance consultant, West Des Moines, Iowa; and Steve Johnson, Iowa State University Extension farm management specialist.
The March 15 deadline to make changes for federal crop insurance coverage for this year has passed. However, three changes to note with your 2011 coverage decisions are still important to understand and consider.
1) The USDA Risk Management Agency (RMA) has moved to the Common Crop Insurance or COMBO policy. This combines the past yield-based and revenue-based policies into a single policy with multiple options. New names such as Yield Protection (YP), Revenue Protection (RP) and Revenue Protection with the Harvest Price Exclusion (RPE) have replaced the previous acronyms used for crop insurance coverage at the farm level.
2) The projected prices of $6.01 per bushel for corn and $13.49 per bushel for soybeans based on futures prices during February, along with price volatility factors, have increased the 2011 premiums for crop insurance. So what you pay for crop insurance coverage has gone up. That increase is roughly 50% over the 2010 premiums considering similar products, level of coverage and unit structure selected.
3) Another change in the new COMBO policy are provisions and procedures for correcting mistakes made in submitting the applicant's name and tax payer identification number on the crop insurance application, transfer, or policy change form.
Names and ID numbers need to exactly match
If the applicant's name doesn't exactly match the reported tax identification number, typically the insured's social security number or the employer's identification number on file with the Internal Revenue Service, the policy and its coverage can be voided.
Previously, an error made in the applicant's name (examples include using a nickname, a middle name used as a first name, an incomplete corporate name or a misspelling) could be easily corrected if caught before the annual acreage reporting date after the crop is planted. This date is typically June 30 or July 15, depending on the Midwest state.
A mistake in the tax identification number could also have been corrected (the applicant's signature is required) by the applicant before the acreage reporting date. Both of these corrections (an applicant's name and identification number) were allowed unless there was evidence of intentional misrepresentation, a fairly high legal standard that requires proof of intent.
The changes in the new COMBO policy increase the requirements of the applicant. Under the new policy, if the name or taxpayer identification is incorrect the applicant must now prove that the error was "inadvertent." The burden of proof is now on the applicant and the legal standard is less defined.
For farm management information and analysis go to ISU's Ag Decision Maker site www.extension.iastate.edu/agdm and ISU Extension farm management specialist Steve Johnson's site www.extension.iastate.edu/polk/farmmanagement.htm.