USDA’s Risk Management Agency (RMA) announced today that the Federal Crop Insurance Corporation board of directors approved revisions to the Livestock Gross Margin for Dairy Cattle (LGM-Dairy) insurance plan at its Aug. 12, 2010, meeting. The approved revisions include:
· Revised timing of premium payment - Premium for LGM-Dairy will now be due at the end of the coverage period rather than at the time of purchase.
· Subsidy – A premium subsidy will be available for those policies that insure multiple months during the insurance period. The subsidy amount will be determined by a dollar deductible selected by the policyholder (likely to range from $0-$2, in $.10 increments). Policyholders choosing a $0 deductible will receive a lower premium subsidy (18%) and those choosing the highest deductible of $2 will receive a higher premium subsidy (50%).
· Adjustment of feed loads - Based on information provided by the National Milk Producers Federation, feed values have been updated.
· Permit higher deductibles - The maximum dollar denominated deductible has been increased from $1.50 to $2.
RMA and Iowa Agricultural Insurance Innovations, the owner of the LGM insurance plans, are working together to implement the board-approved revisions. The tentative release of the revisions will be in the fall of 2010.
RMA reminds approved insurance providers that solicitation, sales, marketing, or advertising of these changes is prohibited until RMA releases the revised LGM-Dairy insurance plan materials and make them available to the public.