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Use or disclosure of information or data 4 Proprietary Property of Watts & Associates, Inc. <br />contained on this sheet is subject to the <br />restrictions on the title page of this proposal. Copyright © 2020 Watts & Associates, Inc. All Rights Reserved. <br />The following outlines an example of using the existing crop insurance infrastructure: <br />Each year, growers in the staging area would purchase crop insurance for their farming <br />operation through their local crop insurance agent (crop insurance products are offered <br />from insurance departments of agricultural lending institutions as well as private <br />insurance companies). <br />In the event the Authority initiates an event that results in flooding of the staging area, the <br />Authority would notify the growers of the event to alert them of potential impact to crops <br />being produced in the staging area. <br />Growers that experience a loss due to a Comprehensive Project induced flood event <br />would contact their crop insurance agent to file a claim of loss. <br />The insurance agent would contact a crop adjustor to determine the percentage of crop <br />loss. The adjustor would utilize established loss adjustment procedures for the crop (e.g., <br />corn, soybeans, wheat, etc.) as developed by RMA (see appendix C). <br />Upon completion of the loss adjustment procedure and determination of the amount of <br />indemnity due the grower, the grower would submit the documentation to the Authority <br />for compensation (e.g., payment of indemnity). All losses and loss adjustment expenses <br />would be paid by the diversion authority and/or its risk-bearing partners. <br />It must be noted that the Federal Crop Insurance program provides a mechanism for growers to <br />insure their crops for a wide variety of perils, including flooding. However, “intentional <br />flooding” of agricultural land is currently not a covered peril; the Billings Regional Office of the <br />RMA has provided specific guidance to this point. <br />Phase I will require an agreement between the Authority and the grower to confirm that the <br />Authority will provide indemnity to the grower (based on the loss adjustment procedure <br />previously described) in the event of a Comprehensive Project flood event that was the result of <br />crop loss. It would also require an agreement with one or more Federal Crop Insurance <br />providers to perform loss adjustment activities for a specified fee. No notice of loss would be <br />filed for the grower’s Federal Crop Insurance policy. <br />Benefits of the Phase I approach include but are not necessarily limited to the following: <br />The Authority can utilize the existing framework of crop insurance to provide coverage <br />in the staging area without having to sell insurance and conduct loss adjustment. Crop <br />policies and loss adjustment procedures are already provided within the crop insurance <br />industry. <br />Growers already understand the current crop insurance system, thus minimizing <br />educational requirements. <br />Utilization of the existing crop insurance program assists in preventing disincentives <br />(e.g., “gaming the system”) since fraud, waste, and abuse functions are already in place. <br />Phase I is essentially a binary approach to crop loss support to the growers in the staging area. If <br />crop loss is caused by a Comprehensive Project flooding event, the Authority would provide the <br />indemnification. If the crop loss is caused by a natural event, indemnification would be provided <br />via existing procedures delivered by crop insurance companies affiliated with RMA.