Supplemental Coverage Option (SCO)

All Reinsurance Years

The Supplemental Coverage Option, or SCO, is based on the planted, insurable acres of an underlying, or "companion", MPCI coverage. SCO must be purchased from the same AIP who writes the required underlying/companion coverage and must be added to the same policy as the underlying/companion coverage. Consult the actuarial documents for SCO availability and Sales Closing Dates by state/county/crop.

The System was designed to treat SCO as an option even though the RMA did not issue an option code in the ADM. If available for the Reinsurance Year, State, County, and Crop, the System will display an internal "SCO" option code for selection when adding or editing the underlying/companion coverage, which is required to insure the option. Once elected, the System will use the SCO option code from the ADM when populating SCO information on forms as well as determining the appropriate SCO premium rating and claim calculations. In order to do this, the System will use the underlying/companion coverage Plan Code and convert it to the appropriate SCO Plan Code when reading the ADM tables for applicable SCO lines. The following crosswalk will be used to determine the conversion when needed:

If the underlying/companion coverage Plan Code is Then the new SCO Plan Code is
"01", "55" "31"
"02" "32"
"03" "33"
"Plan 90" (for Category B and C crops) "31"
• Unless the grower qualifies as a Limited Resource Farmer or Beginning Farmer/Rancher, a separate Admin Fee will be added to the underlying/companion coverage fee for this endorsement. For example, a $30.00 Admin Fee will apply to a coverage reflecting additional coverage but no SCO Option. A $60.00 Admin Fee will apply to a coverage reflecting additional coverage and an SCO option. This fee is not due if the producer has no coverage under the endorsement for any acreage in the county.
• Unless the underlying/companion coverage is canceled, terminated, or the SCO option is automatically canceled (due to enrollment in the Farm Service Agency's (FSA) Agricultural Risk Coverage (ARC) program), SCO is a continuous endorsement.
• For the 2020 + RYs, the RMA is assessing a penalty when SCO is elected on a coverage and found to be enrolled in ARC or PLC since the same FSN cannot have both. To offset the cost incurred by the AIP in servicing the SCO Endorsement, the following penalties will apply by FSN for SCO acreage that was reported as insurable but later determined to be enrolled in ARC or PLC and therefore, uninsurable:
• The acreage for the FSN(s) will be void,
• No indemnity will be payable, and
• The insured is required to pay 60 percent of the premium due.

In addition to the Add New Policy, Add New Coverage, View Coverage, and Maintain Coverage pages, SCO changes are visible on the Add New Detail Line, Maintain Detail Line, Fast Edit AR, and View Detail Lines pages within the System.

When you edit an SCO detail line (open the policy, and on the Coverages tab, expand the coverage to view the related detail line and click the child line hyperlink (this ends in -0000)), these new fields display on the Maintain Detail Lines page:

a. Expected County Value: This field’s label and value depend on the underlying/companion Coverage Plan Code. When the underlying/companion Coverage Plan is:
• "01", "02", "55", or "Plan 90 (Category B or C)", the Expected County Yield displays. (An underlying/companion Coverage Plan of "01" or "02" indicates an SCO Plan of "31" or "32" respectively. Plan 55 and Plan 90 Category B and C indicates an SCO Plan of "31".)
• "03", the Expected County Revenue displays. (An underlying/companion Coverage Plan of "03" indicates an SCO Plan of "33".)
b. Trigger Value: This value is calculated based on the SCO Plan Code and whether the Expected County Yield or Expected County Revenue is displayed. If the SCO Plan Code is:
• "31", then this value is the Expected Area Yield x Area Loss Trigger.
• "32", then this value is the Expected Area Yield x Projected Price x Area Loss Trigger.
• "33", then this value is the Expected Area Revenue x Area Loss Trigger.

NOTE: The Area Loss Trigger is a set percentage of 86% for all SCO Plan Codes. The Trigger Value is 86% of the Expected County Yield (if Plans "01" , "02", or "90 Cat B or C") or Expected County Revenue (if Plan "03"). The Trigger Value is used to determine a Payment Factor, which is the percentage of policy protection a grower is paid in the event of a loss.

c. Expected Commodity Value: This is the liability from the MPCI detail (parent) line divided by the Coverage Level % from the underlying/companion MPCI coverage.
d. Total Guarantee: This value is the Expected Commodity Value x Coverage Range.

NOTE: The Coverage Range is the range between the Coverage Level elected on the underlying/companion coverage record and the Area Loss Trigger, which is a set percentage of 86%. For example, if the Coverage Level on the underlying/companion coverage record is 70%, the Coverage Range would be 70-86%. If the underlying/companion coverage level is 80%, the Coverage Range would be 80-86%. Coverage Ranges cannot exceed the Area Loss Trigger of 86%.

e. Policy Protection (Liability): This value is the Total Guarantee x Protection Factor.

The Fast Edit AR page displays all detail lines that exist for the selected coverage(s), planting season, and Acreage Reporting Date (ARD).

When adding SCO to detail lines from within Fast Edit AR, upon save, the System creates an SCO child line for each detail line associated with the SCO coverage. These lines are read-only and display below their corresponding detail lines with “[Related]” in the Unit Number column. Any changes made to an SCO child line’s parent line are carried to the SCO child line; the child line cannot be deleted—it will only be removed if SCO no longer applies to the coverage.

NOTE: Category C crops are not available in the Fast Edit AR, so the System will create SCO child lines on save of the Maintain Detail Line page. SCO is not currently supported by the PAW "Apply Insurable Acres" function. Updates to create an SCO child line from the PAW “Apply Insurable Acres” function and link the PAW information from the Parent Detail Line will be implemented in a later release. This update will also include copying all fields from the Parent PAW to the SCO Child PAW—making the SCO Child PAW non-editable.

These values are shown for the SCO child line:

a. Land ID: The child line Land ID is blank as any Land IDs added to the parent detail line from this page are carried to the related child detail line.
b. Options: "SCO" is displayed in the options field for the child line.
c. Approved Yield: This is the Trigger Value calculated and saved on the SCO child record, if available. This value is brought over from the parent MPCI detail line and calculated based on the SCO Plan Code.
d. Plant Date: This is the plant date provided for the parent line.
e. Share/Shareholder: The Share/Shareholder percent from the parent line. Any Shareholders added to the parent detail line from this page are carried to the related child detail line on save. The Share/Shareholder for an SCO child line is read-only as they are populated with the values from the related parent MPCI detail line.

NOTE: The Uninsurable Reason dropdown is read-only if the Enrolled in ARC checkbox has been selected on the detail line.

These values are shown for the SCO child line created on save of the MPCI detail line:

a. Land ID: The child line Land ID is blank as any Land IDs added to the parent detail line from this page are carried to the related child detail line.
b. Trigger Value: This is the Trigger Value calculated and saved on the SCO child record. This value is calculated based on the SCO Plan Code.
c. Expected County Value: Depending on the SCO Plan Code, this is either the "Expected County Yield" or the "Expected County Revenue".
d. Tot Prem/Prod Prem: These are the Total Premium and Producer Premium values calculated and saved on the SCO child record.

A checkbox, Include SE on SCO Coverage, displays on the Add New Policy and Add/Maintain Coverage pages when the Cottonseed Endorsement (SE) is elected with SCO.

• If Include SE on SCO Coverage selected, upon save, the System will populate SCOCoverageOption field in the db with "SE" and create SCO/SE child lines.

+MPCI Parent detail line

-MPCI SE child line

-SCO Child line

--SCO/SE child line

• If Include SE on SCO Coverage not selected, the System will not populate SCO/SE child lines:

+MPCI Parent detail line

-MPCI SE child line

-SCO Child line

For Winter Wheat in 2015 only

On the Add New/Maintain Detail Line pages, when Winter Wheat acreage is ineligible for SCO due to ARC enrollment, a user can opt an insureds out of SCO coverage for the 2015 RY using the SCO Opt Out checkbox that displays when SCO is elected on a coverage.

NOTE: This checkbox is not available if the Uninsurable checkbox is marked, there is a Map Area (Subcounty code) of "URA", or if Enrolled in ARC is marked.

When the SCO Opt Out checkbox is marked, on save, the System sets the SCO detail line to "Uninsurable" (line has a NonPremium AR Code of "O – Ineligible for SCO coverage; opted out of SCO coverage for apportion of Winter Wheat for 2015 only" and the SCO child line will not rate) and validate that planted, insurable acres are entered on the parent detail line (reported acres must be greater than "0", the Uninsurable checkbox cannot be marked, and a Plant Date must exist – No Prevented Planting).

On the View Detail Line page of the SCO child line, SCO still appears as an option for the coverage, but the Uninsurable flag and Uninsurable Reason are shown and no premium is generated.

For All Other Crops

On the Add New/Maintain Detail Line pages, when a detail line is ineligible for SCO coverage due to ARC enrollment, a user marks the Enrolled in ARC checkbox to designate the land as ineligible for SCO.

NOTE: This checkbox is not available if the Uninsurable checkbox is marked or there is a Map Area (Subcounty code) of "URA".

When the Enrolled in ARC checkbox is marked, on save, the System sets the SCO detail line to "Uninsurable" (line has a NonPremium AR Code of "J – Ineligible for SCO coverage: producer elected ARC at FSA" and the SCO child line does not rate) and validate that planted, insurable acres are entered on the parent detail line (reported acres must be greater than "0", the Uninsurable checkbox cannot be marked, and a Plant Date must exist – No Prevented Planting).

On the View Detail Line page of the SCO child line, SCO still appears as an option for the coverage, but the Uninsurable flag and Uninsurable Reason are shown and no premium is generated.

When STAX coverage exists on the same policy where SCO is also elected (not on the same coverage, per RMA), then the Add New/Maintain Coverage, Add/Maintain APH, and Fast Edit PR pages display differently.

For more information on STAX, see "Stacked Income Protection (STAX & STAX-HPE)".

The Add New/Maintain Coverage Page

If a YP (01), RP (02), RPHPE (03), YDO (55), or Plan 90 Category B and C companion policy to STAX has SCO elected on the base coverage and the Related STAX Coverage checkbox is marked on the base coverage (a), an Added Land Coverage field displays below the Options grids (b).

This new field contains two options, “SCO” and “STAX”, to allow a user to indicate which policy applies to land that is added to the farming operation after the Production Reporting Date (but before the Acreage Reporting Date). If no selection is made, the System defaults to “SCO”.

The Add/Maintain APH Pages

For a YP (01), RP (02), or RPHPE (03) companion policy to STAX, when the Related STAX Coverage checkbox is marked and SCO has been elected, then in the APH, a Related Coverage field is displayed so a user can designate (by Production Reporting Date) if the insurable, planted acres for that unit will be covered under SCO or STAX. If SCO is selected, an SCO child line is created and a STAX detail line will not be created on the related STAX coverage. The System will display a warning upon save if these STAX and Added Land are selected together. If no selection is made in the Related Coverage field will default to “SCO”.

When entering a Pre-Acceptance Worksheet (PAW), the following enhancements were made for coverages with the SCO Option:

• If a user selects "YES" to the Apply Insurable Acres popup (elected via parent/base MPCI detail line), the System will create an SCO child line for the Insurable Acre value.
• The System will not allow a user to update the PAW if the link is selected via SCO child line. Any updates/changes must be made via the PAW link for the parent detail line.
• PAW information applied to the parent detail line will copy to the SCO child detail line, including the PAW sign date, Required Questions, and all block details. The System will update SCO status to match that of the parent detail line.

A Written Agreement cannot be requested for the Supplemental Coverage Endorsement (SCO) in a State/County where it is not offered in the standard ADM. However, an approved and accepted WA requested for an underlying MPCI coverage may be applicable to the SCO coverage.

As such, the WA functionality that was already in place for MPCI has been extended to include the associated SCO Endorsement, when elected on the MPCI coverage and when the approved and accepted WA allows. The functionality includes the R-Record submission, WA ADM_ICE table application to the WA coverage and MPCI records, and the application of the WA # and WA Land ID to the P09, P14, and P11 records.

If SCO is elected on an active MPCI coverage and a user adds a Written Agreement via the Utilities tab or coverage page, then:

• If the underlying Plan Code is 31, 32, or 33, coverages will not populate in the Requested Crop dropdown or in the Requested Plan dropdown on the Add New and Maintain Written Agreement pages;
• SCO will not populate in the Reference Option dropdown on the Add New and Maintain Written Agreement pages or the Option Code dropdown on the Add New/Maintain WA Detail Line page.
• Written Agreement applicable to the underlying MPCI Coverage and/or MPCI Detail Line will also be applicable to the SCO Coverage and/or SCO Detail Line, if allowable.

To elect SCO on an underlying/companion coverage, when creating a new policy or adding/editing a coverage to/on an existing policy, in the Crop Options selection box, select "SCO - Supplemental Coverage Option" and then click Add >. The SCO option is moved to the Selected Options box. Within the System, any available option can be elected in conjunction with the SCO option. However, the System will only transmit the allowable options (SR, SE, and HB—"HR" is an internal option as well) on the SCO Coverage P14 record. Also, the System will only apply the allowable options (SR, SE, HR, and HB) to the SCO Premium P11 record.

In the example depicted above, the SCO option was selected and moved into the Selected Options box.

Once the SCO option is applied to the underlying/companion coverage:

In the example depicted above, the SCO option was selected on the coverage and the SCO child line is present on the Detail Lines tab.

• If detail lines already exist, then an SCO child line will automatically be created for each underlying/companion coverage detail line (i.e., parent detail line) that reflects an insurable planted acre value.
• If detail lines do not already exist, when adding detail lines to the coverage with the SCO endorsement, upon save, the System will create an SCO detail (child) line for each line associated with the underlying/companion coverage that reflects an insurable planted acre value. The SCO child lines are in read-only format and automatically updated when any changes are made to their corresponding parent lines.

NOTE: SCO does not apply to uninsurable acres or acres that were prevented from being planted. Therefore, child lines will not be created when these scenarios exist. Also, if SCO child lines exist and the SCO Option is removed from the coverage record, all SCO child lines will be removed at save of the coverage record.