All livestock policies have a provision similar to this one:

We may cancel your policy if no premium is earned for 3 consecutive years. [DRP BP 2(k);

This language is equal to 2(h) in the Common Crop Insurance Policy – Basic Provisions.

Another livestock provision regarding cancellations reads:

The policy cannot be cancelled at any time during the crop year.

Finally, there is a safeguard to protect producers:

We may cancel this policy with express written consent from FCIC.

This was creating a confusion: Are AIPs and agents allowed cancel a dormant livestock policy for 3+ years of inactivity without express consent from the producer? In addition, do AIPs and agents even have the incentive to cancel a dormant policy? If a producer decides in the middle of a crop year, after e.g. 4 years of inactivity, to buy livestock coverage – they would not be able to switch to a new agent and potentially a new AIP, but would instead, for the rest of that crop year, need to work with the agent with whom they signed the original application – many years ago.

This results in dormant policies rolling forward for many years, sometimes without knowledge of the producer. Duplicate policies are not allowed but many AIPs do not transmit those policy records to RMA until there is an endorsement on the policy. Real-world scenario, as reported by an AIP livestock specialist:

I’ve run into this specific issue twice in the last week or two. The producer signed up for LRP in 2022 and never attached an endorsement, then this year after forgetting that original policy was still in place, they signed a new application with a different agent. That new application did not trigger a duplicate error until after an endorsement was signed and coverage was accepted by RMA. This results in the coverage the producer thought they had in place to be canceled. No one wins in this scenario – the agent, AIP, RMA, but most importantly the insured.

To address this issue, starting with RY2027, the language in LRP, LGM and DRP Basic Provisions will be changed to:

Your policy shall be cancelled if no premium is earned for 3 consecutive years.

The earliest this policy provision will have any practical impact will be in June 2027, when policies with no earned premium for RY2025, RY2026 and RY2027 shall be cancelled ahead of RY2028.