7 U.S.C. § 1515 : US Code - Section 1515: Program compliance and integrity

Search 7 U.S.C. § 1515 : US Code - Section 1515: Program compliance and integrity

(a) Purpose
(1) In general
The purpose of this section is to improve compliance with, and
the integrity of, the Federal crop insurance program.
(2) Role of insurance providers
The Corporation shall work actively with approved insurance
providers to address program compliance and integrity issues as
such issues develop.
(b) Notification of compliance problems
(1) Notification of errors, omissions, and failures
The Corporation shall notify in writing an approved insurance
provider of any error, omission, or failure to follow Corporation
regulations or procedures for which the approved insurance
provider may be responsible and which may result in a debt owed
the Corporation.
(2) Time for notification
Notice under paragraph (1) shall be given within 3 years after
the end of the insurance period during which the error, omission,
or failure is alleged to have occurred, except that this time
limitation shall not apply with respect to an error, omission, or
procedural violation that is willful or intentional.
(3) Effect of failure to timely notify
Except as provided in paragraph (2), the failure to timely
provide the notice required under this subsection shall relieve
the approved insurance provider from the debt owed the
Corporation.
(c) Reconciling producer information
The Secretary shall develop and implement a coordinated plan for
the Corporation and the Farm Service Agency to reconcile all
relevant information received by the Corporation or the Farm
Service Agency from a producer who obtains crop insurance coverage
under this chapter. Beginning with the 2001 crop year, the
Secretary shall require that the Corporation and the Farm Service
Agency reconcile such producer-derived information on at least an
annual basis in order to identify and address any discrepancies.
(d) Identification and elimination of fraud, waste, and abuse
(1) FSA monitoring program
The Secretary shall develop and implement a coordinated plan
for the Farm Service Agency to assist the Corporation in the
ongoing monitoring of programs carried out under this chapter,
including - 
(A) at the request of the Corporation or, subject to
paragraph (2), on its own initiative if the Farm Service Agency
has reason to suspect the existence of program fraud, waste, or
abuse, conducting fact finding relative to allegations of
program fraud, waste, or abuse;
(B) reporting to the Corporation, in writing in a timely
manner, the results of any fact finding conducted pursuant to
subparagraph (A), any allegation of fraud, waste, or abuse, and
any identified program vulnerabilities; and
(C) assisting the Corporation and approved insurance
providers in auditing a statistically appropriate number of
claims made under any policy or plan of insurance under this
chapter.
(2) FSA inquiry
If, within five calendar days after receiving a report
submitted under paragraph (1)(B), the Corporation does not
provide a written response that describes the intended actions of
the Corporation, the Farm Service Agency may conduct its own
inquiry into the alleged program fraud, waste, or abuse on
approval from the State director of the Farm Service Agency of
the State in which the alleged fraud, waste, or abuse occurred.
If as a result of the inquiry, the Farm Service Agency concludes
further investigation is warranted, but the Corporation declines
to proceed with the investigation, the Farm Service Agency may
refer the matter to the Inspector General of the Department of
Agriculture.
(3) Use of field infrastructure
The plan required by paragraph (1) shall provide for the use of
the field infrastructure of the Farm Service Agency. The
Secretary shall ensure that relevant Farm Service Agency
personnel are appropriately trained for any responsibilities
assigned to the personnel under the plan. At a minimum, the
personnel shall receive the same level of training and pass the
same basic competency tests as required of loss adjusters of
approved insurance providers.
(4) Maintenance of provider effort
(A) In general
The activities of the Farm Service Agency under this
subsection do not affect the responsibility of approved
insurance providers to conduct any audits of claims or other
program reviews required by the Corporation.
(B) Notification of providers
The Corporation shall notify the appropriate approved
insurance provider of a report from the Farm Service Agency
regarding alleged program fraud, waste, or abuse, unless the
provider is suspected to be included in, or a party to, the
alleged fraud, waste, or abuse.
(C) Response
An approved insurance provider that receives a notice under
subparagraph (B) shall submit a report to the Corporation,
within an appropriate time period determined by the Secretary,
describing the actions taken by the provider to investigate the
allegations of program fraud, waste, or abuse contained in the
notice.
(5) Corporation response to provider reports
(A) Prompt response
If an approved insurance provider reports to the Corporation
that the approved insurance provider suspects intentional
misrepresentation, fraud, waste, or abuse, the Corporation
shall make a determination and provide, within 90 calendar days
after receiving the report, a written response that describes
the intended actions of the Corporation.
(B) Cooperative effort
The approved insurance provider and the Corporation shall
take coordinated action in any case where misrepresentation,
fraud, waste, or abuse is alleged.
(C) Failure to timely respond
If the Corporation fails to respond as required by
subparagraph (A), an approved insurance provider may request
the Farm Service Agency to assist the provider in an inquiry
into the alleged program fraud, waste, or abuse.
(e) Consultation with State FSA committees
The Secretary shall establish procedures under which the
Corporation shall consult with the State committee of the Farm
Service Agency for a State with respect to policies, plans of
insurance, and material related to such policies or plans of
insurance (including applicable sales closing dates, assigned
yields, and transitional yields) offered in that State under this
chapter.
(f) Detection of disparate performance
(1) Covered activities
The Secretary shall establish procedures under which the
Corporation will be able to identify the following:
(A) Any agent engaged in the sale of coverage offered under
this chapter where the loss claims associated with such sales
by the agent are equal to or greater than 150 percent (or an
appropriate percentage specified by the Corporation) of the
mean for all loss claims associated with such sales by all
other agents operating in the same area, as determined by the
Corporation.
(B) Any person performing loss adjustment services relative
to coverage offered under this chapter where such loss
adjustments performed by the person result in accepted or
denied claims equal to or greater than 150 percent (or an
appropriate percentage specified by the Corporation) of the
mean for accepted or denied claims (as applicable) for all
other persons performing loss adjustment services in the same
area, as determined by the Corporation.
(2) Review
(A) Review required
The Corporation shall conduct a review of any agent
identified pursuant to paragraph (1)(A), and any person
identified pursuant to paragraph (1)(B), to determine whether
the higher loss claims associated with the agent or the higher
number of accepted or denied claims (as applicable) associated
with the person are the result of fraud, waste, or abuse.
(B) Remedial action
The Corporation shall take appropriate remedial action with
respect to any occurrence of fraud, waste, or abuse identified
in a review conducted under this paragraph.
(3) Oversight of agents and loss adjusters
The Corporation shall develop procedures to require an annual
review by an approved insurance provider of the performance of
each agent and loss adjuster used by the approved insurance
provider. The Corporation shall oversee the conduct of annual
reviews and may consult with an approved insurance provider
regarding any remedial action that is determined to be necessary
as a result of the annual review of an agent or loss adjuster.
(g) Submission of information to Corporation to support compliance
efforts
(1) Types of information required
The Secretary shall establish procedures under which approved
insurance providers shall submit to the Corporation the following
information with respect to each policy or plan of insurance
offered under this chapter:
(A) The name and identification number of the insured.
(B) The agricultural commodity to be insured.
(C) The elected coverage level, including the price election,
of the insured.
(2) Time for submission
The information required by paragraph (1) with respect to a
policy or plan of insurance shall be submitted so as to ensure
receipt by the Corporation not later than the Saturday of the
week containing the calendar day that is 30 days after the
applicable sales closing date for the crop to be insured.
(h) Sanctions for program noncompliance and fraud
(1) False information
A producer, agent, loss adjuster, approved insurance provider,
or other person that willfully and intentionally provides any
false or inaccurate information to the Corporation or to an
approved insurance provider with respect to a policy or plan of
insurance under this chapter may, after notice and an opportunity
for a hearing on the record, be subject to one or more of the
sanctions described in paragraph (3).
(2) Compliance
A person may, after notice and an opportunity for a hearing on
the record, be subject to one or more of the sanctions described
in paragraph (3) if the person is a producer, agent, loss
adjuster, approved insurance provider, or other person that
willfully and intentionally fails to comply with a requirement of
the Corporation.
(3) Authorized sanctions
If the Secretary determines that a person covered by this
subsection has committed a material violation under paragraph (1)
or (2), the following sanctions may be imposed:
(A) Civil fines
A civil fine may be imposed for each violation in an amount
not to exceed the greater of - 
(i) the amount of the pecuniary gain obtained as a result
of the false or inaccurate information provided or the
noncompliance with a requirement of this chapter; or
(ii) $10,000.
(B) Producer disqualification
In the case of a violation committed by a producer, the
producer may be disqualified for a period of up to 5 years from
receiving any monetary or nonmonetary benefit provided under
each of the following:
(i) This chapter.
(ii) The Agricultural Market Transition Act (7 U.S.C. 7201
et seq.), including the noninsured crop disaster assistance
program under section 196 of that Act (7 U.S.C. 7333).
(iii) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
(iv) The Commodity Credit Corporation Charter Act (15
U.S.C. 714 et seq.).
(v) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281
et seq.).
(vi) Title XII of the Food Security Act of 1985 (16 U.S.C.
3801 et seq.).
(vii) The Consolidated Farm and Rural Development Act (7
U.S.C. 1921 et seq.).
(viii) Any law that provides assistance to a producer of an
agricultural commodity affected by a crop loss or a decline
in the prices of agricultural commodities.
(C) Disqualification of other persons
In the case of a violation committed by an agent, loss
adjuster, approved insurance provider, or other person (other
than a producer), the violator may be disqualified for a period
of up to 5 years from participating in any program, or
receiving any benefit, under this chapter.
(4) Assessment of sanction
The Secretary shall consider the gravity of the violation of
the person covered by this subsection in determining - 
(A) whether to impose a sanction under this subsection; and
(B) the type and amount of the sanction to be imposed.
(5) Disclosure of sanctions
Each policy or plan of insurance under this chapter shall
provide notice describing the sanctions prescribed under
paragraph (3) for willfully and intentionally - 
(A) providing false or inaccurate information to the
Corporation or to an approved insurance provider; or
(B) failing to comply with a requirement of the Corporation.
(6) Insurance fund
Any funds collected under this subsection shall be deposited
into the insurance fund established under section 1516(c) of this
title.
(i) Annual report on program compliance and integrity efforts
(1) Report required
The Secretary shall submit to the Committee on Agriculture of
the House of Representatives and the Committee on Agriculture,
Nutrition, and Forestry of the Senate an annual report describing
the operation of this section during the preceding year and
efforts undertaken by the Secretary and the Corporation to carry
out this section.
(2) Information regarding fraud, waste, and abuse
The report shall identify specific occurrences of waste, fraud,
or abuse and contain an outline of actions that have been or are
being taken to eliminate the identified waste, fraud, or abuse.
(j) Information management
(1) Systems upgrades
The Secretary shall upgrade the information management systems
of the Corporation used in the administration and enforcement and
this chapter. In upgrading the systems, the Secretary shall
ensure that new hardware and software are compatible with the
hardware and software used by other agencies of the Department to
maximize data sharing and promote the purpose of this section.
(2) Use of available information technologies
The Secretary shall use the information technologies known as
data mining and data warehousing and other available information
technologies to administer and enforce this chapter.
(3) Use of private sector
The Secretary may enter into contracts to use private sector
expertise and technological resources in implementing this
subsection.
(k) Funding
(1) Available funds
To carry out this section and sections 1502(c), 1506(h),
1508(a)(3)(B), and 1508(f)(3)(A) of this title, the Corporation
may use, from amounts made available from the insurance fund
established under section 1516(c) of this title, not more than
$23,000,000 during the period of fiscal years 2001 through 2005,
of which not more than $9,000,000 shall be available for fiscal
year 2001.
(2) Prohibition
None of the funds made available under paragraph (1) may be
used to pay the salaries of employees of the Corporation.