Subsidized vessels and operators: Marine hull insurance; underwriters approval,

[Federal Register: September 23, 1998 (Volume 63, Number 184)]

[Proposed Rules]

[Page 50849-50850]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr23se98-30]

DEPARTMENT OF TRANSPORTATION

Maritime Administration

46 CFR Part 249

[MARAD 98-4395]

RIN No. 2133-AB 36

Approval of Underwriters for Marine Hull Insurance

AGENCY: Maritime Administration, Department of Transportation.

ACTION: Advance Notice Of Proposed Rulemaking; request for comments.

SUMMARY: The Maritime Administration (MARAD) is soliciting comments from interested persons concerning the need to amend the existing regulations governing the placement of marine hull insurance on subsidized and Title XI program vessels. The existing regulations were promulgated in 1988 and provided, among other things, the criteria and procedures for certain foreign underwriters to participate in the writing of hull insurance on MARAD program vessels.

DATES: Comments are requested by October 23, 1998. COMMENTS: Signed written comments should refer to the docket number that appears at the top of this document and must be submitted to the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 7th Street SW, Room 7210, Washington, DC 20590. All comments received will be available for examination at the above address between 10 a.m. and 5 p.m., e.t. Monday through Friday, except Federal Holidays. An electronic version of this document is available on the World Wide Web at http:\dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: Edmond J. Fitzgerald, Director, Office of Subsidy and Insurance, Maritime Administration, Washington, DC 20590. Telephone 202/366-2400.

SUPPLEMENTARY INFORMATION: The 1988 explanation of the final rulemaking (53 FR 23119) provided in part that:

Members of the Institute of London Underwriters (ILU) would remain eligible subject to prescribed trust fund and limitation on risk requirements. On the basis of a comment by one American carrier, the final rule specifically reserves MARAD's right to review this eligibility at any time.

It has come to MARAD's attention that the ILU and another London based insurance organization, the London International Insurance and Reinsurance Market Association (LIRMA) have voted to merge their two organizations in the near future. The new organization will be called the International Underwriters Association (IUA) of London. MARAD's Director, Office of Marine Insurance had discussions with the incoming chairman of the IUA and the chairman indicated that the new organization will not have the same eligibility criteria as the ILU or any internal oversight activities. In view of this, MARAD is seeking comments concerning how to deal with existing ILU member companies after the merger. Will it be necessary to qualify ILU member companies on an individual ``ad hoc'' basis after the merger is implemented? MARAD has a number of questions it would like to receive comment on:

(1) Should companies who were in the ILU and approved to write insurance on MARAD program vessels maintain their eligibility for some period, say a year after merger, while they are reviewed on an individual basis?

(2) Should ILU member companies (post merger) be subject to the same requirements of ``Other Foreign Underwriters'' under section 249.5(c) Eligibility criteria?

(3) If an ILU member company has been previously approved under 249.5(c), in the French or Scandinavian market for example, should that eligibility be governing?

(4) Should ILU member companies appearing on the Quarterly Listing of Alien Insurers compiled by the National Association of Insurance Commissioners be eligible for MARAD underwriting provided they remain in good standing and remain on this list?

(5) If an ILU member company is the subsidiary or affiliate of a company that is approved under Section 249.5(c), should it have the benefit of that

[[Page 50850]]

approval if a satisfactory parent company or similar guarantee is provided?

(6) Any other aspect of this issue.

By Order of the Maritime Administrator.

Dated: September 18, 1998. Joel C. Richard, Secretary.

[FR Doc. 98-25408Filed9-22-98; 8:45 am]

BILLING CODE 4910-81-P