USC Chapter 539

USC Chapter 539
in effect

46 U.S.C. § 53901 Definitions

In this chapter: (1) American vessel.—The term “American vessel” includes—(A) a documented vessel with a registry or coastwise endorsement under chapter 121 of this title; (B) an undocumented vessel owned or chartered by or made available to the United States Government; and (C) a tug, barge, or other watercraft (whether or not documented) owned by a citizen of the United States and used in essential water transportation or in the fisheries, except only for sport fishing. (2) Cargo.—The term “cargo” includes a loaded or empty container on a vessel. (3) Transportation in the waterborne commerce of the united states.—The term “transportation in the waterborne commerce of the United States” includes the operation of a vessel in the fisheries, except only for sport fishing. (4) War risks.—The term “war risks” includes, to the extent the Secretary of Transportation determines—(A) any part of a loss excluded from marine insurance coverage under a “free of capture or seizure” clause or analogous clause; and (B) any other loss from a hostile act, including confiscation, expropriation, nationalization, or deprivation.

46 U.S.C. § 53902 Authority to provide insurance

(a) In General.—With the approval of the President, and after such consultation with interested agencies of United States Government as the President may require, the Secretary of Transportation may provide insurance and reinsurance against loss or damage from war risks as provided by this chapter whenever it appears to the Secretary that insurance adequate for the needs of the waterborne commerce of the United States cannot be obtained on reasonable terms and conditions from companies authorized to do insurance business in a State of the United States. (b) Consideration of Risk.—Insurance or reinsurance under this chapter shall be based, insofar as practicable, on consideration of the risk involved. (c) Availability of Vessel During War or National Emergency.—Insurance or reinsurance for a vessel may be provided under this chapter only on the condition that the vessel will be available to the Government in time of war or national emergency.

46 U.S.C. § 53903 Insurable interests

(a) In General.—The Secretary of Transportation may provide insurance and reinsurance under this chapter for—(1) an American vessel, including a vessel under construction; (2) a foreign vessel—(A) owned by a citizen of the United States; or (B) engaged in transportation in the waterborne commerce of the United States or in such other transportation by water or such other services as the Secretary considers to be in the interest of the national defense or national economy of the United States, when so engaged; (3) cargo—(A) shipped or to be shipped on a vessel insurable under this section, including by express or registered mail; (B) owned by a citizen or resident of the United States; (C) imported to or exported from the United States, or sold or purchased by a citizen or resident of the United States, under a contract of sale or purchase the terms of which provide that the risk of loss by war risks or the obligation to provide insurance against war risks is on a citizen or resident of the United States; or (D) shipped between ports in the United States; (4) disbursements, including advances to masters and general average disbursements, and freight and passage money of a vessel insurable under this section; (5) personal effects of an individual on a vessel insurable under this section; (6) loss of life, injury, or detention by an enemy of the United States after capture, with respect to an individual on a vessel insurable under this section; and (7) statutory or contractual obligations or other liabilities of a vessel insurable under this section or of the owner or charterer of such a vessel, of a nature customarily covered by insurance. (b) Considerations for Foreign Vessels.—In determining whether to provide insurance or reinsurance for a foreign vessel, the Secretary shall consider the characteristics, employment, and general management of the vessel by the owner or charterer. (c) Non-War Risks.—Insurance of a risk under subsection (a)(5)–(7), insofar as it involves a liability related to an individual on the vessel, may include risks other than war risks to the extent the Secretary considers advisable.

46 U.S.C. § 53904 Liability insurance for persons involved in war or defense efforts

(a) In General.—The Secretary of Transportation may provide insurance under this chapter against legal liability that a person may incur in providing services or facilities for a vessel if, in the opinion of the Secretary, the insurance—(1) is required in prosecuting a war or for national defense; and (2) cannot be obtained at reasonable rates or on reasonable terms and conditions from approved companies authorized to do insurance business in a State of the United States. (b) Limitations.—Employer liability insurance and worker compensation insurance against legal liability to employees may not be provided under this section.

46 U.S.C. § 53905 Agency insurance

(a) In General.—With the approval of the President, an agency of the United States Government may obtain insurance provided for by this chapter from the Secretary of Transportation, except as provided in sections 17302 and 17303 of title 40. (b) Premium Waivers.—With the approval of the President, the Secretary of Transportation may provide insurance under this chapter at the request of the Secretary of Defense and other agencies the President may prescribe, without payment of an insurance premium if the Secretary of Defense or agency agrees to indemnify the Secretary of Transportation against loss covered by the insurance. The Secretary of Defense and agencies may make such an indemnity agreement. (c) Presidential Approval.—The signature of the President (or an official designated by the President) on the agreement shall be treated as the approval required by section 53902(a) of this title.

46 U.S.C. § 53906 Hull insurance valuation

(a) Stated Valuation.—The valuation in a hull insurance policy for actual or constructive total loss of the insured vessel shall be a stated valuation determined by the Secretary of Transportation. The stated valuation—(1) shall exclude national defense features paid for by the United States Government; and (2) may not exceed the amount that would be payable if the ownership of the vessel had been requisitioned under chapter 563 of this title at the time the insurance attached under the policy. (b) Rejecting Stated Valuation.—Within 60 days after the insurance attaches under a policy referred to in subsection (a) or within 60 days after the Secretary determines the valuation, whichever is later, the insured may reject the valuation and pay, at the rate provided in the policy, premiums based on the asserted valuation the insured specifies at the time of rejection. However, the asserted valuation is not binding on the Government in any subsequent action on the policy. (c) Amount of Claim.—If a vessel is actually or constructively totally lost and the insured under a policy referred to in subsection (a) has not rejected the stated valuation determined by the Secretary, the amount of a claim adjusted, compromised, settled, adjudged, or paid may not exceed the stated valuation. However, if the insured has rejected the valuation, the insured—(1) shall be paid, as a tentative advance only, 75 percent of the stated valuation; and (2) may bring a civil action against the United States in a court having jurisdiction of the claim to recover a valuation equal to the just compensation the court determines would have been payable if the ownership of the vessel had been requisitioned under chapter 563 of this title at the time the insurance attached under the policy. (d) Adjusting Premiums.—If a court makes a determination as provided under subsection (c)(2), premiums paid under the policy shall be adjusted based on the court’s determination and the rates provided for in the policy.

46 U.S.C. § 53907 Reinsurance

(a) In General.—To the extent the Secretary of Transportation is authorized to provide insurance under this chapter, the Secretary may provide reinsurance to a company authorized to do insurance business in a State of the United States. The Secretary may obtain reinsurance from such a company for any insurance provided by the Secretary under this chapter. (b) Rates.—The Secretary may not provide reinsurance at rates less than, nor obtain reinsurance at rates more than, the rates established by the Secretary on the same or similar risks or the rates charged by the insurance company for the insurance reinsured, whichever is more advantageous to the Secretary. However, the Secretary may provide an allowance to the insurance company for the costs of services and facilities the company provides, in an amount the Secretary considers reasonable according to good business practice. The allowance to the company may not include any amount for soliciting or stimulating insurance business.

46 U.S.C. § 53908 Additional insurance privately obtained

With the approval of the Secretary of Transportation, a person having an insurable interest in a vessel may obtain insurance on the vessel with other underwriting agents in addition to the insurance with the Secretary. The Secretary is not entitled to the benefit of the additional insurance.

46 U.S.C. § 53909 War risk insurance revolving fund

(a) In General.—There is a war risk insurance revolving fund in the Treasury. (b) Deposits.—There shall be deposited in the fund amounts appropriated to carry out this chapter and amounts received in carrying out this chapter. (c) Payments.—There shall be paid from the fund amounts for return premiums, losses, settlements, judgments, and all liabilities incurred by the United States Government under this chapter. (d) Investment.—The Secretary of Transportation may request the Secretary of the Treasury to invest such portion of the fund as is not, in the judgment of the Secretary of Transportation, required to meet the current needs of the fund. These investments shall be made by the Secretary of the Treasury in public debt securities of the Government, with maturities suitable to the needs of the fund, and bearing interest rates determined by the Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the Government of comparable maturity. Interest and benefits from the securities shall be deposited in the fund.

46 U.S.C. § 53910 Administrative

(a) Accordance With Commercial Practice.—In carrying out this chapter, the Secretary of Transportation may act in accordance with commercial practice in the marine insurance business. (b) Regulations.—The Secretary may prescribe regulations the Secretary considers appropriate to carry out this chapter. (c) Policies, Rates, and Annual Fees.—The Secretary may prescribe and change forms and policies, and fix and change the amounts insured and rates of premium, under this chapter. (d) Annual Fees.—The Secretary may charge and collect an annual fee in an amount calculated to cover the expenses of processing applications for insurance, employing underwriting agents, and appointing experts under this chapter. (e) Payment of Claims and Judgments.—The Secretary may settle and pay claims, and pay judgments against the United States, related to insurance under this chapter. (f) Underwriting Agents.—(1) In general.—The Secretary may, and when the Secretary finds it practical to do so shall, employ a domestic company or group of domestic companies, authorized to do marine insurance business in a State of the United States, to act as underwriting agent for the Secretary. The services of an underwriting agent may be used in adjusting claims, but a claim may not be paid until approved by the Secretary. (2) Compensation.—The Secretary may allow the company or group of companies reasonable compensation for services as the underwriting agent. The compensation may include an allowance for expenses reasonably incurred by the agent, but may not include any amount for soliciting or stimulating business. (g) Fees For Arranging Insurance.—Except as provided in subsection (f)(2), the Secretary may not pay an insurance broker or other person acting in a similar intermediary capacity a fee or other consideration for participating in arranging insurance when the Secretary directly insures any of the risk. (h) Employment of Marine Insurance Experts.—The Secretary, without regard to the laws and regulations on the employment of Federal employees, may appoint and prescribe the duties of experts in marine insurance as the Secretary considers necessary to carry out this chapter. (i) Services of Other Government Agencies.—With the consent of another agency of the United States Government, the Secretary may use information, services, facilities, officers, and employees of the agency in carrying out this chapter. (j) Vessel Location Reporting.—The Secretary may prescribe by regulation vessel location reporting requirements for a vessel insured under this chapter.

46 U.S.C. § 53911 Civil actions for losses

(a) In General.—If there is a disagreement about a loss insured under this chapter, a civil action in admiralty may be brought against the United States in the district court of the United States for the district in which the plaintiff or the plaintiff’s agent resides. If the plaintiff has no residence in the United States, the action may be brought in the United States District Court for the District of Columbia or in the district court for any district in which the Attorney General agrees to accept service. Any person who may have an interest in the insurance may be made a party, either initially or on the motion of either party. (b) Exclusive Remedy.—A civil action against the United States under this section is exclusive of any other action by reason of the same subject matter against an officer, employee, or agent employed or retained by the Government under this chapter. (c) Procedure.—A civil action under this section shall be heard and determined under chapter 309 of this title. (d) Tolling of Limitations Period.—If a claim is filed with the Secretary of Transportation, the running of the limitations period for bringing a civil action is suspended until the Secretary denies the claim, and for 60 days thereafter. The Secretary is deemed to have denied the claim if the Secretary does not act on the claim within 6 months after the claim is filed, unless the Secretary for good cause shown agrees with the claimant on a different period for the Secretary to act on the claim. (e) Interpleader.—If the Secretary acknowledges the indebtedness of the Government under the insurance and there is a dispute about the persons entitled to receive payment, the Government may bring a civil action interpleading those persons. The action shall be brought in the United States District Court for the District of Columbia or in the district court for the district in which any of those persons resides. A person not residing or found in the district may be made a party by service in any reasonable manner the court directs. If the court is satisfied that unknown persons might make a claim under the insurance, the court may direct service on those unknown persons by publication in the Federal Register. Judgment after service by publication in the Federal Register discharges the Government from further liability to all persons.

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