[Federal Register Volume 64, Number 5 (Friday, January 8, 1999)]
[Proposed Rules]
[Pages 1175-1176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-423]
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DEPARTMENT OF TRANSPORTATION
Maritime Administration
46 CFR Part 249
[MARAD-98-4395]
RIN No. 2133AB 36
Approval of Underwriters for Marine Hull Insurance
AGENCY: Maritime Administration, Department of Transportation.
ACTION: Advance notice of proposed rulemaking; termination.
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SUMMARY: On September 23, 1998, the Maritime Administration (MARAD)
published in the Federal Register an Advance Notice of Proposed
Rulemaking (ANPRM) 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 because of the merger of the Institute of London Underwriters
(ILU) and the London International Insurance and Reinsurance Market
Association (LIRMA). Under the existing regulations ILU members are
approved to write marine hull insurance provided they meet certain
trust agreement requirements. Based on the response, MARAD is
terminating the proposed rulemaking.
FOR FURTHER INFORMATION CONTACT: Edmond J. Fitzgerald, Director, Office
of Subsidy and Insurance, (202) 366-2400.
SUPPLEMENTARY INFORMATION: The new organization formed by the merger
will be called the International Underwriters Association (IUA) of
London. Because this new organization does not have the same
eligibility criteria as the ILU or any internal oversight activities,
MARAD was seeking input on the best method to review and approve member
companies in the future.
MARAD received comments on behalf of the ILU, Lykes Lines Limited,
LLC, Keystone Shipping Co., and a group of students at Florida
International University. All commenters felt that post merger ILU
companies should be subject to the existing ``Other Foreign
Underwriters'' requirements set out in MARAD's insurance regulation at
46 CFR Part 249.5(c). The commenters felt that these requirements were
sufficiently stringent to protect MARAD's interests.
Based on MARAD's own internal review and the limited response to
the ANPRM, MARAD has decided not to proceed with a formal rulemaking on
this matter. Instead, MARAD has
[[Page 1176]]
decided to have those interested postmerger ILU companies seek approval
under the existing ``Other Foreign Underwriters'' procedures in the
existing regulation.
It appears that most transitioning ILU member companies have
terminated or will terminate their ILU membership by January 1, 1999
although the ILU will continue to exist as a management company for the
ILU facility. In order to provide a smooth transition and allow for
sufficient time for interested former ILU members to apply under 46 CFR
Part 249.5(c), MARAD will continue to recognize as acceptable security
all companies who were members of the ILU on or before December 31,
1998, and meet the trust agreement requirements, until January 1, 2000.
Although MARAD recognizes that some existing insurance contracts may
run longer than one year, MARAD believes that a one year grace period
is sufficient time for an interested underwriter to obtain approval on
an individual company basis. In addition, MARAD will require that any
former ILU company wishing to underwrite marine hull insurance on MARAD
related business must seek it's own approval under 46 CFR Part 249.5(c)
regardless of the fact that its parent company, subsidiary or
affiliate, may have been previously approved under 46 CFR Part
249.5(c).
By order of the Maritime Administrator.
Dated: January 5, 1999.
Joel C. Richard,
Secretary.
[FR Doc. 99-423 Filed 1-7-99; 8:45 am]
BILLING CODE 4910-81-P