U.S. Extends Marine War Risk Insurance
Thursday, February 13, 2003
Secretary of Transportation Norman Y. Mineta has approved an extension of the authority to provide war risk insurance under Section 1202 of the 1936 Merchant Marine Act (Act). Unlike Section 1205 insurance, which is provided to the Department of Defense (DOD) on vessels chartered to them at no premium and with a full DOD indemnity, Section 1202 insurance is underwritten by DOT in return for a premium from shipowners. This insurance or reinsurance of vessels is available for vessels (including cargoes and crew) entering the Middle East region, whenever commercial insurance cannot be obtained on reasonable terms and conditions.
It should be noted that Section 1202 authority was used very judiciously and sparingly during Operations Desert Shield/Desert Storm and it is contemplated that this new authority will be used in the same manner.
President George W. Bush approved the provision of war risk insurance by memorandum in December 2001; the Secretary of Transportation has approved the extension for an additional one-year period until December 12, 2003.
FOR FURTHER INFORMATION CONTACT: Joe Strassburg, Chief, Division of Marine Insurance, Maritime Administration, 400 Seventh Street SW, Washington, DC. Phone (202) 366-2400.