[Federal Register: January 8, 1999 (Volume 64, Number 5)] [Proposed Rules] [Page 1175-1176] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr08ja99-32] ======================================================================= ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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