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‘‘(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 water-
borne 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 confis-
cation, expropriation, nationalization, or deprivation. 
‘‘§ 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 EMER-
GENCY.—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. 
‘‘§ 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 construc-
tion; 
‘‘(2) a foreign vessel—
‘‘(A) owned by a citizen of the United States; or 
‘‘(B) engaged in transportation in the waterborne com-
merce 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;
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‘‘(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 gen-
eral 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. 
‘‘§ 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. 
‘‘§ 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 agen-
cies 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 insur-
ance. The Secretary of Defense and agencies may make such an 
indemnity agreement.
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‘‘(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. 
‘‘§ 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 Transpor-
tation. 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 Sec-
retary, 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. 
‘‘§ 53907. Reinsurance 
‘‘(a) IN GENERAL.—To the extent the Secretary of Transpor-
tation 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. How-
ever, the Secretary may provide an allowance to the insurance
H. R. 1442—146
company for the costs of services and facilities the company pro-
vides, 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. 
‘‘§ 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. 
‘‘§ 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 liabil-
ities 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 Transpor-
tation, 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 Govern-
ment of comparable maturity. Interest and benefits from the securi-
ties shall be deposited in the fund. 
‘‘§ 53910. Administrative 
‘‘(a) ACCORDANCE WITH COMMERCIAL PRACTICE.—In carrying 
out this chapter, the Secretary of Transportation may act in accord-
ance 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 proc-
essing 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 Sec-
retary 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.