Provision of Marine War Risk Insurance Coverage

This memorandum approves the provision of U.S. government-backed marine war risk insurance for vessels operating in the Black Sea for 90 days when private insurance is unavailable on reasonable terms. It delegates authority to the Secretary of Transportation, requires consultation with the Secretary of State and OMB for large exposures, and mandates immediate notification to U.S.-flag vessel operators and Federal Register publication.

Federal Register Open PDF 73 FR 72685

Impact dates

Feb 23, 2009
Approval to provide insurance expires (90 days from signing)
Nov 25, 2008
Secretary of Transportation to notify U.S.-flag vessel operators immediately

Key directives

Approve provision of war risk insurance/reinsurance for vessels, cargo, and crew in Black Sea trade
Require consultation with Secretary of State before determining private insurance inadequate
Require OMB consultation for policies exceeding War Risk Revolving Fund amounts
Delegate authority under 46 U.S.C. 53902 and 53905 to Secretary of Transportation
Notify all U.S.-flag vessel operators immediately
Arrange Federal Register publication

Who is ordered

Timeline

Immediate

Approval takes effect for 90-day period
Secretary of Transportation to notify U.S.-flag vessel operators immediately
Federal Register publication to be arranged

Near term (90d)

Insurance coverage available for Black Sea trade through February 23, 2009
Existing policies remain in force per their terms beyond 90-day period if applicable

Long term

—

Risks & tensions

Black Sea region geopolitical instability (2008 Georgia-Russia conflict context)
Potential exposure of War Risk Revolving Fund to large claims
Coordination requirement between Transportation, State, and OMB may create delays
Temporary 90-day nature suggests emergency or stopgap measure rather than permanent policy