§2645 — Title 10 Armed Forces | U.S. Code

Summary

The Secretary of Defense must repay the Secretary of Transportation for losses that are covered by vessel war risk insurance, following the repayment deal the two Secretaries have. If the claim is for a lost vessel, repayment must happen within 90 days after the Transportation Secretary says the claim is payable or money is due. For other claims, repayment must happen within 180 days after the Transportation Secretary says the claim is payable. While a vessel-loss claim is pending, the Transportation Secretary may make required regular payments to a lessor or mortgage holder, starting no later than 30 days after the claim is filed. If the Transportation Secretary later finds the claim is payable, those interim payments count against the insurance payment. If the claim is not payable, any interim payments become a debt to the United States and must be returned to the insurance fund or account used. The Defense Secretary may use Department of Defense operation and maintenance money to make these payments and may transfer needed sums to the Transportation Secretary. Money moved to the Transportation Secretary goes into the Vessel War Risk Insurance Fund. If a covered loss is or may be over $10,000,000, the Defense Secretary must tell Congress as soon as possible and no later than 30 days after the loss. These payments don’t require prior congressional notice under 10 U.S.C. 2214 or 2215, and claims don’t have to be combined before paying. The fund-transfer power here is extra to any other transfer authority and is not limited by dollar caps or notification rules in other laws. Definitions: "vessel war risk insurance" — insurance the Transportation Secretary provides without premium at Defense’s request under chapter 539 of title 46 and covered by an agreement between the two Secretaries; "Vessel War Risk Insurance Fund" — the fund described in 46 U.S.C. 53909(a); "loss" — damage or destruction of property, personal injury or death, and related liabilities and expenses.

Title 10, §2645

Armed Forces — Source: USLM XML via OLRC

(a)(1)In the event of a loss that is covered by vessel war risk insurance, the Secretary of Defense shall promptly indemnify the Secretary of Transportation for the amount of the loss consistent with the indemnification agreement between the two Secretaries that underlies such insurance. The Secretary of Defense shall make such indemnification—

(A)in the case of a claim for the loss of a vessel, not later than 90 days after the date on which the Secretary of Transportation determines the claim to be payable or that amounts are due under the policy that provided the vessel war risk insurance; and

(B)in the case of any other claim, not later than 180 days after the date on which the Secretary of Transportation determines the claim to be payable.

(2)When there is a loss of a vessel that is (or may be) covered by vessel war risk insurance, the Secretary of Transportation may make, during the period when a claim for such loss is pending with the Secretary of Transportation, any required periodic payments owed by the insured party to a lessor or mortgagee of such vessel. Such payments shall commence not later than 30 days following the date of the presentment of the claim for the loss of the vessel to the Secretary of Transportation. If the Secretary of Transportation determines that the claim is payable, any amount paid under this paragraph arising from such claim shall be credited against the amount payable under the vessel war risk insurance. If the Secretary of Transportation determines that the claim is not payable, any amount paid under this paragraph arising from such claim shall constitute a debt to the United States, payable to the insurance fund. Any such amounts so returned to the United States shall be promptly credited to the fund or account from which the payments were made under this paragraph.

(b)The Secretary of Defense may pay an indemnity described in subsection (a) from any funds available to the Department of Defense for operation and maintenance, and such sums as may be necessary for payment of such indemnity are hereby authorized to be transferred to the Secretary of Transportation for such purpose.

(c)Any amount transferred to the Secretary of Transportation under this section shall be deposited in, and merged with amounts in, the Vessel War Risk Insurance Fund as provided in section 53909(b) of title 46.

(d)In the event of a loss that is covered by vessel war risk insurance in the case of an incident in which the covered loss is (or is expected to be) in an amount in excess of $10,000,000, the Secretary of Defense shall submit to Congress notification of the loss as soon after the occurrence of the loss as possible and in no event more than 30 days after the date of the loss.

(e)(1)Payment of indemnification under this section is not subject to section 2214 or 2215 of this title or any other provision of law requiring notification to Congress before funds may be transferred.

(2)Consolidation of claims arising from the same incident is not required before indemnification of the Secretary of Transportation for payment of a claim may be made under this section.

(f)Authority to transfer funds under this section is in addition to any other authority provided by law to transfer funds (whether enacted before, on, or after the date of the enactment of this section) and is not subject to any dollar limitation or notification requirement contained in any other such authority to transfer funds.

[(g)Repealed. Pub. L. 108–136, div. A, title X, § 1031(a)(26)(B), Nov. 24, 2003, 117 Stat. 1598.]

(h)In this section:

(1)The term “vessel war risk insurance” means insurance and reinsurance provided through policies issued by the Secretary of Transportation under chapter 539 of title 46 that is provided by that Secretary without premium at the request of the Secretary of Defense and is covered by an indemnity agreement between the Secretary of Transportation and the Secretary of Defense.

(2)The term “Vessel War Risk Insurance Fund” means the insurance fund referred to in section 53909(a) of title 46.

(3)The term “loss” includes damage to or destruction of property, personal injury or death, and other liabilities and expenses covered by the vessel war risk insurance.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The date of the enactment of this section, referred to in subsec. (f), is the date of enactment of Pub. L. 104–201, which was approved Sept. 23, 1996.

Amendments

2011—Subsec. (d). Pub. L. 112–81 substituted “$10,000,000” for “$1,000,000”. 2006—Subsec. (c). Pub. L. 109–304, § 17(a)(4)(A), substituted “section 53909(b) of title 46” for “the second sentence of section 1208(a) of the Merchant Marine Act, 1936 (46 U.S.C. App. 1288(a))”. Subsec. (h)(1). Pub. L. 109–304, § 17(a)(4)(B), substituted “chapter 539 of title 46” for “title XII of the Merchant Marine Act, 1936 (46 U.S.C. App. 1281 et seq.),”. Subsec. (h)(2). Pub. L. 109–304, § 17(a)(4)(C), substituted “section 53909(a) of title 46” for “the first sentence of section 1208(a) of the Merchant Marine Act, 1936 (46 U.S.C. App. 1288(a))”. 2003—Subsec. (d). Pub. L. 108–136, § 1031(a)(26)(A), substituted “Congress” for “Congress—”, struck out par. (1) designation before “notification”, substituted a period for “; and” after “date of the loss”, and struck out par. (2) which read as follows: “semiannual reports thereafter updating the information submitted under paragraph (1) and showing with respect to losses arising from such incident the total amount expended to cover such losses, the source of such funds, pending litigation, and estimated total cost to the Government.” Subsec. (g). Pub. L. 108–136, § 1031(a)(26)(B), struck out heading and text of subsec. (g). Text read as follows: “Not later than March 1 of each year, the Secretary of Defense shall submit to Congress a report setting forth the current amount of the contingent outstanding liability of the United States under the vessel war risk insurance program under title XII of the Merchant Marine Act, 1936 (46 U.S.C. App. 1281 et seq.).” 1997—Subsec. (a)(1)(B). Pub. L. 105–85 struck out “on which” after “after the date on which”.

§2645 Indemnification of Department of Transportation for losses covered by vessel war risk insurance