10 U.S.C. § 2645: Indemnification of…

Summary

The Defense Secretary must quickly repay the Transportation Secretary for losses that are covered by the vessel war risk insurance they agreed on. If a whole vessel is lost, Defense must pay within 90 days after Transportation says the claim is payable or that policy money is due. For other claims, Defense must pay within 180 days. While a vessel-loss claim is pending, Transportation may start making required periodic payments to a lessor or mortgagee within 30 days after the claim is filed. If the claim is later found payable, those payments count toward the insurance amount. If the claim is found not payable, those payments become a debt to the United States and must be returned to the insurance fund. Defense may use its operation and maintenance money and transfer what is needed to Transportation for these payments. Money moved to Transportation goes into the Vessel War Risk Insurance Fund. If a covered loss is or may be over $10,000,000, Defense must notify Congress no later than 30 days after the loss. These payments do not need prior congressional notification, do not require combining related claims first, and add to any other money-transfer powers without dollar or notice limits. Definitions: vessel war risk insurance — the no‑premium insurance provided by Transportation under title 46 at Defense’s request; Vessel War Risk Insurance Fund — the fund in 46 U.S.C. 53909(a); loss — damage, injury, death, or other covered liabilities and expenses.

Title 10, §2645

Armed Forces, Source: USLM XML via OLRC

(a)Prompt Indemnification Required.—

(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)Source of Funds for Payment of Indemnity.—

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)Deposit of Funds.—

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)Notice to Congress.—

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)Implementing Matters.—

(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)Construction With Other Transfer Authority.—

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)Definitions.—

In this section: (1) Vessel war risk insurance.—

(2)Vessel war risk insurance fund.—

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

(3)Loss.—

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