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Title 46 — ShippingRelease 119-73not60

§53907 Reinsurance

Title 46 › Subtitle Subtitle V— Merchant Marine › Part C— Financial Assistance Programs › Chapter 539— WAR RISK INSURANCE › § 53907

Last updated Apr 5, 2026|Official source

Summary

The Secretary of Transportation can act as a reinsurer to insurance companies licensed in any U.S. State. The Secretary can also buy reinsurance from those companies for any insurance the Secretary provides under this chapter. Reinsurance rates must follow either the Secretary’s own rates for similar risks or the insurance company’s rates for the covered policy, and the Secretary must pick whichever is better for the government. The Secretary may pay a reasonable fee to the company for services and facilities, but not for selling or promoting insurance.

Full Legal Text

Title 46, §53907

Shipping — Source: USLM XML via OLRC

(a)To the extent the Secretary of Transportation 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)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. However, the Secretary may provide an allowance to the insurance company for the costs of services and facilities the company provides, 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.

Legislative History

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 5390746 App.:1287.June 29, 1936, ch. 858, title XII, § 1207, as added Sept. 7, 1950, ch. 906, 64 Stat. 775. In subsection (a), the words “insurance under this chapter” are substituted for “marine, war risk, and liability insurance” for consistency in this chapter. The words “in whole or in part” are omitted as unnecessary. The words “obtain reinsurance from” are substituted for “reinsure with, or cede or retrocede to” for clarity and to eliminate unnecessary words.

Reference

Citations & Metadata

Citation

46 U.S.C. § 53907

Title 46 — Shipping

Last Updated

Apr 5, 2026

Release point: 119-73not60