Sec. 18 AAC 75.271 - Proof of financial responsibility for nontank vessels

ยง 18 AAC 75.271. Proof of financial responsibility for nontank vessels

(a) This section applies to proof of financial responsibility for nontank vessels. An applicant may demonstrate financial responsibility for the applicable amount required under 18 AAC 75.235(a) (5) or (6), in full or in part, with

(1) evidence of financial responsibility meeting the requirements of 18 AAC 75.245, 18 AAC 75.250, 18 AAC 75.255, 18 AAC 75.260, or 18 AAC 75.265;

(2) proof of entry of the nontank vessel in a P&I club or proof of coverage with another insurer, including a group of insureds who have agreed to cover the pollution risks of the members of the group, if approved by the department; or

(3) insurance, a surety bond, self-insurance, a financial guaranty, or other evidence of financial responsibility used to satisfy the federal financial responsibility requirements contained in 33 C.F.R. Part 138, if the coverage includes the oil pollution risks specified in AS 46.04.040(i).

(b) The department will, in its discretion approve an insurance policy, or a P&I club or insurance syndicate contract of indemnification, as demonstrating financial responsibility under this section if

(1) the insurance policy, contract of indemnification, or P&I club rules and related documentation

(A) reflects that each entered nontank vessel is covered for the oil pollution risks specified in AS 46.04.040(i) in at least the applicable amount specified in 18 AAC 75.235(a) (5) or (6); coverage for the oil pollution risks specified in AS 46.04.040(i) may be demonstrated by using the following endorsement or substantially similar language: "Any other provision of this policy notwithstanding, this policy insures against any liability the insured may incur under AS 46.04.040(i) or any provision cited in it as a result of an unlawful discharge of oil from or by a covered vessel within or affecting land or waters within the territorial jurisdiction of the State of Alaska; however, the insurer's liability does not exceed the limits of coverage set out in Section (Article or Clause) of this policy, subject to any deductible as specifically set out in Section (Article or Clause) of this policy (binder, certificate)"; and

(B) names the applicant as an assured or member; and

(2) for a contract of indemnification from a P&I club or insurance syndicate, the P&I club or insurance syndicate has the financial solvency and a favorable history of claim handling to meet the obligations contained in the contract of indemnification.

(c) The insurance policy or contract of indemnification submitted as evidence of financial responsibility for a nontank vessel under this section

(1) need not include the endorsement required by 18 AAC 75.250(b); and

(2) must include

(A) all addenda that pertain to pollution coverage and deductibles; and

(B) for a contract of indemnification by a P&I club, a copy of the applicable P&I club rules and the vessel's certificate of entry into the P&I club.

(d) If an applicant submits a policy of insurance, binder, certificate, or evidence of P&I club coverage containing a deductible or similar provision exceeding $50,000,

(1) the applicant must demonstrate supplemental coverage for the amount of the deductible by means of other acceptable insurance, a surety, a guaranty, self-insurance, a letter of credit, or other proof of financial responsibility approved by the department; or

(2) the deductible provision must provide for a loss reimbursement plan that contains language guaranteeing that the insurer will be responsible for the payment of all claims on a first dollar basis, without waiting for the insured to pay the deductible.

(e) In addition to meeting the renewal requirements of 18 AAC 75.225, and no later than 60 days following renewal of the P&I club coverage, a holder of a certificate of proof of financial responsibility who uses P&I club membership as the method of financial responsibility shall submit to the department a renewal confirmation letter from the P&I club showing that the certificate holder's membership in the P&I club has been renewed. The certificate holder shall also submit additional documentation acceptable to the department showing renewal of the certificant's membership in the P&I club, no later than 90 days after renewal of the P&I club coverage. Acceptable documentation includes a copy of the addendum or renewal certificate of entry, both of which contain the information required by this subsection, and any additional terms or conditions that may affect coverage, including renewal and new expiration dates.

(f) If requested by the department, a holder of a certificate of proof of financial responsibility who uses P&I club membership as the method of financial responsibility shall submit documentation executed by the certificate holder's P&I club confirming that the certificate holder's coverage used to demonstrate financial responsibility remains current.

(Eff. 10/28/2000, Register 156; am 11/27/2002, Register 164)

Authority:AS 46.03.020

AS 46.04.040

AS 46.04.045

AS 46.04.055

AS 46.04.070

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