U.S. Maritime Security Poised To Improve With New Regulations

"The law was very general in what it told us to do in implementing new regulations. So it is our regulations that will provide details on what the industry must do," he said. "These security regulations will provide extra precautions and measures that currently are not in place that would better serve the insurance industry."

Among the new rules that would benefit the insurance industry, one involves a requirement that all ships and all ports have security vulnerability assessments. These assessments would examine, for instance, potential threats and weaknesses and help identify which vessels and facilities pose a high risk of getting involved in a security incident.

"All ships and all port facilities will then be required to have security plans, and those will need to be approved by the U.S. Coast Guard. And all ships and port facilities will be required to have a ship security officer or a port facility security officer," he told National Underwriter.

These measures, he said, will significantly heighten not only the security, but also the awareness of the security, and that will deter the loss of cargo and goods and terrorist activities, as well as losses from mere theft.

Mr. Angelo also explained that these rules would work hand in hand with the international maritime security measures that were adopted at the International Maritime Security Conference in December.

"In my opinion, the Maritime Transportation Security Act, in combination with the international measures that were adopted last year, will provide a comprehensive worldwide regime for improving maritime security," he said.

There are a number of other regulations that would also boost maritime security from the insurers' standpoint, but they won't be very noticeable at first, he added. "There will be things like automatic identification systems and alert systems–that is, by having such equipment on the ship, local authorities in the area will be able to locate it sooner, " he said.

The Coast Guard, he added, may require long-range tracking systems on all ships in U.S. waters that are equipped with global maritime distress and safety systems.

"If the ship has been taken over by terrorists, we will then be able to know sooner if it is not going where it is supposed to," Mr. Angelo said.

And if something happens on the ship, the master can hit a secret button on the ship's alert system and the signal would come out right away to the shore. "Right away, they would know something has happened on the ship and the shore side can then take appropriate measures."

The U.S. Coast Guard will also issue "control-and-compliance" measures, Mr. Angelo said. "These measures will allow security officers to take guarded actions. So that if a ship is questionable, they can board that ship out at sea and they can then make sure it is secure to come into the port. And if not, they can take appropriate measures to protect our ports and port facilities that, I assume, insureds are insuring."

Currently, the U.S. Coast Guard is in the process of fine-tuning its soon-to-be-released regulations. "We hope to have them issued this June, said Mr. Angelo, adding that certain measures will go into effect right away, while some would allow a grace period.

"For example, when regulations come into effect in June, it's going to require ships to have ship security plans. But they wouldn't have the plan immediately–they have to go develop the plan. They have up to one year to have it approved by us," he said. "A vessel or facility may not operate without an approved plan 12 months after the rule is issued."

But other operational type of measures in regulations will need to be implemented immediately, he said.

Reproduced from National Underwriter Edition, May 5, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.