|
FMC to change OTI bond regulations
The U.S. Federal Maritime Commission (FMC) is proposing to amend regulations on the required proof of financial responsibility filing for ocean freight forwarders and NVOCCs.
Ocean transport intermediaries (OTIs) would have to file proof of financial responsibility within 120 days instead of having up to two years after an applicant’s license is approved.
The FMC said the two-year period created two areas of concern:
- Approved applicants may see the two years as an opportunity to provide OTI services without an OTI bond, thus eliminating the point of the
regulation, which is to protect shippers.
- An applicant’s inability or unwillingness to secure a bond during the two years may indicate questionable financial integrity.
According to the FMC, half of OTI license recipients in 2006 acquired their surety bond within 30 days and 87 percent obtained in 120 days.
The proposed rule would not have a significant impact on a substantial number of small businesses, according to the FMC. Comments on the proposed change are requested by Aug. 27 and can be e-mailed to
secretary@fmc.gov.
Avalon Risk Management’s underwriting standards for OTI bonds are responsive to your needs. We will coordinate with your tariff filing company to ensure your bond with the FMC is filed accurately and timely. Avalon keeps the entire process simple and takes into account the different aspects of your operation. We require the following information for OTI bond approval:
- Miscellaneous Bond Application and Indemnity
- Financial Statement (For new businesses, we accept projections and personal financials.)
- FMC Application
- NVOCC House Bill of Lading
- Proof of Legal Liability and E&O coverage
Avalon Risk Management is a premier provider of insurance and surety solutions for the logistics industry. We are a wholly-owned subsidiary of Kingsway Financial Services, publicly traded on the NYSE (ticker symbol KFS). Our surety company, Lincoln General Insurance Company is rated A- (Excellent) by A.M. Best and is licensed by the U.S. Department of Treasury for the issuance of OTI bonds.
For further information,
please contact Andriana Davis, Product Manager at Avalon’s
corporate headquarters. Andriana Davis can be reached at 847-700-8087 or at
adavis@avalonrisk.com. Please do not hesitate to contact one of our nine regional offices throughout the United States.
To view a directory of Avalon’s office locations, please
visit our Web site at
www.avalonrisk.com.
Top
View
Printable Version
|
