The Federal Maritime Commission has approved measures designed
to strengthen customer protections and reduce financial responsibility
requirements for smaller cruise lines. The measures were announced Feb. 22 and
were approved during the commission’s most recent meeting.
Under law, cruise lines must file adequate evidence of
financial responsibility to help ensure that passengers can obtain
reimbursement in the event a cruise is not performed. The Commission’s new rule
increases the maximum coverage requirement from $15 million to $30 million per
cruise line and requires that the cap be adjusted every two years based on the
Consumer Price Index for All Urban Consumers.
The coverage requirement increase, according to the Maritime
Commission, reflects the effects of inflation and the growth of the cruise
industry since the current $15 million cap was set in 1990. The rule also
provides relief to smaller cruise lines by recognizing the existence of additional
forms of financial protection.
“I am pleased that, after more than 20 years, the Commission
has taken long overdue action to address increased performance coverage
required in light of the growth of unearned passenger revenue in the hands of
cruise operators,” FMC Chair Richard A. Lidinsky, Jr. said. “I am especially
delighted that the Commission has developed a mechanism to reduce the
regulatory burden on smaller operators while maintaining adequate protection
for passengers.”
In a separate action during the same Feb. 13 meeting, the
Commission approved for public comment a proposed rule that would require
foreign-based unlicensed Non-Vessel-Operating Common Carriers to register with
the Commission and expands a current tariff rate publication exemption that
would allow foreign-based, unlicensed NVOCCs to enter into negotiated rate arrangements
in lieu of publishing a rate for cargo shipments in its tariff.
“I also am pleased that we have moved to consider extending
to foreign unlicensed NVOCCs the regulatory relief provided more than two years
ago to licensed NVOCCs,” Lidinsky said. “As we move forward, I would hope that
the Commission will undertake further review of its regulations governing ocean
transportation intermediaries in order to make them more effective while
providing further relief from unnecessary regulations.”
