is hereby deleted and the following substituted therefor:

CLAUSE 9. Limits on amount payable for loss-(a) Actual pecuniary loss. In the event of loss, the Assured shall file a declaration (under the penalties of perjury) stating that the amount claimed does not exceed the actual bona fide pecuniary loss to the Assured, exclusive of any allowance for anticipated or accrued profit arising out of the insured venture. If claim is filed by the Assured named herein on behalf of any other person at interest, the declaration shall include a statement that the amount collectible does not exceed the amount which would have been collectible by the Assured named herein if at the time of the loss the Assured named herein had full interest in the insured goods. If this policy is issued to an agent for account of a principal named herein, both the agent and the named principal shall be required to sign the declaration.

(b) Sales price less discount. In the event of the loss of goods shipped by, to, or at the direction of the Assured and which were sold by the Assured prior to loading on board the overseas vessel (1) on ter ns requiring the Assured to provide war risk insurance to the port of discharge, or (2) with respect to which written or cabled instructions to provide war risk insurance to the port of discharge have been received by the Assured from the purchaser prior to loading of the goods on board the overseas vessel, and which were shipped for the account and at the risk of third persons other than a branch, subsidiary or affiliate of the Assured, the named Assured shall file a declaration (under the penalties of perjury), in lieu of the declaration, required by paragraph (a) of this Clause, stating that the amount claimed does not exceed the actual bona fide sales price less all discounts, plus the costs of marine insurance, transportation and expenses incidental thereto, and war risk insurance with respect to the lost goods if such items are not included in the sales price. The claim shall be filed by the named Assured unless otherwise permitted in writing by the Maritime Administrator for good cause shown.

(c) Criminal code. The declarations required to be filled pursuant to this Clause shall be subject to the United States Criminal Code which makes it a criminal offense for any person knowingly to make a false statement or representation to, or to conceal a material fact from, any department or agency of the United States as to any matter within its jurisdiction (18 U. S. C. 1001), or to file a false, fictitious of fraudulent claim against the United States (18 U. S. C. 287).

§ 308.547 Application for return premium, Form MA-317.

An application for the return of premium must be filed in duplicate with the

86-102-68-28

familiar with all matters pertaining thereto; and that the information set forth in said application is in all respects true and correct and is made to induce the Maritime Administrator to return part or all of the premiums heretofore paid by said Assured to said Maritime Administrator for Facultative Cargo War Risk Insurance. The application is made with full knowledge that the Maritime Administrator will rely on the information set forth therein.

NOTE: The United States Criminal Code makes it a criminal offense for any person knowingly to make a false statement or representation to, or to conceal a material fact from, any department or agency of the United States as to any matter within its Jurisdiction (18 U. S. C. 1001), or to file a false, fictitious or fraudulent claim against the United States (18 U. S. C. 287).

Policy hereby endorsed in accordance with foregoing and voucher cleared by Maritime Administration.

Date:

§ 308.548

Standard form of underwriting agency agreement for cargo; Form MA-318.

The following is the standard form of underwriting agency agreement applicable with respect to agreements made after June 7, 1961, which will be executed by the Maritime Administrator and domestic insurance companies authorized to do a marine insurance business in any State of the United States, appointing such companies as Underwriting Agents to issue war risk cargo policies in accordance with the provision of the agreement and this subpart: Form MA-318 (Revised 5-61)

UNITED STATES OF AMERICA
DEPARTMENT OF COMMERCE
MARITIME ADMINISTRATION

UNDERWRITING AGENCY AGREEMENT FOR CARGO
This Agreement, made and entered into
this
day of
19, by and
between the United States of America (here-
in called the "United States"), acting by the
Secretary of Commerce (herein called the
"Secretary"), represented by the Maritime
Administrator (herein called the "Adminis-
trator"), and
a corporation
organized and existing under the laws of
and duly authorized to do a
marine insurance business in a State of the

---

United States, having an office for the transaction of business at (herein called the "Underwriting Agent"). Witnesseth:

Whereas, pursuant to title XII of the Merchant Marine Act, 1936, as amended (herein called the "Act"), the Secretary is authorized under certain circumstances to provide marine insurance and reinsurance against loss or damage by the risks of war, and to employ domestic companies or groups of domestic companies authorized to do a marine insurance business in any State of the United States to act as his Underwriting Agent; and

Whereas, the Secretary has delegated authority to the Administrator to perform the functions vested in the Secretary by title XII of the Act (Section 8.01, subsection 3, of Department Order No. 117 (Revised), published in the FEDERAL REGISTER July 21, 1960, 25 F.R. 6934); and

Whereas, the Administrator has determined to employ the Underwriting Agent as an underwriting agent in providing war risk cargo insurance as set forth in section 1203 (b) of the Act upon the terms and conditions herein set forth:

Now, therefore, in consideration of the premises and of the mutual covenants and agreements, and upon the terms and conditions herein set forth, the parties hereto agree as follows:

1. Appointment of agent. The Administrator hereby authorizes the Underwriting Agent, as an agent acting on behalf of the Administrator and not as an independent contractor, to utilize its offices and facilities to make available the insurance which the Secretary is authorized to provide pursuant to Section 1203 (b) of the Act and to perform the functions hereinafter provided for, upon the terms and conditions hereinafter set forth and in accordance with the rules, regulations and instructions which will be issued from time to time to the Underwriting Agent by the Administrator directly or through any clearing agency appointed by the Administrator. The Underwriting Agent hereby agrees to utilize its offices and facilities to make such insurance available, as agent for the Administrator, and to perform the functions hereinafter provided for to the best of its ability. The Underwriting Agent may act through its home office, branch offices or agencies which are authorized to write insurance on its behalf.

2. Duties of agent. The duties of the Underwriting Agent shall be as follows:

(a) Receive applications and issue binders and policies. The Underwriting Agent shall receive applications for insurance, covering the class or classes of property and subject to the rates and conditions specified by the Administrator upon forms prescribed by the Administrator. After determining that the applications have been submitted in complete and proper form and are accompanied by remittances in the amount of the premiums required for the insurance applied

for, the Underwriting Agent shall countersign binders or policies of insurance, or both binders and policies of insurance, subject to the rules, rates, terms and conditions specified by the Administrator on forms prescribed by the Administrator. The insurer under such policies shall be the United States.

(b) Keep records. The Underwriting Agent shall keep a full and complete record of all applications, binders, and policies, and shall also record all premiums, charges, collateral deposit funds and surety bonds required by the terms of the binders and policies, so that a record may be available at all times to the Administrator, both as to all applications received and all binders and policies isued, and as to all collateral deposit funds or surety bonds provided by the assured in connection with such binders and policies.

(c) Receive money and reports. The Underwriting Agent shall accept monthly Closing Reports from each open cargo policyholder for transmission to the Administrator or to a clearing agency if one is designated by the Administrator. The Underwriting Agent shall also receive checks drawn to the order of "Maritime Adm.-Commerce" for the premiums and charges involved, which checks shall be deposited by the Underwriting Agent in the Federal Reserve Bank nearest to its office, or in such other bank as may be authorized by the Administrator to receive such deposits. The Underwriting Agent shall receive from the bank in which the deposits are made receipts therefor in such number as may be prescribed in instructions to the Underwriting Agent and handle the receipts so received in accordance with such instructions.

(d) Report monthly. The Underwriting Agent shall prepare a monthly report, in summary form, of all Closing Reports and binders and policies issued on standard forms to be approved by the Administrator and transmit them, together with supporting Closing Reports received from Open Cargo policyholders and receipts for deposits made as above provided, to the Administrator or to a clearing agency if one is designated by the Administrator.

(e) Other reports. The Underwriting Agent shall prepare and transmit such other reports as may be required by the Administrator.

(f) Process claims for return premiums. The Underwriting Agent shall receive from holders of policies issued by such Underwriting Agent any claims for return premiums on a standard form prescribed by the Administrator and shall certify thereon, if such is the fact, that the amounts with respect to which such return is claimed were previously paid and were included in closing reports submitted to the Administrator and that based upon the statements included in such application by the assured the return premium applied for is payable in accordance with the regulations of the Administrator. Such applications and certif

cations shall be transmitted promptly to the Administrator or to a clearing agency if one is designated by the Administrator.

(g) Process claims for losses. The Underwriting Agent shall receive reports of losses, prepare adjustments and vouchers, and other data, required by the Administrator, and submit the same with its recommendation as to whether claims are in order for settlement to the Administrator or to a clearing agency if one is designated by the Administrator. (h) Help establish advisory committee. The Underwriting Agent shall, if requested by the Administrator, cooperate with the Administrator and other Underwriting Agents acting in a similar capacity to establish and maintain an advisory underwriting committee to consult with and advise the Administrator in connection with specific underwriting problems, subject to the rules, regulations and instructions of the Administrator, and to establish and maintain such other advisory committees as may be deemed necessary from time to time to safeguard the interests of the Administrator including a loss committee to act as a recipient for information concerning losses and to pass upon any recommendations made by the Underwriting Agent as to losses and payments of claims arising therefrom.

The

(1) Cooperate with clearing agency. Underwriting Agent shall if requested by the Administrator cooperate with any clearing agency designated by the Administrator to act on behalf of the Administrator in coordinating and facilitating the issuance of insurance pursuant to Section 1203 (b) of the Act in accordance with terms and conditions agreed upon between the clearing agency and the Administrator and in accordance with the rules, regulations and instructions issued by the Administrator to the clearing agency.

3. Compensation. Subject to paragraph 9 of this Agreement:

(a) Fair and reasonable. The Underwriting Agent shall receive for its services such amount as the Administrator and the Underwriting Agent may, from time to time, agree to be fair and reasonable compensation. In addition to such fair and reasonable compensation, the Underwriting Agent shall receive reimbursement for out-of-pocket expenditures reasonably incurred, meaning payments to persons not regularly employed by the Underwriting Agent but excluding payments to attorneys unless such employment has been authorized by the Administrator, provided, however, that all such expenditures shall be subject to the review of the Administrator, and further provided that, except as authorized by Section 1209 (d) of the Act, such expenditures shall not include any fee or other consideration paid to an insurance broker or any person acting in a similar intermediary capacity for services by virtue of his participation in arranging any of such insurance nor include any payment on account of solicitation for or stimulation of such insurance.

(b) Paid monthly. A statement of the compensation due to the Underwriting Agent (including reimbursement for out-ofpocket expenses as herein provided) shall be submitted by the Underwriting Agent to the Administrator monthly or at such other intervals as the Administrator may direct, with an appropriate voucher, and the amount of such compensation, if approved, shall be promptly paid to the Underwriting Agent.

4. Standard of performance. In the discharge of its duties and obligations pursuant to this Agreement, the Underwriting Agent shall conform to a standard of performance and accuracy reasonably to be expected of an insurance company in the administration of its own business and consistent with the highest degree of good faith. It is agreed, however, that the Underwriting Agent shall not be responsible for errors or omissions of agents or employees in whose selection and supervision it has exercised reasonable care, provided, however, that the Underwriting Agent, in any such case, shall have conformed to the standards of performance required hereunder, and provided further, that the Underwriting Agent assumes full and complete responsibility for the disposition of any funds received by it or its agents or employees under and pursuant to this Agreement. The exercise of reasonable care in the selection of agents and employees by the Underwriting Agent shall be deemed to include a determination by the Underwriting Agent that the agents or employees so selected are experienced in the transaction of such phases of the marine insurance business as may be delegated to such agents or employees by the Underwriting Agent.

5. Writing insurance for own account. It is understood that the Underwriting Agent is or may be engaged in writing for its own account war risk insurance, as well as other types of insurance, for the benefit of holders of policies issued by it hereunder and of other parties; and it is agreed that such insurance may be written notwithstanding the activities of the Underwriting Agent hereunder on behalf of the Administrator, pursuant to this Agreement.

6. Books and records.

The

(a) Maintained subject to audit. Underwriting Agent shall keep books, records and accounts covering the operations and activities under this Agreement which shall be the property of the United States represented by the Administrator and shall be kept separate from those relating to other business of the Underwriting Agent, in accordance with regulations made from time to time by the Administrator, and shall at all times be subject to audit and inspection by the Administrator.

(b) Comptroller General may examine. The Comptroller General of the United States or any of his duly authorized representatives shall have access to and the right to examine any pertinent books, documents, papers and records of the Underwriting Agent in the

performance of and involving transactions related to this Agreement.

7. Acts only as agent. The Underwriting Agent shall act only in the capacity of agent for the Administrator as principal, in the performance of the functions provided for hereunder. The Underwriting Agent shall have no authority other than as provided in this Agreement and in the rules, regulations and instructions issued to it by the Administrator under and pursuant to this Agreement, directly or through any clearing agency appointed by the Administrator. The Underwriting Agent may accompany its signature in all policies countersigned by it hereunder with a statement that, in countersigning such policies, it acts solely under the powers conveyed to it by the Administrator and that it does not thereby warrant its authority to accept applications for insurance or its authority to countersign, nor the authority of the Administrator to issue such policies.

8. Special circumstances.

(a) Reimbursement of taxes and fees. In the event that the Underwriting Agent, after giving notice to the Administrator, shall be compelled to pay to the United States, its territories or possessions, or to any state of the United States or political subdivision thereof, or to any foreign country or political subdivision thereof, any tax (excepting incomes taxes of every nature) or fee or interest or penalty relating thereto claimed to be due by reason of the business transacted pursuant to this Agreement and which would not have been payable except for the activities of the Underwriting Agent hereunder, the Administrator shall reimburse the Underwriting Agent therefor and for any special expenses necessarily incurred in connection therewith.

(b) Indemnification. If any legal suit or proceeding (whether or not based on negligence) is brought against the Underwriting Agent on account of anything done or not done, by the Underwriting Agent, the Administrator or any clearing agency appointed by him, in connection with the issuance or non-issuance of insurance on behalf of the Administrator or the payment or non-payment of claims arising thereunder (including, without in any way limiting the foregoing, anything done or not done pursuant to any rules, regulations, or instructions of the Administrator or anything done or not done in conflict with or because of any limitation on the powers of the Administrator), the Administrator shall, upon due notice and at the expense of the United States, defend any such proceeding. If, in or as a result of any such legal suit or proceeding, the Underwriting Agent be compelled or required to make any payment or incur any expense, the Administrator shall reimburse the Underwriting Agent for the amount thereof; provided always that the Administrator shall not be obligated to make any such reimbursement unless, in connection with the action complained of, the

Underwriting Agent shall have complied with the standard of performance required hereunder. In any of the foregoing cases, the Underwriting Agent shall render to the Administrator such reasonable cooperation and assistance as the Administrator may require.

9. Effective date, amendment, termination. This Agreement shall become effective as and when the Secretary finds that war risk cargo insurance adequate for the needs of the water-borne commerce of the United States cannot be obtained on reasonable terms and conditions from companies authorized to do an insurance business in a State of the United States. The Underwriting Agent shall not be entitled to receive any compensation or to be reimbursed for any expenditures, as otherwise authorized by paragraph 3 of this Agreement, for services rendered or expenditures incurred prior to the effective date of this Agreement. This Agreement may be terminated, modified or amended at any time by mutual written consent. Once this Agreement becomes effective, it shall continue in force until terminated by mutual written consent or by either party, giving at least thirty (30) days' written notice by registered mail to the other party, stating the effective date and time on which this Agreement shall terminate. Such termination shall not affect the obligations of the parties hereto with respect to any binders or policies of insurance issued or expenditures incurred prior to the effective date of such termination.

10. No commission or contingent fee. The Underwriting Agent warrants that no person or selling agency has been employed or retained to solicit or secure this contract upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by the Underwriting Agent for the purpose of securing business. For breach or violation of this warranty the Administrator shall have the right to annul this contract without liability or in his discretion to deduct from the contract price or consideration the full amount of such commission, percentage, brokerage, or contingent fee.

11. No discrimination. In connection with the performance of work under this contract, the Underwriting Agent agrees not to discriminate against any employee or applicant for employment because of race, color, creed, or national origin; and further agrees to insert the foregoing provision in all subcontracts hereunder except subcontracts for standard commercial supplies or for raw materials.

12. No member delegate. No Member of or Delegate to Congress, or Resident Commissioner, shall be admitted to any share or part of this contract, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this contract if made with a corporation for its general benefit.

13. Renegotiation. This contract shall be subject to any act of the Congress, whether heretofore or hereafter enacted and to the extent indicated therein, providing for the renegotiation of said contract and shall be deemed to contain all of the provisions required by any such act without subsequent amendment of this contract specifically incorporating such provisions.

The contractor (which term as used in this sentence means the party contracting to perform the work or furnish the materials required by this contract) shall insert the provisions of this article in each subcontract and purchase order made or issued in carrying out the contract.

Nothing contained in this clause shall impose any renegotiation obligation with respect to this contract or any subcontract hereunder which is not imposed by an act of the Congress, heretofore or hereafter enacted. In witness whereof, the parties hereto have duly executed this Agreement in quadruplicate as of the day and year first above written.

(Assistant General Counsel, Maritime Administration)

I, --, certify that I am the duly chosen, qualified, and acting Secretary of a party to this Agreement, and, as such, I am the custodian of its official records and the minute books of its governing body; that who signed this Agreement on behalf of said corporation, was then the duly qualified of said corporation; that said officer affixed his manual signature to said Agreement in his official capacity as said officer for and on behalf of said corporation by authority and direction of its governing body duly made and taken; that said Agreement is within the scope of the corporate and lawful powers of this corporation.