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Congress ultimately does with this claims procedure, most likely
the Republic of Panama, after the year 2000, will follow suit. The
basis for this comment is the Panamanian Maritime Tribunal, re-
cently created in the Republic of Panama, has adopted many of the
admiralty procedures now followed in our U.S. district courts. They
look to us for guidance.
It is reasonable for us to believe that whatever Congress does
with this claims procedure, hopefully changing it-and we, of
course, urge Congress to change it-that the Republic of Panama
will adopt the same procedure after the year 2000. The procedure
you formulate will govern shipping interests, including the Ameri-
can merchant marine, into the future even after the United States
has totally divested itself of the canal.
Thank you.
Mr. HUBBARD. Mr. Brown, do you have a final comment?
Mr. BROWN. I guess, one other. That is, I mentioned the increase
of premium where losses are sustained by a shipowner. I should
have said that that increase in premium is very substantial. It can
be as high as paying back the loss over a period of 5 years.
That is, if there is $1 million loss, the underwriter will pay the
loss, but he will collect it back in premium over the next 5 years at
$200,000 a year. So it would fall very heavily on an individual ship-
owner.
Mr. HUBBARD. Thank you for that information.
We do ask Mr. McAuliffe to come back. We will hear you one
more time for 5 minutes or less.
STATEMENT OF HON. DENNIS P. McAULIFFE, ADMINISTRATOR,
PANAMA CANAL COMMISSION
Mr. McAULIFFE. Mr. Chairman, we have no substantial disagree-
ment with any of the testimony today. All witnesses have testified
concerning the confusion or uncertainty arising from the present-
ing legislation and the need for amendments with respect to the
claims procedures.
Incidentally, we have not had the opportunity to review the pro-
posed legislative changes submitted by certain witnesses and would
welcome an opportunity to comment on these and any others sub-
mitted to the subcommittee.
In addition, we stand on our own testimony concerning the need
for a statute of limitations and for authorization for catastrophe in-
surance. We do very much appreciate the opportunity to appear
before this subcommittee today and to address this very important
subject.
Thank you.
Mr. HUBBARD. Thank you very much, Mr. McAuliffe.
The hearing now stands adjourned.
[The following was received for the record:]
QUESTIONS SUBMITTED BY MR. HUBBARD AND ANSWERED BY LEONARD J. KUJAWA
On page 7 of your statement, in quoting your 1973 report, you state that the cost
of the marine accident reserve is "comparable to the insurance expense which
would be incurred if the company were permitted to obtain outside insurance cover-
age."
Question 1. Do you have an opinion on whether or not insurance coverage for
vessel damage claims is something the current Commission should consider?