Alaska Considers Exemption To Direct Action Requirement

The direct action requirement of Alaska state law, which makes petroleum transportation carriers and their insurers liable for any spills, has been a major problem for operators since the early 1980s. Now, however, a bill has been introduced in the Alaska legislature which would permit an exemption to the direct action requirement of the evidence of financial responsibility based on certain criteria.

An exemption would be issued if: (a) the applicant provides proof of $50,000,000 for crude oil operations; or (b) provides proof of the required level of financial responsibility to cover judgments in the case of noncrude operations; (c) provides a sworn statement or affidavit that insurance or another form of financial responsibility that meets the requirements of this section is not available.

The state of Alaska has issued exemptions, up to this point, on an ad hoc basis. The new legislation, which is in committee, would provide the state with the statutory authority to issue exemptions for up to two years.

Maritime Reporter Magazine, page 72, Apr 1992

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