Modification of collateral requirements for War Hazards Compensation Act claims

(a) Findings Congress finds the following: (1) Under the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 901 et seq.) (in this Act referred to as the LHWCA), employers and insurance carriers are required to secure the payment of compensation to covered employees. (2) Section 104 of the WHCA (42 U.S.C. 1704) provides for the reimbursement by the United States of benefits paid under the LHWCA for injuries or deaths resulting from a war-risk hazard. (3) The Department of Labor, under section 703.204 of title 20, Code of Federal Regulations, requires insurance carriers to post collateral to secure reimbursement obligations, including for WHCA claims. (4) For WHCA claims, the United States Government bears the ultimate financial responsibility for benefit payments, subject to statutory reimbursement procedures. (5) Requiring full or substantial collateral for WHCA claims imposes unnecessary financial and administrative burdens on LHWCA insurance carriers, increases costs for government contractors, and may discourage carrier participation in markets supporting national defense. (b) In general Section 32 of the Longshore and Harbor Workers’ Compensation Act (33 U.S.C. 932) is amended by adding at the end the following: (c) Notwithstanding any other provision of this Act, the Secretary may not require an insurance carrier to post collateral, security, or other financial assurance for liabilities arising from claims reimbursable under the War Hazards Compensation Act (42 U.S.C. 1701 et seq.).. (c) Conforming regulatory amendments Not later than 180 days after the date of enactment of this Act, the Secretary of Labor shall revise section 703.204 of title 20, Code of Federal Regulations, and any related regulations to conform with the amendments made by this Act.