Establishment of National Minimum Insurance Standard for National Marine Fisheries Service Programs That Permit or Approve Observer Providers, 54902-54910 [2022-19146]

Agencies

• DEPARTMENT OF COMMERCE
• National Oceanic and Atmospheric Administration

[Federal Register Volume 87, Number 173 (Thursday, September 8, 2022)]
[Rules and Regulations]
[Pages 54902-54910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19146]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration

50 CFR Parts 600, 648, 660, and 679

[Docket No. 220805-0170]
RIN 0648-BJ33


Establishment of National Minimum Insurance Standard for National 
Marine Fisheries Service Programs That Permit or Approve Observer 
Providers

AGENCY: National Marine Fisheries Service (NMFS), National Oceanic and 
Atmospheric Administration (NOAA), Commerce.

ACTION: Final rule.

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SUMMARY: NMFS issues this final rule to establish a uniform, nationally 
consistent minimum insurance standard that would apply in regional 
regulatory programs that authorize an observer provider to deploy a 
person in any mandatory or voluntary observer program and that specify 
responsibilities of authorized providers. NMFS has concluded that this 
action is

[[Page 54903]]

necessary to clarify the types of insurance that are appropriate to 
address the financial risks that observer coverage presents in any 
federally managed fishery that is subject to observer coverage. This 
rule also revises regional observer program regulations to reference 
the national minimum insurance standard. The rule does not modify 
existing regional observer program regulatory procedures that specify 
how an observer provider demonstrates compliance with insurance 
requirements.

DATES: 
    Effective date: This final rule is effective September 8, 2022.
    Compliance date: Compliance is not required until or during the 
next insurance certification or February 6, 2023, whichever date is 
later, after which time NMFS may request observer providers that are 
approved to deploy observers to provide a certificate of insurance that 
demonstrates compliance with this final rule.

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
should be directed to Dennis Hansford, 301-427-8136 or 
[email protected].

SUPPLEMENTARY INFORMATION: The insurance standard established in this 
final rule provides a nationally consistent suite of insurance 
coverages that an observer provider seeking authorization, or that has 
been authorized, must have to mitigate the financial risks associated 
with providing observer services; specifically observer deployments to 
fishing vessels or shoreside locations such as processing facilities, 
and those that arise with training personnel for these deployments. 
Through compliance with this minimum standard, observer providers would 
be properly insured, thereby mitigating the financial risks that 
fishing vessels, first receivers, and shoreside processors have when 
complying with observer coverage requirements.

Background

    The Magnuson-Stevens Fishery Conservation and Management Act (MSA), 
16 U.S.C. 1801 et seq., establishes a national program for conservation 
and management of fishery resources within the United States Exclusive 
Economic Zone (EEZ). See id. 1801(a)(6), 1811(a). NMFS, acting under 
authority delegated from the Secretary of Commerce, is responsible for 
managing fisheries under the MSA, in conjunction with eight regional 
fishery management councils (Councils) established under the Act. See 
id. 1852(a). Each Council has authority to develop fishery management 
plans (FMPs) for fisheries in a specific geographical area and to deem 
proposed regulations that are necessary for plan implementation. See 
id. 1852(a), (c).
    Collection of information on fishing and fish processing, such as 
type and quantity of fishing gear used, catch in numbers of fish or 
weight thereof, fishing locations, and biological information, are 
critical to effective fishery management. See id. 1853(a)(5). To obtain 
this information, the MSA authorizes, among other things, that an FMP 
may ``[r]equire that one or more observers be carried on board a vessel 
of the United States engaged in fishing for species that are subject to 
the plan, for the purpose of collecting data necessary for the 
conservation and management of the fishery . . .''. See id. 1853(b)(8). 
The MSA defines the term ``observer'' as ``any person required or 
authorized to be carried on a vessel for conservation and management 
purposes by regulations or permits under this Act.'' See id. 1802(31). 
This definition would thus cover persons referred to in FMPs and 
regulations as ``observers'' as well as ``catch-monitors'' or ``at-sea 
monitors.'' In this final rule, the term ``observer'' refers to a 
person who is deployed as an observer, a catch or at-sea monitor on a 
fishing vessel or mothership, or as an observer deployed to a shoreside 
first receiver location or processing facility. Also, in the preamble 
of this final rule, NMFS refers to a company that provides observer or 
catch monitor or at-sea monitor services as an ``observer provider.''
    At present, all at-sea and shoreside observer deployments for NMFS 
observer programs are staffed by observer providers. These companies 
provide observer staffing support under two distinct models: (1) direct 
service, where the NMFS observer program contracts with an observer 
provider and oversees the provider's services based on the terms of the 
contract; and (2) industry-funded service, where the observer provider 
provides services directly to a vessel or a fleet of vessels, and a 
NMFS regional observer program oversees the provision of those services 
based on requirements set forth in NMFS regulations.
    In the North Pacific and most West Coast programs, an observer 
provider must be permitted under the programs' regulations and satisfy 
other responsibilities specified in regulations in order to provide 
services in either the direct contract model or industry-funded model. 
The North Pacific and West Coast programs have regulatory-based 
insurance requirements for observer providers that are permitted to 
deploy observers. Permitted observer providers must demonstrate 
compliance with these requirements on an annual basis by providing the 
relevant program copies of certificates of insurance that name the 
applicable program as the certificate holder and that verify that the 
company has the insurance specified in the applicable regulation.
    In the Northeast/Mid-Atlantic region an observer provider must be 
approved to provide services in the at-sea sampler/observer coverage 
program or at-sea monitoring services in the Northeast Multispecies 
sector program. The Northeast at-sea sampler/observer coverage program 
insurance requirements are included as elements of an approved program 
provider application. In other words, an observer provider must 
demonstrate evidence that it holds the insurance specified in the 
regulation as part of its application to become an approved provider. 
Likewise, as part of an application to be an approved services provider 
in the Northeast Multispecies sector at-sea monitoring program, a 
company must demonstrate that it holds insurance that NMFS deems 
adequate.
    The Southeast, Southwest, and Pacific Islands programs use only the 
direct contract model, and do not have regulations to authorize a 
company to deploy observers in their programs through an approval or 
permit process. Nor do these programs have regulations that specify 
observer provider responsibilities. Further information about NMFS' 
regional observer programs is available at https://www.fisheries.noaa.gov/topic/fishery-observers.
    In 2014, NMFS initiated an evaluation of observer provider 
insurance requirements in North Pacific observer program regulations. 
This effort was prompted by a letter from Alaskan Observers Inc. (AOI) 
to the North Pacific Fishery Management Council (NPFMC) which asserted 
that some North Pacific insurance requirements are excessive or 
inapplicable to observer provider operations. AOI also asserted that 
there are inconsistent insurance requirements among regional observer 
programs. In a 2015 letter to the NPFMC Executive Director, NMFS agreed 
with AOI's views that certain insurance requirements are necessary and 
noted that NPFMC could consider revising those North Pacific observer 
program regulations to specify different types of insurance. NMFS then 
initiated a broader, national evaluation of observer provider insurance 
regulation to address concerns with the North Pacific Observer program 
requirements that are

[[Page 54904]]

reflected in other program regulations and to address the lack of 
consistency between regional requirements. Through this evaluation, 
NMFS obtained extensive input from observer providers, insurance 
experts, and other interested parties, on the different types of 
insurance and associated coverage amounts that are needed to address 
the financial risks that observer deployments present in any federally 
managed fishery that is subject to observer coverage. Based on this 
effort, and internal research and analysis, NMFS published a proposed 
rule to establish a uniform, nationally consistent minimum insurance 
standard that would apply in regional regulatory programs that 
authorize an observer provider to deploy a person in any mandatory or 
voluntary observer program and that specify responsibilities of 
authorized providers (86 FR 66259; November 22, 2021). NMFS concluded 
that establishment of a minimum insurance standard for observer 
providers is necessary to clarify the types of insurance that are 
appropriate to mitigation the financial risks associated with provided 
observers services; specifically observer deployments to fishing 
vessels or shoreside locations such as processing facilitates, and 
those that arise with training personnel for these deployments. Further 
background on NMFS' development of, and rationale for specific elements 
of the national minimum insurance standard is available in the proposed 
rule.

Responses to Public Comments

    NMFS received comments on the proposed rule in three letters 
received from the Purse Seine Vessel Owners' Association (PSVOA), 
Gallagher Insurance (Gallagher), and LIG Marine Managers. Summaries of 
the comments and agency responses are provided below.
    Comment 1. Gallagher commented on NMFS' citation to a 2017 Bureau 
of Labor Statistics, Census of Fatal Occupational Injuries report that 
ranked commercial fishing as one of the most dangerous occupations and 
NMFS' suggestion that, because observers are usually deployed to 
commercial fishing vessels, observers' risk of occupational injury is 
equal to that of commercial fishermen. Gallagher noted that an 
occupation with a high Fatal Occupational Injuries ranking does 
necessarily mean that it has a high level of Occupation Injury overall. 
Certain characteristics of commercial fishing--a relatively low number 
of employees compared to other food processing industries and a unique 
at-sea work environment--lead it to having a higher level of per-
employee fatalities, but not necessarily a higher level of overall 
occupational injuries compared to other industries. Lastly, for 
observers, several factors mitigate the risk of occupational injury 
that is otherwise faced by commercial fishermen, including: work 
stations designated for observers; different proximity to mechanical 
equipment, and deployment to processing vessels or motherships or 
shoreside facilities which have less or no risk of sinking.
    Response. NMFS agrees that a high Fatal Occupational Injuries 
ranking does not necessarily mean a high level of Occupation Injury 
overall for commercial fishing. NMFS also agrees that the risk of 
observer occupational injury may not always be equivalent to such risks 
for commercial fishermen. However, NMFS maintains its view that 
occupational injury risks faced by commercial fishermen are relevant to 
assessing, as a general matter, the risks for observers and the minimum 
level of insurance observer providers should have to insure against 
those risks.
    Comment 2. In response to NMFS' specific request for comments on 
the issue, PSVOA expressed strong support for enhancing the proposed 
Marine General Liability (MGL) policy requirement with an endorsement 
that extends protection to vessel or shoreside processor owners from 
legal actions filed by an observer. Such an endorsement should be 
added, because vessel owners face significant exposure to liability 
from incidents that arise involving compliance with federal observer 
coverage requirements. The endorsement should name a vessel owner as a 
party that will be indemnified against a lawsuit or other legal action 
that seeks redress of an observer injury or death.
    Response. NMFS recognizes PSVOA's concern that vessel owners have 
some risk of legal actions filed against them by observers, whether 
specifically or as part of an action brought against the employer. 
However, NMFS has decided not to add an endorsement to the MGL policy 
requirement in the rule. The proposed rule noted that the incidence or 
risk of observer-initiated legal actions against parties other than 
their employer are likely to be low, and NMFS did not receive public 
comments that would affect that conclusion. Such risks should be 
addressed through the Marine Employer's Liability (MEL) policy element 
of the minimum insurance standard. In addition, the minimum insurance 
standard is intended to protect vessel and shoreside processor owners 
against employer-based claims. Based on available information about 
risks and costs, NMFS believes that requiring observer providers to 
have an enhanced MGL policy that protects vessel and shoreside 
processor owners against any legal action brought by an observer, not 
just those that are employer-based, is too broad and overly burdensome. 
For that same reason, NMFS also declines PSVOA's request that the 
minimum insurance standard be modified to require that the MGL have an 
endorsement that names a vessel or shoreside processor as a party that 
that will be indemnified against a lawsuit or other legal action that 
seeks redress of an observer injury or death.
    Comment 3. Gallagher and LIG Marine Managers commented that the 
preamble of the proposed rule incorrectly suggested that there is a 
distinction between a MEL policy and a policy for maritime liability to 
cover claims under the Jones Act and General Maritime Law (GML). There 
is no difference between the two policies because MEL is a policy for 
maritime liability that covers claims under the Jones Act and GML.
    Response. NMFS agrees that an MEL policy covers claims under the 
Jones Act and GML. In the preamble to the proposed rule, NMFS used the 
same terminology reflected in existing regional observer program 
regulations. North Pacific and West Coast program regulations require 
coverage for maritime liability to cover Jones Act and GML claims while 
the Northeast program regulations require the same coverage but 
describe it as an MEL policy. This rule includes an MEL policy and, as 
NMFS explained in the proposed rule, the purpose of that policy is to 
provide coverage for Jones Act and GML claims.
    Comment 4. Gallagher commented extensively on the applicability of 
the U.S. Longshore and Harborworkers Compensation Act (LHWCA), the 
Jones Act, and GML to observers and expressed support for requiring 
observer providers to have insurance for observer claims for benefits 
under these authorities. Gallagher asserted that if LHWCA applies to 
observers on land, it must also be applicable to observers while 
deployed on a vessel in US navigable waterways. Gallagher referenced 
analysis by insurance expert Vincent Gullette, of American Equity 
Underwriters, that is documented in NMFS' Fisheries Observers 
Insurance, Liability and Labor Workshop Technical Memorandum, dated 
June 12-14, 2001, available at Observer Insurance Tech Memo.
    According to Mr. Gullette, observers may not be covered under the 
LHWCA

[[Page 54905]]

because they do not meet the criteria for longshore status. Observers 
may be considered ``aquaculture workers'' for purposes of the LHWCA, 
and, as such, would be excluded from coverage under that authority. But 
if not considered ``aquaculture workers,'' they would be covered under 
the LHWCA whether on land or at-sea. Gallagher expressed support for 
the finding of that insurance expert and NMFS' finding that, because 
observers are not vessel crew, neither the Jones Act nor GML apply to 
them. Notwithstanding, Gallagher expressed support for inclusion of 
LHWCA coverage and MEL coverage for Jones Act and GML claims in the 
rule. While observers may not have the requisite status needed to 
recover benefits under these authorities, observers are nonetheless 
free to pursue such benefits and that could result in significant legal 
costs for observer providers.
    Response. NMFS agrees that the details of whether and how the 
LHWCA, Jones Act, and GML apply to observers are unclear in some cases. 
Regardless of these uncertainties, NMFS agrees that a minimum suite of 
insurance for observer provider operations must include coverage for 
claims under those authorities, and thus made no change to the final 
rule as a result of this comment. NMFS notes that the minimum insurance 
standard is designed to be narrowly tailored to cover the reasonable 
risks, but not every possible risk, that may arise with observer 
provider operations. As explained in the proposed rule, based on 
independent research and extensive outreach efforts to insurance 
experts, observer providers, and other government agencies, NMFS 
determined that the LHWCA applies only to shoreside incidents. While 
deployed on a vessel under the MSA or the Marine Mammal Protection Act, 
observers have status as Federal employees for purposes of compensation 
under the Federal Employee Compensation Act. See 16 U.S.C. 1881b(c). 
Accordingly, because observers can seek FECA benefits for injuries 
sustained while deployed on a vessel, NMFS concluded that, for purposes 
of the minimum insurance standard, observer providers need only obtain 
LHWCA coverage for observers when they perform duties shoreside. 
Nonetheless, the minimum insurance standard establishes a floor, not a 
ceiling, for the appropriate insurance policy types and levels of 
associated insurance policy coverage amounts. Thus, this rule would not 
prevent an observer provider from having broader insurance or higher 
coverage amounts than what is required under the minimum standard.
    NMFS agrees that observers do not have the requisite status for 
Jones Act and GML claims, but also agrees that the minimum standard 
should include an MEL policy to address legal costs should observers 
pursue Jones Act or GML claims. Moreover, as NMFS explained in the 
proposed rule, an MEL policy is appropriate to cover certain GML 
benefits that do apply to incidents at-sea involving observers, 
specifically potential remedies related to claims based on 
Unseaworthiness, Wrongful Death, Transportation, Wages, Maintenance and 
Cure, and the Death on the High Seas Act.
    Comment 5. LIG Marine Managers commented as follows on LHWCA and 
State Workers' Compensation policies. LHWCA and State Workers' 
Compensation policies are always issued to provide statutory coverage, 
thus it is not necessary to specify ``at statutory limits'' in the 
rule. The requirement for State Workers' Compensation should be changed 
to apply for ``all states of operation'' because some observer programs 
involve multiple states. LHWCA and State Workers' Compensation policies 
include a sublimit for employers' liability (EL) and that sublimit 
should be increased to $1 million. LIG Marine Managers illustrated 
these comments, and those in comment 6, in Table 1 below.
    Response. NMFS agrees that LHWCA and State Workers' Compensation 
policies issued by insurance carriers provide statutory coverage. No 
change is needed in the rule, as reference to ``at statutory limits'' 
was not in the proposed regulatory text, only in the preamble. NMFS 
does not agree that the requirement for State Workers' Compensation 
should be revised to require coverage in ``all states of operation''. 
As explained in the proposed rule, the minimum insurance standard 
applies only when NMFS regulations require observer provider companies 
to obtain approval or a permit to deploy a person in any mandatory or 
voluntary observer program. The North Pacific, West Coast, and 
Northeast observer programs have such regulatory requirements, whereas 
the Southeast, Southwest and Pacific Islands programs do not, as they 
currently operate only under a direct contract model. Requiring that 
State Workers' Compensation (or other policies) cover ``all states of 
operation'' would be overly broad for the former programs, which are 
subject to approval or permitting under regulations for particular 
fisheries and not for all states where they might operate. While direct 
contract programs are not subject to this rule, as explained in the 
proposed rule, NMFS will apply the minimum insurance standard in this 
rule as a condition of direct contracts for observer provider services 
by adding that standard to the National Oceanic and Atmospheric 
Administration's Acquisitions and Grants Office Policy Manual. NMFS 
contracts with observer providers for services in specific fisheries, 
and thus, as with the regulations-based programs, believes requiring 
coverage in ``all states of operation'' would be overly broad.
    Comment 6. LIG Marine Managers commented that commercial general 
liability coverage, which generally does not apply to any vessel-based 
operations, should be a component of MGL with a minimum of $1 million. 
Policy coverage amounts for MEL, EL, and MGL can be identified at 
common market limits, e.g., $1 million for each respective policy, but 
some insurance carriers prefer to write them differently. It does not 
matter how these coverage amounts are set out in any combination of 
primary and excess layers as long the total coverage is equal to or 
greater than the total of the coverage amounts required for each 
policy. LIG Marine Managers submitted Table 1 with its comments, which 
illustrates its recommendations summarized under Comments 5 and 6.

[[Page 54906]]



                                                      Table 1--LIG Marine Managers' Recommendations
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                                                                                       Marine  employer's
                                                                                        liability (MEL)                              Excess or umbrella
    State worker's compensation         LHWCA (longshore)     Employers  liability    covering  Jones Act/     Marine  general      coverage  over MGL,
           coverage (WC)                                              (EL)           GML,  seamen's claims     liability (MGL)           EL and MEL
                                                                                            coverage
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Must meet requirements within all    Monoline or endorsed    As part of the WC       $1 million per         $1 million per         $2 million minimum.
 state(s) of operation: Statutory     to the WC policy.       coverage.               occurrence.            occurrence.
 Limit.                              Statutory Limit.......  $1 million............
--------------------------------------------------------------------------------------------------------------------------------------------------------
Any combination of primary and excess policies can be provided for the EL, MEL and MGL in order to achieve the total limits required above.

    Response. NMFS agrees that some insurance carriers may craft policy 
coverage amounts differently than the market standard. Those variations 
do not weaken coverage so long as the total coverage of each policy is 
equal to or greater than the sum of what is required for each policy. 
Accordingly, this final rule amends the regulatory text of the proposed 
rule at 50 CFR 600.748 by adding a new paragraph (d) to include 
flexibility in satisfying the coverage amounts required for MGL and MEL 
policies.
    With regard to the comment on an EL policy sublimit for LHWCA and 
State Workers' Compensation policies, NMFS believes that the standard 
limit for EL coverage is sufficient. Moreover, the purpose of this rule 
is to address the risks that observer provider operations present for 
fishing vessels and shoreside processors. An EL policy would do little 
to advance that purpose because it is intended to address the risks 
associated with lawsuits in which employees allege that their employers 
negligently created an unsafe work environment. Coverage that only 
addresses negligence claims by observers against observer providers--
which to our knowledge are rare--would not mitigate the financial risks 
that observer deployments present for fishing vessels subject to 
observer coverage. NMFS reiterates that, as with all elements of the 
minimum standard in this rule, observer providers can choose to 
increase EL coverage as they deem necessary to address their 
operational needs.

Changes From the Proposed Rule

    As described above in the Responses to Public Comments section, in 
response to public comments and after further agency consideration, in 
this final rule NMFS has added a new paragraph (d) to section 600.748 
to allow policy coverage amounts for Marine General Liability and 
Marine Employers' Liability under paragraph (b)(1) and (2) respectively 
to be higher or lower than the specified amounts so long as the total 
is equal to or greater than the combined specified amounts (i.e., so 
long as the combined coverage for these policies is $2 million). 
Paragraphs (b)(1) and (2) were revised to include cross-references to 
paragraph (d).

                                    Table 2--Final Minimum Insurance Standard
----------------------------------------------------------------------------------------------------------------
                                    State workers'
              LHWCA                  compensation       Marine general    Marine  employer's       Excess or
                                     coverage (WC)      liability (MGL)    liability  (MEL)   umbrella  coverage
----------------------------------------------------------------------------------------------------------------
Required $1 million coverage....  Must meet           Required $ 1        Required $ 1        Required $ 2
                                   requirements        million per         million per         million per
                                   within state of     occurrence.         occurrence.         occurrence.
                                   operation.
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Coverage amounts specified for MGL and MEL may be higher or lower for each respective policy so long as the
  combined coverage for these policies is $2 million.

    In addition, NMFS has clarified the preface of paragraph 600.748(c) 
by replacing the phrase ``policy coverages'' with the phrase ``scope of 
coverages,'' which is a more accurate description of that paragraph.

Classification

    NMFS issues this final rule pursuant to Magnuson-Stevens Act (MSA) 
section 305(d), which provides the Secretary of Commerce with general 
responsibility to carry out any FMP or FMP amendment, and to promulgate 
regulations as may be necessary to discharge such responsibility (16 
U.S.C. 1855(d)). The NMFS Assistant Administrator has determined that 
this final rule is consistent with the MSA and other applicable laws.

NEPA Determination

    NOAA's Policy and Procedures for Compliance with the National 
Environmental Policy Act (NEPA) and Related Authorities (NOAA 
Administrative Order (NAO) 216-6A and Companion Manual for NAO 216-6A) 
provide that all NOAA major Federal actions be reviewed with respect to 
environmental consequences on the human environment. Based on the NAO 
and Companion Manual, NMFS examined the proposed rule for its potential 
to impact the quality of the human environment and concluded that it 
would not have a significant adverse effect, individually or 
cumulatively, on the human environment and would not involve any 
extraordinary circumstances listed in the Companion Manual. NMFS has 
made the same conclusion for the final rule, and received no public 
comments related to effects on the human environment. Furthermore, NMFS 
determined that this final rule may appropriately be categorically 
excluded from the requirement to prepare either an environmental 
assessment or environmental impact statement in accordance with the 
categorical exclusion described at G7 in the Companion Manual for NAO 
216-6A, Appendix, page E-14, which applies to preparation of policy 
directives, rules, regulations, and guidelines of an administrative, 
financial, legal, technical, or procedural nature, or for which the 
environmental effects are too broad, speculative or conjectural to lend 
themselves to meaningful analysis and

[[Page 54907]]

will be subject later to the NEPA process, either collectively or on a 
case-by-case basis.

Executive Order 12866

    This final rule has been determined to be not significant for 
purposes of Executive Order 12866.
    Regional regulatory programs that authorize an observer provider to 
deploy a person in any mandatory or voluntary observer program and that 
specify responsibilities of authorized providers already include 
insurance requirements. Thus, to operate in these programs, observer 
providers already must demonstrate that they have the insurance 
specified in the applicable regulations.
    Due to the nuances of maritime law and the unique nature of 
observer deployments, regions have adopted differing insurance 
requirements that are in some cases overly burdensome and inefficient. 
This action would provide a national standard that clarifies the types 
and amounts of insurance and associated coverage amounts that best 
address the financial risks of observer provider operations regardless 
of the fishery or region in which an observer provider operates. In 
some cases, compliance with the final national insurance standard would 
require observer providers to have insurance that is different from 
what they are required to have under current regulations. While this 
final action could change the suite of insurance that observer 
providers are required to have, it does not make substantive increases 
to the insurance that is required in current regional programs.
    For these reasons, we do not expect this action to result in a 
significant increase in the premiums that observer providers currently 
pay. In fact, the action could result in lower premiums due to the 
increased efficiency of having a national standard and the fact that 
the standard does not include certain coverages that are required under 
current regulations. Additionally, section 600.748(d) of the final rule 
has modified how the coverage amounts for MGL and MEL may be met, which 
provides greater flexibility to observer providers.

Paperwork Reduction Act

    This action does not contain a change to a collection-of-
information requirement for purposes of the Paperwork Reduction Act. 
NMFS' regional observer program regulations that authorize observer 
providers or that specify authorized provider responsibilities already 
include procedures for demonstrating compliance with program insurance 
requirements, and this proposed rule would not change those procedures. 
The following existing collection of information requirements would 
continue to apply, under the following control numbers: (1) 0648-0318, 
Alaska Observer Program (applies to the North Pacific Observer 
Program); (2) 0648-0500, An Observer Program for At-Sea Processing 
Vessels in the Pacific Coast Groundfish Fishery; and (3) 0648-0546, 
Northeast Region Observer Providers Requirements. Note that, while this 
action would make clear that the existing regulations for the West 
Coast Catcher Processor Program (50 CFR 660.160) include insurance 
requirements for permitted observer providers (by adding a reference to 
the minimum insurance standard to the program's regulations), the 
collection of an insurance certificate from observer providers that are 
permitted to operate in this program is already covered under the 
existing control number 0648-0500, An Observer Program for At-Sea 
Processing Vessels in the Pacific Coast Groundfish Fishery.

Final Regulatory Flexibility Analysis

    In compliance with section 604 of the Regulatory Flexibility Act, 
NMFS prepared a final regulatory flexibility analysis (FRFA), which is 
included below.
    In the Response to Comments section above, NMFS clarified that 
insurance policies for State Workers' Compensation and LHWCA are 
routinely issued ``at statutory limits'' and, therefore, that the level 
of coverage need not be specified in this final rule as it had been in 
the preamble to the proposed rule. NMFS also revised the regulatory 
text of the proposed rule at 50 CFR 600.748 by adding a new paragraph 
(d) to provide an observer provider with flexibility in satisfying 
required policy coverage amounts for Marine General Liability (MGL) and 
Marine Employers' Liability (MEL). Specifically, new paragraph (d) 
allows coverage amounts for those policies to be higher or lower than 
the specified amounts so long as the combined total coverage is equal 
to or greater than the required amounts for each respective policy. 
Neither the clarification to the coverage amount required for State 
Workers' Compensation and LHWCA, nor the addition of new paragraph (d) 
adding flexibility for satisfying the coverage amounts for MGL and MEL, 
have any cost implications.
    No economic issues were raised by public comment, and, therefore, 
no changes to this final rule were made in response to public comments 
of an economic nature. NMFS received no comments on the initial 
regulatory flexibility analysis (IRFA), nor any comments from the 
Office of Advocacy for the Small Business Administration. NMFS does not 
have any new information to take into account for purposes of that 
analysis. For these reasons, the FRFA provided below, with the 
exception of non-substantive technical updates, reflects the initial 
regulatory flexibility analysis that NMFS prepared for the proposed 
rule.

Description of the Reasons Why Action Is Being Considered

    The policy reasons for issuing this final rule are discussed in the 
preamble above and in the proposed rule and are not repeated here.

Statement of the Objectives of, and Legal Basis for, the Proposed Rule; 
Identification of All Relevant Federal Rules Which May Duplicate, 
Overlap, or Conflict With the Final Rule

    The objective of this final rule is to promote effective operation 
of regional observer programs by ensuring that observer providers have 
a nationally consistent suite of insurance coverages that properly 
addresses the financial risks of their operations, regardless of the 
fishery observed or the region in which the provider operates. The 
legal basis for this rule is 16 U.S.C. 1855(d). No other Federal rules 
duplicate, overlap, or conflict with this proposed rule.

Number and Description of Small Entities Regulated by the Final Action

    Currently, there are six companies that provide observer services 
in a NMFS mandatory or voluntary observer program. These entities, 
which would be directly regulated by this rule include: A.I.S. Inc.; 
Alaskan Observers, Inc.; Saltwater, Inc.; TechSea International; Fathom 
Resources LLC; and East West Technical Services, LLC. Four of these 
entities operate in the North Pacific Observer Program. Three operate 
in the West Coast Observer Program, and two operate in the Northeast 
Observer Program. The specific NMFS regional observer programs in which 
these companies may be permitted or approved to deploy observers are as 
follows: the North Pacific Observer Program, 50 CFR 679.52; the West 
Coast Groundfish Observer Program, 50 CFR 660.16; the West Coast Catch 
Monitor Program, 50 CFR 660.17; the West Coast Groundfish Observer and 
Catch Monitor Provider Permits Program, 50 CFR 660.18; the West Coast 
Shoreside IFQ Program, 50 CFR 660.140; the West Coast

[[Page 54908]]

Mothership Cooperative Program, 50 CFR 660.150; the West Coast Catcher 
Processor Cooperative Program, 50 CFR 660.160; the program for 
Northeast at-sea sampler/observer coverage, 50 CFR 648.11(h); and the 
Northeast Multispecies at-sea sector monitoring program, 50 CFR 
648.87(b)(4). The information available to NMFS indicates that the 
principal activity of most of these companies is providing observers. 
All of the current observer provider companies are considered small 
entities under the RFA.
    Additionally, firms interested in obtaining approval or a permit to 
provide observer services under a NMFS regional observer program in the 
future would be regulated under this rule. Observer provider services 
are specialized services, and NMFS does not know how many other firms 
might want to become providers in the future. In any event, NMFS 
anticipates that any new providers would be considered small entities. 
For purposes of the RFA, NMFS established a small business size 
standard (NAICS 11411) for all businesses in the commercial fishing 
industry including their affiliates, whose primary industry is 
commercial fishing. (See 80 FR 81194; 50 CFR 200.2). A business 
primarily engaged in commercial fishing (NAICS code 11411) is 
classified as a small business if it is independently owned and 
operated, is not dominant in its field of operation (including its 
affiliates), and has combined annual receipts not in excess of $11 
million for all of its affiliated operations worldwide. Based on 
available information, NMFS has determined that all six of these 
companies are small entities, i.e., they are engaged in the business of 
fish harvesting (NAICS 114111), are independently owned or operated, 
are not dominant in their field of operation, and have annual gross 
receipts not in excess of $11 million.
    Even though this rule would apply to a substantial number of the 
relevant businesses, the implementation of this action would not result 
in a significant adverse economic impact on individual companies. As 
described below, this rule could result in possible changes in 
insurance costs for these companies, ranging from an increase of 
approximately $10,000 to an approximate decrease of a similar amount. 
This range includes potential benefits to the companies stemming from 
clarifying requirements and allowing them to drop certain insurance 
policies that NMFS has determined to be no longer necessary.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements of the Final Rule

    This final rule does not include new reporting, recordkeeping, or 
other compliance requirements. As noted under the Paperwork Reduction 
Act header above, NMFS' regional observer program regulations that 
authorize observer providers or that specify authorized provider 
responsibilities, already include procedures for demonstrating 
compliance with program insurance requirements, and this proposed rule 
would not change those procedures.

Description of Any Significant Alternatives to the Final Rule That 
Accomplish the Stated Objectives of Applicable Statutes and That 
Minimize Any Significant Economic Impact of the Final Rule on Small 
Entities

    As required by 5 U.S.C. 604(a), NMFS' analysis considered whether 
there are any significant alternatives to the proposed rule that would 
accomplish its stated objectives while minimizing any significant 
economic impact on small entities. To identify alternatives, NMFS took 
several information gathering actions. In 2016, NMFS held an Observer 
Provider Insurance Workshop (2016 Workshop), which was attended by 
marine insurance experts, observer providers, observer representatives, 
and officials from relevant federal and state agencies. Additionally, 
in 2018, NMFS issued a Request for Information (2018 RFI) in which it 
asked for input on an appropriate suite of insurance and associated 
coverage amounts for observer providers (83 FR 32829, July 16, 2018). 
Through this engagement, NMFS identified no alternatives to the 
proposed rule that would reasonably address the unique risks that 
observer coverage presents for observer providers, observers, and the 
industry that is subject to observer coverage requirements. After 
considering public comment on the proposed rule, NMFS determined that 
there were no significant alternatives to the final rule. Therefore, in 
the proposed rule and this final rule, NMFS analyzed only whether this 
action would have a significant economic impact on observer providers, 
all of which are small entities.
    Whether this final rule would have a significant economic impact 
depends upon whether carrying the required policies under the minimum 
national standard would result in increased premiums compared to the 
premiums that observer providers currently pay to comply with existing 
regional requirements. However, for both the proposed and final rules, 
NMFS lacked the precise baseline information on existing premium costs 
that is necessary to determine, with any specificity, the economic 
impact that may result from the rule. During development of the 
proposed rule, NMFS attempted to obtain baseline information on current 
observer provider insurance premium costs through outreach to the six 
companies that provide observer services in a NMFS mandatory or 
voluntary observer program. However, these companies viewed insurance 
cost information as proprietary, and, therefore, declined to provide 
details of their insurance costs or estimates of what premium costs 
would be to comply with the proposed national minimum standard. 
Nonetheless, based on the limited information that these companies did 
provide, NMFS estimated that current observer provider insurance 
premiums cost less than $5,000 per employee. It is possible that this 
action could result in a decrease of premiums from the estimated $5,000 
per employee baseline, due to cost savings from lower premiums, from 
the consolidation of policies, or from the cancellation of policies 
that are no longer necessary. It is also possible for a premium 
increase to an outer bound of $10,000 per employee if a company 
previously had no policy coverage at all. Using these general 
assumptions, NMFS developed ranges in observer provider premium changes 
that could result from the proposed rule, if finalized and implemented 
(see table 3 below).
    To form an accurate assessment of the economic impact that may 
result from the rule, in the proposed rule, NMFS specifically requested 
public comment on whether the magnitude of the ranges described below 
accurately captures the likely premium changes that may result from the 
rule and which of these ranges is most likely to apply upon 
implementation of this final rule.

     Table 3--Estimated Ranges of Observer Provider Premium Changes
------------------------------------------------------------------------
     Insurance premium increases          Insurance premium decreases
------------------------------------------------------------------------
$0 to $2,500 per employee             $0 to $2,500 per employee.
$2,500 to $5,000 per employee         $2,500 to $5,000 per employee.
$5,000 to $7,500 per employee         $5,000 to $7,500 per employee.
$7,500 to $10,000 per employee        $7,500 to $10,000 per employee.
------------------------------------------------------------------------

    NMFS received no comments on the premium ranges in the table, the 
table in general, or other aspects of the Initial

[[Page 54909]]

Regulatory Flexibility Act analysis. NMFS also did not receive comments 
on or related to baseline information on observer provider insurance 
premium costs, and thus the agency's estimates of such costs remains 
unchanged from the IRFA.

Small Business Compliance Guide

    Section 212 of the Small Business Regulatory Enforcement Fairness 
Act of 1996 states that, for each rule or group of related rules for 
which an agency is required to prepare a FRFA, the agency shall publish 
one or more guides to assist small entities in complying with the rule, 
and shall designate such publications as small entity compliance 
guides. As part of the rulemaking process, NMFS prepared a small entity 
compliance guide, which will be sent to all interested parties.

List of Subjects

50 CFR Part 600

    Administrative practice and procedure, Confidential business 
information, Fish, Fisheries, Fishing, Fishing vessels, Foreign 
relations, Intergovernmental relations, Penalties, Reporting and 
recordkeeping requirements, Statistics.

50 CFR Part 648

    Fisheries, Fishing, Reporting and recordkeeping requirements.

50 CFR Part 660

    Fisheries, Fishing, Indians, Recreation and recreation areas, 
Reporting and recordkeeping requirements, Treaties.

50 CFR Part 679

    Alaska, Fisheries, Reporting and recordkeeping requirements.

    Dated: August 31, 2022.
Samuel D. Rauch, III
Deputy Assistant Administrator for Regulatory Programs, National Marine 
Fisheries Service.
    For the reasons set out in the preamble, 50 CFR parts 600, 648, 
660, and 679, are amended as follows:

PART 600--MAGNUSON-STEVENS ACT PROVISIONS

0
1. The authority citation for 50 CFR part 600 continues to read as 
follows:

    Authority:  5 U.S.C. 561 and 16 U.S.C. 1801 et seq.

0
2. Add Sec.  600.748 to subpart H to read as follows:


Sec.  600.748  National Minimum Observer Provider Insurance Standard.

    (a) Applicability. As part of regulations for observer provider 
companies to obtain approval or a permit to deploy a person in any 
mandatory or voluntary observer program, or regulations that specify 
approved or permitted observer provider responsibilities, NMFS must 
reference and ensure compliance with the following national minimum 
insurance standard.
    (b) Policies and Coverage Amounts. (1) Marine General Liability ($1 
million any one occurrence or as provided under paragraph (d) of this 
section).
    (2) Marine Employers Liability ($1 million any one occurrence or as 
provided under paragraph (d) of this section) for an observer provider 
that is authorized, or has applied to be authorized, to deploy 
observers or monitors at-sea.
    (3) State workers' compensation as required by each state in which 
the observer provider is authorized, or has applied to be authorized, 
to deploy observers or monitors at-sea or shoreside.
    (4) U.S. Longshore and Harbor Workers' Act coverage, either as a 
stand-alone policy or as a state workers' compensation policy 
endorsement, if that policy or a policy endorsement is required by the 
respective state(s) in which the observer provider is authorized, or 
has applied to be authorized, to deploy observers or monitors at-sea or 
shoreside.
    (5) Excess or umbrella coverage ($2 million any one occurrence).
    (c) Scope of coverages. Coverage must extend to injury, liability, 
and accidental death during the period of employment, including 
training, of observers or monitors at-sea or shoreside.
    (d) Combined coverage amounts. Coverage amounts specified for 
Marine General Liability and Marine Employers Liability may be higher 
or lower for each respective policy so long as the combined coverage 
for these policies is $2 million.

PART 648--FISHERIES OF THE NORTHEASTERN UNITED STATES

0
3. The authority citation for 50 CFR part 648 continues to read as 
follows:

    Authority:  16 U.S.C. 1801 et seq.

0
4. In Sec.  648.11, revise paragraph (h)(3)(vii) to read as follows:


Sec.  648.11  Monitoring coverage.

* * * * *
    (h) * * *
    (3) * * *
    (vii) Evidence of holding insurance specified at Sec.  600.748(b) 
and (c) of this chapter.
* * * * *

0
5. In Sec.  648.87, revise paragraph (b)(4)(i)(G) to read as follows:


Sec.  648.87  Sector allocation.

* * * * *
    (b) * * *
    (4) * * *
    (i) * * *
    (G) Evidence of holding insurance specified at Sec.  600.748(b) and 
(c) of this chapter.
* * * * *

PART 660--FISHERIES OFF WEST COAST STATES

0
6. The authority citation for 50 CFR part 660 continues to read as 
follows:

    Authority:  16 U.S.C. 1801 et seq., 16 U.S.C. 773 et seq., and 
16 U.S.C. 7001 et seq.

0
7. In Sec.  660.17, revise paragraph (f)(1)(vii)(B) to read as follows:


Sec.  660.17   Catch monitor program.

* * * * *
    (f) * * *
    (1) * * *
    (vii) * * *
    (B) The observer provider must submit copies of ``certificates of 
insurance,'' that names the Catch Monitor Program Coordinator as the 
``certificate holder'' to the Catch Monitor Program Office by February 
1 of each year. The certificates of insurance shall verify all coverage 
provisions specified at Sec.  600.748(b) and (c) of this chapter and 
state that the insurance company will notify the certificate holder if 
insurance coverage is changed or canceled.
* * * * *

0
8. In Sec.  660.140, revise paragraph (h)(5)(xi)(C) to read as follows:


Sec.  660.140  Shorebased IFQ Program.

* * * * *
    (h) * * *
    (5) * * *
    (xi) * * *
    (C) Certificates of insurance. The observer provider must submit 
copies of ``certificates of insurance'' that name the Northwest 
Fisheries Science Center Observer Program manager as the ``certificate 
holder'' to the Observer Program Office by February 1 of each year. The 
certificates of insurance shall verify all coverage provisions 
specified at Sec.  600.748(b) and (c) of this chapter and state that 
the insurance company will notify the certificate holder if insurance 
coverage is changed or canceled.
* * * * *

0
9. In Sec.  660.150, add paragraph (j)(4)(xi)(A)(6), and revise 
paragraph (j)(4)(xi)(B)(3) to read as follows:

[[Page 54910]]

Sec.  660.150  Mothership (MS) Coop Program.

* * * * *
    (j) * * *
    (4) * * *
    (xi) * * *
    (A) * * *
    (6) Certificates of insurance. The observer service provider must 
submit copies of ``certificates of insurance'' that name the Northwest 
Fisheries Science Center Observer Program manager as the ``certificate 
holder'' to the Observer Program Office by February 1 of each year. The 
certificates of insurance shall verify all coverage provisions 
specified at Sec.  600.748(b) and (c) of this chapter and state that 
the insurance company will notify the certificate holder if insurance 
coverage is changed or canceled.
    (B) * * *
    (3) Certificates of insurance. The observer provider must submit 
copies of ``certificates of insurance'' that name the Northwest 
Fisheries Science Center Observer Program manager as the ``certificate 
holder'' to the Observer Program Office by February 1 of each year. The 
certificates of insurance shall verify all coverage provisions 
specified at Sec.  600.748(b) and (c) of this chapter and state that 
the insurance company will notify the certificate holder if insurance 
coverage is changed or canceled.
* * * * *

0
10. In Sec.  660.160, add paragraph (g)(1)(v) to read as follows:


Sec.  660.160  Catcher/processor (C/P) Coop Program.

* * * * *
    (g) * * *
    (1) * * *
    (v) Certificates of insurance. The observer provider must submit 
copies of ``certificates of insurance'' that name the Northwest 
Fisheries Science Center Observer Program manager as the ``certificate 
holder'' to the Observer Program Office by February 1 of each year. The 
certificates of insurance shall verify all coverage provisions 
specified at Sec.  600.748(b) and (c) of this chapter and state that 
the insurance company will notify the certificate holder if insurance 
coverage is changed or canceled.
* * * * *

PART 679--FISHERIES OF THE EXCLUSIVE ECONOMIC ZONE OFF ALASKA

0
11. The authority citation for 50 CFR part 679 continues to read as 
follows:

    Authority: 16 U.S.C. 773 et seq.; 1801 et seq.; 3631 et seq.; 
Pub. L. 108-447; Pub. L. 111-281.

0
12. In Sec.  679.52, revise paragraph (b)(11)(vi) to read as follows:


Sec.  679.52  Observer provider permitting and responsibilities.

* * * * *
    (b) * * *
    (11) * * *
    (vi) Certificates of insurance. Copies of ``certificates of 
insurance'' that name the NMFS Observer Program leader as the 
``certificate holder'' must be submitted to the Observer Program by 
February 1 of each year. The certificates of insurance shall verify all 
coverage provisions specified at Sec.  600.748(b) and (c) of this 
chapter and state that the insurance company will notify the 
certificate holder if insurance coverage is changed or canceled.
* * * * *
[FR Doc. 2022-19146 Filed 9-7-22; 8:45 am]
BILLING CODE 3510-22-P