The physical inadequacies of most vessels and the lack of 

 knowledge of seamanship among the majority of captains are not a 

 matter of operational cost alone but also a matter of function and 

 practice or custom. The obvious conflict between the vessel's sea- 

 worthiness or the captain's seamanship and profitable fishing 

 operations is an aspect of the insurance problem deserving serious 

 consideration. 



Labor shortages, poor recruiting practices, and high labor 

 turnover in some types of fishing are also important factors in the 

 rise of the problem in hull insurance, but particularly in protection 

 and indemnity insurance . 



It was found that the incidence of insurance has increased the 

 hazard. There is a highly significant direct association between the 

 occurrence of insurance and loss experience. High propensity to in- 

 sure is associated with relatively unfavorable loss experience and 

 vice versa . This situation is known to occur in other lines of 

 insurance . 



An inverse correlation between loss experience for hull insurance 

 and fishermen's gross receipts was found in New England and to a 

 lesser extent in the Gulf Area. Although the data in California fall 

 to show such an inverse relationship, the close association between 

 the occurrence and severity of accidents and economic conditions else- 

 where throws abundant light on the long rxin forces which underlies 

 the insurance problem. The importance of moral hazard differs from 

 area to area and from port to port, but its probable presence is 

 confinned everywhere by vessel owners and insuremce people alike. 

 The vessel owner clearly understands the close association between 

 economic conditions in the industry and the hull insurance problem. 

 Declining income results in declining maintenance of his vessel. His 

 business outlook is a pessimistic one. Although government assistance 

 is welcomed by a large majority of owners and suggestions for measures 

 to improve safety standards, rating, and adjustment of claims are 

 numerous, the general concensus is that nothing short of measures to 

 improve economic conditions in the industry can alleviate the hull 

 insurance problem. 



In contrast, the protection and indemnity insurance problem has 

 its roots, on the one hand, in the onerous maritime laws, especially 

 that part of the Merchant Marine Act of 1920 known as the Jones Act, 

 which authorizes prosecution of vessel ovmer liability for accidents 

 and other damages in the Federal Courts and, on the other hand in the 

 attitudes and conduct of labor within the industry, especially organized 

 labor. The paramount importance of existing maritime law, especially 

 the Jones Act, as a single and ultimate source of the problem in pro- 

 tection and indemnity insurance did not escape the vessel owner's 

 attention. Pleas for the repeal of the Jones Act and extension of 

 workmen's compensation to fishermen are the most frequently suggested 

 solutions to the problem. 



