[Code of Federal Regulations]
[Title 7, Volume 7]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR738.27]

[Page 295]
 
                          TITLE 7--AGRICULTURE
 
                            CHAPTER VII--FARM
                SERVICE AGENCY, DEPARTMENT OF AGRICULTURE
 
PART 738--WOOL WAREHOUSES--Table of Contents
 
Sec. 738.27  Insurance; requirements.

    (a) Each warehouseman, when so requested in writing as to any wool 
by the depositor thereof or lawful holder of the receipt covering such 
wool, shall, to the extent to which in the exercise of due diligence he 
is able to procure such insurance, keep such wool while in his custody 
as a warehouseman insured in his own name or arrange for its insurance 
otherwise to the extent so requested against loss or damage by fire or 
lightning. When insurance is not carried in the warehouseman's name the 
receipts shall show that the wool is not insured by the warehouseman. 
Such insurance shall be covered by lawful policies issued by one or more 
insurance companies authorized to do such business and subject to 
service of process in suits brought in the State where the warehouse is 
located. If the warehouseman is unable to procure such insurance to the 
extent requested, he shall, orally, or by telegraph, or by telephone 
immediately notify the person making the request of the fact. Nothing in 
this section shall be construed to prevent the warehouseman from 
adopting a rule that he will insure all wool stored in his warehouse.
    (b) Each warehouseman shall keep exposed conspicuously in the place 
prescribed by Sec. 738.6 and at such other place as the Administrator or 
his representative may from time to time designate, a notice stating 
briefly the conditions under which the wool will be insured against loss 
or damage by fire or lightning.
    (c) Each warehouseman shall, in accordance with his contracts with 
insurance and bonding companies for the purpose of meeting the insurance 
and bonding requirements of the regulations in this part, pay such 
premiums, permit such reasonable inspections and examinations, and make 
such reasonable reports as may be provided for in such contracts.
    (d) Each warehouseman shall promptly take such steps as may be 
necessary and proper to collect any moneys which may become due under 
contracts of insurance entered into by him for the purpose of meeting 
the requirements of the regulations in this part, and shall, as soon as 
collected, promptly pay over to the persons concerned any portion of 
such moneys which they may be entitled to receive from him.