Alterations to the Rules of the Association
To the Members
As described in our circular No.20-016 dated 2 December 2020, the following alterations to the Rules of the Association (the "Rules") will become effective from 12 noon GMT on 20 February 2021 for the 2021 policy year. There will also be an alteration to the Special Clause. The amendments are explained below, and extracts of the relevant provisions are attached hereto.
- Alterations to the Rules
Rule 28 (Quarantine Expenses)
To make it clear that the trigger for coverage is an outbreak of infectious disease “on board”.
Rule 31.1(1)~(5) (Fines)
Concerns were expressed in the International Group of P&I Clubs that providing insurance coverage for smuggling fines could be seen by some governmental authorities as undermining the intended effect of the penalties, and that continuing to provide insurance coverage for such items could have both financial and reputational consequences for the Group, and was inconsistent with the Clubs’ sustainability goals.
For this reason, our Rules are to be amended along the lines of amendments to the Pooling Agreement of the International Group of P&I Clubs, which will exclude from the 2021 Policy Year onwards cover as of right for loss / damage due to fines and penalties arising out of smuggling or any attempt at such. Accordingly, the existing items (3) to (5) are renumbered.
Rule 34.2 (Deductibles)
We have a specific deductible amount, and not a percentage, for claims under most of our Rules (except for FD&D).
Where, however, the deductible applicable to a claim is a percentage of the covered amount and a limitation fund is constituted further to a loss, it may be difficult to finalise the amount of the deductible. For example, a deposit may be payable with interest accruing on top of the payment amount from the date of the loss, meaning that the claim amount from which to calculate the percentage deductible is always changing. Our existing Rule 34(2) thus stipulates that, where the liability of the Member is limited by any laws concerning limitation of owner’s liability, Rule 37 provides an exception to the provisions of Rule 34(1). As stated above, the deductible amount is pre-agreed between the Association and the members for claims under most of our Rules, and especially for claims that possibly involve setting up a limitation fund. We have therefore amended Rule 34(2) to allow the deduction from a payment of insurance money of an agreed deductible amount for claims under Rule 37. The amount of the deductible will be agreed between the Association and the member and will be applied to the sum of liabilities, costs and expenses in case of claims that involve limitation funds.
Rule 35.1(6) (Risks Generally Excluded)
To make it clear that the excluded “salvage operations” include any similar operations other than the wreck removal.
Rule 46.1&2 (Recoveries)
We have made slight amendments to the English text to achieve consistency with the original Japanese version.
- Alteration to the Special Cover and Special Clause
Special Cover for Salvor’s Liability in respect of Oil Pollution
The amendment is in accordance with the renumbering of the existing Rule 31. 1(5).
Special Cover for Freight, Demurrage and Defence(FD&D) Rule 12
A new Rule12 is incorporated, which clarifies procedures in case the Association or the Member makes a recovery from a responsible third party.
Special Cover for Freight, Demurrage and Defence(FD&D) Rule 13
Given there is a new Rule 12, what was Rule 12 in the 2020 Rules becomes Rule 13.
Marine Cyber Exclusion Clause*
Coronavirus Exclusion Clause*
*Please refer to our circular No.20-021 dated 25 January 2021 for details.
A Rule Book for the 2021 Policy Year is scheduled to be posted on our website in early February 2021.