As described in our circular No.21-009 dated 17 November 2021 and circular No.21-014 dated 19 January 2022, the following alterations to the Rules of the Association (the "Rules") will become effective from 12 noon GMT on 20 February 2022 for the 2022 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.

Rule 1.10 (Conclusion of Insurance Contract)

To stipulate that the Association is entitled to refuse an application under certain conditions.

The reasons for refusal of an application include:

1. that the person desiring to insure his ship has links to a terrorist organisation or drug cartel; or,
2. that the person desiring to insure his ship is involved in any way in violations of sanctions, embargoes or any other restrictions imposed by any regulatory authorities and / or government bodies of Japan, the United States, European Union, or the United Kingdom; or,
3. that, taking relevant facts, such as the condition of the ship and the management systems, into consideration, the person desiring to insure his ship fails to prove that the ship, which he wishes to enter in the Association, is within the Association’s risk tolerance.

Rule 8.3(3) (Default in Payment of Calls and Premiums)

To stipulate the allocation of payments made which do not wholly extinguish sums of principal, interest, and expenses due from the Member

Rule 10 introductory clause and (4) (Continuation of Insurance Contract)

To stipulate that the Association may discontinue the insurance contract in the ensuing policy year if the Association and a Member cannot agree on the insurance conditions, and also to make clear such reasons as the Association may deem it justifiable to discontinue the insurance contract.

The reasons for discontinuation of insurance contract include:

1. that a Member has links to a terrorist organisation or drug cartel; or,
2. that a Member is involved in any way in violations of sanctions, embargoes or any other restrictions imposed by any regulatory authorities and / or government bodies of Japan, the United States, European Union, or the United Kingdom; or,
3. that, taking relevant facts, such as the condition of the ship and the management systems, into consideration, a Member fails to prove that the ship, which he wishes to enter in the Association, is within the Association’s risk tolerance.

Rule 15.6 (Joint Entry)

To make it clear that the limits on the cover shall apply to all insured parties in the aggregate.

Rule 21.1(2) (Liabilities in respect of Illness, Injury or Death of Third Parties)

To make it clear that the person who may be landed can either be sick, injured or dead.

Rule 21.1(3) (Liabilities in respect of Illness, Injury or Death of Third Parties)

To make it clear that the costs and expenses incurred as a result of a deviation shall be indemnified regardless of success or failure of the rescue.

Rule 24 introductory clause (Loss of or Damage to Property)

To make it clear that the losses in connection with liabilities which a Member assumes as a result of entering into a contract with third parties and where the terms of such contract have not been approved by the Association in advance shall not be indemnified.

Rule 35.1(13) (Risks Generally Excluded)

The IG pooling agreement in respect of non-marine personnel previously set out a minimum distance between the insured vessel and an oil or gas production or exploration facility. This provision has been deleted and the clause has been amended to provide that Clubs should focus on a contractual allocation of risk which must be approved in advance.

Rule 36(5) (Risks Specifically Excluded)

The amendment is to add “delay to (the Entered Ship)” as regards the excluded claims, which was previously missing.

Rule 37.6 (Limitation of Coverage)

Following the recommendation of the International Group, a new section of Rule 37 (Rule 37.6) will be added whereby the Association is given the right, but not the obligation, to prioritise certified claims and other direct liabilities over uncertified claims.

WHO Communicable Disease Exclusion Clause

Following changes in the terms and conditions of reinsurance arranged by the Association from the 2022 policy year, a new special clause entitled “WHO Communicable Disease Exclusion Clause” (which replaces the existing Coronavirus Exclusion Clause), will form part of the contract for all insurance entries, special covers and other additional insurance policies (policies incepting on or after 20 February 2022) except for mutual entries, which are insured under the International Group reinsurance programme. The new special clause excludes cover for costs and expenses directly arising from the transmission of any communicable disease declared as a Public Health Emergency of International Concern (PHEIC) by the World Health Organization (WHO) or from any fear or threat of such communicable disease, expenses related to quarantine, and other economic losses, etc.

A Rule Book for the 2022 Policy Year is scheduled to be posted on our website in the middle of February 2022.