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Launch seminar Thursday 8 October 2015

Launch seminar Thursday 8 October 2015. Nordic Plan 2013 Version 2016 Trine-Lise Wilhelmsen Hans Jacob Bull Kaja de Vibe Malling. The work in the Standing Revision Committee (SRC). Starting point: NP 2013 based on NMIP 2010 Nordic Plan Agreement No. 3 Composition of SRC:

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Launch seminar Thursday 8 October 2015

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  1. Launch seminar Thursday 8 October 2015

  2. Nordic Plan 2013 Version 2016 Trine-Lise Wilhelmsen Hans Jacob Bull Kaja de Vibe Malling

  3. The work in the Standing Revision Committee (SRC) • Starting point: NP 2013 based on NMIP 2010 • Nordic Plan Agreement • No. 3 Composition of SRC: • Nordic SAs, Cefor, Nordic average adjusters • Chair and secretary NIFS • No. 4: Revision every three years • SRC working from June 2014 to August 2015 with • Revision of clauses/commentary • Revision of commentary • Deleting history in commentary

  4. Overview of the amendments • Concepts: • «policy» = insurance contract • Cl. 1-1; definitions • Cl. 1-1/1-3; new rules on broker • Cl. 2-2/2-3; «assessed insurable value» • Sanctions (2-17) • Chapter 3, in particular safety regulation • Ch. 5 – Due date/subrogation

  5. Overview of the amendments • Chapter 7 and 8 (co insurance) • Hull ins. (10-12) – average adjuster group • Ch. 15 – several, mostly editorial • Ch. 16 - simultaneous repairs • Ch. 18 - substantial amendments by separate group • Ch. 19 – several

  6. Concepts; insurancecontract • «Policy» replaced with «insurance contract» • Cl. 1-2 : • «policy» upheld as the written confirmation of the insurance contract. • But distinguished from «insurance contract» • = individual agreement (policy and conditions) • The point to avoid using «the policy» on the contract because formal policy often replaced with data processed insurance confirmation

  7. The policy vs. The insurancecontract

  8. Concepts; broker • Cl. 1-1 (d); «broker» = entity instructed by the person effecting the insurance to act as intermediary • Cl. 1-3: Broker authority to • act on behalf of person effecting insurance • receive return of premium/settlements of claim • But not to receive premium on behalf of the insurer

  9. The broker is representingthe person effectinginsurance, not theinsurer NHC DNK TSC GARD CODAN Etc.

  10. Concepts; agreedinsurablevalue • Cl. 2-2/Cl. 2-3 • Assessed replaced with «agreed» • The parties may agree – as before • The sum insured deemed to constitute agreed insurable value • Taken from Ch. 18 • For the purpose of clarity

  11. Cl. 2-17 SanctionLimitation and Exclusionclause No insurer shall be deemed to provide cover and no insurer shall be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit may expose that insurer or his reinsurers to any sanction whether primary or secondary, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, the United Kingdom, the United States of America, France, the Russian Federation, the People’s Republic of China or any State where the insurer or his reinsurers have their registered office or permanent place of business. In the event of the subject-matter insured having been engaged or engaging in any activity whatsoever that may expose the insurer or his reinsurers to any sanction whether primary or secondary, prohibition, restriction, law or regulation as described in sub-clause 1 above, the insurer shall be entitled to terminate the insurance by giving 14 days’ notice. Termination also applies to the rights of the mortgagee, but the insurer shall immediately notify the mortgagee of the termination.

  12. CountriesthatintroducedsanctionsagainstRussia

  13. Ch. 3; Cl. 3-15 • (2) The insurer may stipulate safety regulations • (3) Claims arising out of ice damage due to failure to exercise due care further reduction in liability • (4) Held covered in conditional areas if notified

  14. Ch. 3; Safetyregulation, the Plan • Cl. 3-22 last sub-clause deleted • Cl. 3-22 new sub-clause instead of 12-5(f): When establishing the Safety Management System that is necessary to fulfil the assureds obligation to comply with the International Safety Management Code as adopted by IMO, the assured shall ensure that the system includes instructions and procedures for the use and monitoring of lubricating oil, cooling water and boiler feed water. Cl. 3-25, sub-clause 2 shall not be applied.

  15. Ch. 3; Safetyregulation, theCommentary • Modernized and rewritten • The issues: • Specific duties vs. functional requirements • The ISM code addressed in more detail: • Status as a safety regulation; the Code per se, and not the individual instruction or procedure • Causation if failure to supervise the system leads to repeated breaches of f.ex. look out procedures • Burden of proof • Negligence measured against breach of the Code

  16. Ch. 3; Safetyregulation, theCommentary; issues • Safetyregulation «stipulated in theinsurancecontract» • The policy or alsoregulations in the Plan?

  17. Panel: Safety Regulations • Marthe Romskoug (Wilhelmsen Insurance Services) • Nicolas Wilmot (Gard) • HogneNesse (HøeghAutoliners) • Frode Berg (Willis) Moderator: Hans Jacob Bull

  18. Chapter 5 Settlement ofclaims -Amendments

  19. Cl. 5-6. Due date • The time limit is amended from six to fourweeks “Compensation is payable four weeks after the date when the claim adjustment is or should have been issued.”

  20. The Commentary to Cl. 5-13, sub-clause 2 • Cl. 5-13 regulates the right of subrogation of the insurer to claims by the assured for damages against third parties. • Sub-clause 2 regulates the situation wheretheinsurer is onlypartlyliable for the loss.

  21. The Commentary to Cl. 5-13, sub-clause 2 • New comments and examples (guidelines) in the Commentary to sub-clause 2 regarding allocation of common deductibles between liability and damage, and apportionment of recoveries in this respect

  22. Ch. 7 Co-insuranceofmortgageesCh. 8 Co-insuranceofthirdparties • Overview • Ch. 8 The Plan: All clauses have beenreorganized and rewritten. Few material changes • Ch. 8 The Commentary: Completelyrewritten • Ch. 7 The Plan: No alterations in theclauses • Ch. 7 The Commentary: Partlyrewritten.

  23. Cl. 8-1 Rights ofthirdpartiesagainsttheinsurer • Main elements as before • No automatic co-insurance – «explicitlyeffected» • The third party does not have to be explicitlynamed • The insurance covers «thethirdparty’sinterest» • New «formal» elements • «withinthescope and overall limits oftheinsurance» • Some elements have beenmoved/deleted • Identificationrulesmoved to Cl. 8-3 sub-clause 3 • Handling ofclaims, etc. moved to Cl. 8-5 • Previousprotectionagainsttheinsurer’sset-offdeleted

  24. Cl. 8-2 Protectionofthirdpartiesagainstsubrogationclaims from theinsurer • The Clause is new • Spells outwhentheinsurer has a right ofsubrogationagainst a co-insuredthird party • Main rule: no right ofsubrogation • Exception 1: Specified in theinsurancecontract • Exception 2: The co-insured has undertaken «an expresscontractualobligation» to remainliable for losses covered by theinsurance

  25. Cl. 8-3 Application oftherules in Chapter 3 and Cl. 5-1 • The Clause is partlynew • Sub-clause 1: Corresponds to thepreviousCl. 8-2 sub-clause 1 (the co-insured’sdutyofdisclosure) • Sub-clause 2: No formal parallell in previous Plan (the co-insured’sdutyofcare) • But: No material change • Sub-clause 3: Corresponds to thepreviousCl. 8-1 sub-clause 1 in fine (identification) • The previous Cl. 8-2 sub-clause 2 is not repeated as beingunpractical • ole cl. 8-2

  26. Cl. 8-4 Amendments and cancellationoftheinsurancecontractCl. 8-5 Handling ofclaims, claimsadjustments, etc. • Cl. 8-4: Correspondsfullywiththeprevious Cl. 8-3 • Cl. 8-5: Correspondsfullywiththeprevious Cl. 8-1 sub-clause 2 (first alternative, reference to Cl. 7-3, sub-clause 1)

  27. Cl. 8-6 OtherinsuranceCl. 8-7 Independent co-insuranceofmortgagees and namedthirdparties • Cl. 8-6: The Clause is new • The insurance is subsidiary to anotherinsurancetakenout by the co-insuredthird party • Cl. 8-7: The Clausecorresponds to theprevious Cl. 8-4 • Appliesboth to mortgagees and otherthirdparties; expresslysaid in the heading oftheclause • Needs an explicitagreement to be activated • The co-insured party has to be explicitlynamed • No identificationwithothers • But: unpaidpremium

  28. Ch. 8 Commentary • The Commentary has beencompletelyrewritten • A new general introduction • Explainstheconcept «theassured» • ExplainstherelationshipbetweenthetwoChapters 7 and 8 on «co-insurance» • Explainsthe different interests a third party maywish to cover through co-insurance • Modernized and more helpfulcomments to all theclauses in Ch. 8 • All historic material and comparisonswith Nordic ICAs have beendeleted

  29. Chapter 7 Co-insuranceofmortgageesThe Plan The Commentary • The Plan • No amendmentsmade to thetextitself • The Commentary • The general introduction to thechapter has beenrewritten, and containsreferences to theCommentary to Ch. 8 • The Commentary to the separate clauses has beencarefullymodernized • All references to historic material and to the Nordic ICAs have beendeleted

  30. Panel: Co-insurance of third parties • ÖrjanKarlsson (Stena Rederi) • Marthe Romskoug (Wilhelmsen Insurance Services) • Roar Sanden (Norwegian Hull Club) Moderator: Hans Jacob Bull

  31. Ch. 10 General rulesrelating to thescopeofthe hull insurance • Cl. 10-1, sub-clause 2, letter (a) • The word “supplies” has been replaced by “provisions”: “The insurance does not cover: • provisions, engine and deck accessories and other articles intended for consumption,”

  32. Ch. 12 Damage • Text and Commentary: • (Cl. 12-5 letter (f) is deleted) • Cl. 12-14. Apportionmentofcommonexpenses • Cl. 12-15. Icedamagedeductions • Commentary: • Cl. 12-1. Main rule concerning liability of the insurer

  33. Cl. 12-14. Apportionmentofcommonexpenses • Text: second sentence is amended • The words “common expenses which depend on the length of the period of the repairs” is replaced with “dry dock charges and quay rental” • “each category”

  34. Cl. 12-14. Apportionmentofcommonexpenses • The Commentary is largely rewritten, in order to reflect current adjusting practice • Relevant ”categories” ofwork • The basis onwhichthecommonrepairexpensesshall be apportioned • Examplesofcommonrepairexpenses to be apportionedon a costbasis and • expenses to be apportionedon a ”time required” basis • Examplesofexcludedexpenses

  35. Cl. 12-15. Icedamagedeductions • A new second sentence emphasizing that the ice damage deduction comes in addition to the general deductible under Cl. 12-18, sub-clause 1, is added: “Damage due to striking against or contact with ice - excluding collision with icebergs on the open sea - is recoverable subject to a deduction stated in the insurance contract. To this shall be added the deductible referred to in Cl. 12-18, sub-clause 1.”

  36. Cl. 12-1. Main ruleconcerningliabilityoftheinsurer • New paragraphs in the Commentary regarding electricity consumption as a common repair expense • Any extra electric power actually consumed due to repair work being effected = allowed as a common repair expense as per Cl. 12-1 • The assured has the burden of proving the extent of loss, cf. Cl. 2-12, sub-clause 1 • Practice

  37. Panel: Chapter 10-12 amendments • SveinungMåkestad (Gard) • Bjørn Slaatten (Average Adjuster) • HogneNesse (HøeghAutoliners) Moderator: Hans Jacob Bull

  38. Ch. 15, 16 and 19 amendments

  39. Ch. 15 War risks insurance • Severalamendments (mostlyeditorial): • Cl. 15-1. Perilscovered (sub-clause 2) • Cl. 15-3. Sum insured (sub-clause 2 letter (b)) • Cl. 15-4. Safetyregulations (sub-clause 2) • Cl. 15-5. Warbetween major powers • Cl. 15-7. Bareboatchartering • Cl. 15-8. Cancellation • Cl. 15-22. Limitations to the cover • The Commentary

  40. Cl. 15-8. Cancellation • Sub-clause 1 first sentenceis amended by addingthewords in brackets to clarifywhenthecancellationtakeseffect “In the event of a change of risk, the person effecting the insurance as well as the insurer is entitled to cancel the insurance by giving seven days’ notice (such cancellation becoming effective on the expiry of 7 days from midnight of the day on which notice of cancellation is issued by or to the insurer). (…)”

  41. Cl. 15-8. Cancellation • Sub-clause 2 is rewritten: The insurer will endeavour, to the extent practically and commercially possible, to submit a proposal for continuation of the insurance at the best available terms in the changed circumstances.

  42. Ch. 16 Loss-of-hire insuranceCl. 16-12. Simultaneousrepairs • Text and Commentary • First sentence is editoriallyamended • A new last sentence in sub-clause 4 • Clarifythattheinsurer’sliability in anyevent is limited to whatwould be payable in case thecategoryofwork for whichhe is liablehadbeencarriedoutseparately.

  43. Cl. 16-12, sub-clause 4, last sentence ”However, theinsurer’sliabilityshall not exceedtheamountthatwould have beenpayableifthecategoryofwork for whichhe is liablehadbeencarriedoutseparately.”

  44. Ch. 16 Loss-of-hire insurance • Cl. 16-6 and Cl. 16-14 sub-clause 2 • ”assessed” is replacedwith ”agreed”, ref. clauses 2-2 and 2-3

  45. Ch. 19 Builders´risks insurance • Severalamendments in thetext, someofthemaremerelyeditorial

  46. Cl. 19-2A. Premium in theeventof a total loss • New Clause • Corresponds to Cl. 18-83 “If the insurer compensates for total loss pursuant to Cl. 19-13, sub-clause 1, or pays the sum insured pursuant to Cl. 4-21, he is entitled to the entire agreed premium.If the insurer compensates for total loss pursuant to Clause 19-13, sub-clause 2, he is only entitled to the proportion of the entire agreed premium that corresponds to the ratio between the compensation paid and the sum insured.”

  47. Cl. 19-14. Damage/Ref. Chapter 12 • A new last sentence is added in order to bring thetext in line withtheCommentary ”If thesubject-matter insured or components etc. have beendamagedwithoutCl. 19-11 or Cl. 19-12 beingapplicable, therules in Chapter 12 shallapply, withtheexceptionof Cl. 12-3, Cl. 12-4, Cl. 12-5 (d), (e) and (f), Cl. 12-6 and Cl. 12-15 to Cl. 12-18. Cl. 12-3 shall apply to rebuilding/conversion of the subject-matter insured.”

  48. Cl. 19-21. Limitationsontheliabilityinsurance • The Clause is amended to be verbatim the same as Cl. 18-98, sub-clauses 5 and 6 • The words ”contractor or sub-contractor” is added in sub-clause 1 letters (a), (b) and (d) • Editorialamendments

  49. Editorialamendments in Ch. 19 • Cl. 19-8. Deductible • The words ”anyone” is replacedwith ”each” • Cl. 19-16. Compensation for unrepaireddamage • The reference is changed from Cl.19-3 to Cl. 19-2 • Cl. 19-17. Costsincurred in order to save time • A new letter (c) is inserted

  50. Nordic Marine Insurance Plan Version 2016 amendments Chapter 18

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