Page 38 - Marine Insurance IC67 EBOOK
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irrespective of the sum insured have mechanism to ensure by additional premium
necessarily to be referred to HO for across the portfolio is not feasible.
acceptance.
n Complete papers namely, duly completed Hence it has become necessary to avoid
proposal form, relevant documents including exposure to higher risks.
valuation report, suggestive rate along with ------------------------------------------------------------------------
detailed working etc have to be forwarded to
HO well in advance with specific Sanctions clause to be incorporated in
recommendations of the RO. marine policies.
------------------------------------------------------------------------ Date: 14.3.2012
Guidelines for acceptance of Bulk Cargo As you may be aware there are certain countries
with respect to Age and classification like Iran, Iraq, Afghanistan, Pakistan, North Korea,
clause of the vessel. Northern Sri Lanka, Somalia, Chechnya, Bosnia,
Date: 24.01.2012 Syria and Libya which are prohibited/restricted
under United Nations resolutions or the trade or
A. Background economic sanctions, laws or regulations of the
It is observed of late that major cargo losses are European Union, United Kingdom or the United
related to vessels having the following adverse States of America.
underwriting factors:
a. Vessels being more than 25 years of age Oflate, the R/I driven cargo policies in cases of
b. Vessels without valid class import/export from/ to such countries are
c. Bulk carrier accepted by the Re-insurers subject to "
Sanctions Clause" which specifies any cargo to /
The use of Institute Classification Clause under from such places/countries are prohibited/
Marine policies, which reflects universal restricted. Even in case of policies issued by the
perception and practice of Insurers to avoid underwriting offices directly, where the SI falls
coverage on normal terms on the basis of age, within their acceptance limits and if any claim is
class or nature of carrier. However the "held reported under such transits, our company will
covered" stipulation in the classification clause not be in a position to recover the loss from the
could still expose insurer to bear such higher Treaty re-insurers. This will ultimately lead to a
risks than intended and we may be unable to situation where such liability may fall to our
avoid liability notwithstanding that vessel fails to Company's Additional Net account.
conform to the requirements of the Classification
clause. Therefore, the Sanctions clause will apply to all
types of Marine policies issued and not
Though "held covered" stipulation in the Institute exclusively for reinsurance driven policies.
classification clause contemplates higher rate,
insurer rarely receives the same, although it may Further, due to the new sanctions on Iran's
be chargeable in several cases. There is no proper financial sector by US, the claim settlements on
mechanism to ensure receipt of any higher Marine transit policies to such countries, have
premium. become complex.
Consequently, Insurer is exposed to bad risks In view of this, it has been decided that in all
without receipt of proper premium and a viable marine Transit policies/project policies/MCE
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