No. 23 2014/2015 - Renewals 2015/2016
CLASS 1 (P & I)
We refer to Notice to Members No. 15 dated November 2014. This Notice provides an update.
1. INTERNATIONAL GROUP POOLING AND REINSURANCE 2015/2016
For 2015 the individual Club retention is to remain unchanged at $9 million each vessel each incident. The Pool retention will also remain at $80 million (with 10% increasing to $100 million, up from 5% for 2014). The first layer of the Group’s excess of loss reinsurance programme for $500 million will take effect at $80 million, but the Pool will continue to co-insure 30% of risks within the layer to $580 million. In addition, for the first time, the Group will also co-insure a further 30% of claims from $80 million to $120 million within the layer. These retained 30% shares will both be reinsured by Hydra, the Group’s captive, which itself will protect its exposure with market reinsurance.
2. LIMITS ON CLUB COVER 2015/2016
For oil pollution claims the overall limit of Club cover will continue to be $1 billion (other than for charterer’s risks) as set out in the Rules and the Members’ terms of entry.
As is the case for 2014, a combined limit on Club cover for passenger and seamen’s liabilities of $3 billion each incident for each entered vessel together with a sub-limit of $2 billion for passenger liabilities shall also apply.
The overall limit of Club cover for claims, other than for oil pollution and for claims involving passengers and seamen or as otherwise set out in the Rules and Members’ terms of entry, shall remain unchanged at 2.5% of the 1976 Limitation Convention limit for property claims in excess of $2.08 billion, but a Group overspill protection will again be in place for 2015 to protect the Club for its share of any overspill liabilities for claims of up to $1 billion in excess of $2.08 billion.
3. GROUP REINSURANCE RATES 2015/2016
For 2015 Group reinsurance rates per GT, which are to be charged as separate fixed costs together with 2015 advance call rates, will be as follows:
|DIRTY TANKERS||$ 0.7317|
|CLEAN TANKERS||$ 0.3138|
|DRY CARGO VESSELS||$ 0.4888|
|PASSENGER VESSELS||$ 3.7791|
These rates include the premium charged to fund the upper Pool layers ($50 million in excess of $30 million) which is paid to Hydra as reinsurer of the Pool’s upper layer liabilities and the cost of the overspill protection referred to earlier.
4. WAR RISK P&I 2015/2016
The terms and conditions of the excess war risk P&I cover for 2015 have been agreed with the commercial war risk market and will be on the same terms and conditions as for 2014.
The terms, which are set out in full in Rule 14 and Members’ terms of entry, will apply automatically for all Members for the new policy year. The principal features are:-
- The cover is to pay claims only in excess of amounts recoverable under a Members’ underlying war risks P&I policy. The cover is also excess of war risk cover provided to Charterers under Rule 3. It is not intended as a substitute for traditional market war risks cover. Members are therefore expected to maintain their existing war risks cover including cover for P&I risks to the maximum extent available (up to a maximum of $100 million).
- The cover is subject to notice of cancellation and automatic termination provisions and excludes nuclear risks.
- The cover is subject to a Chemical, Biological, Bio-Chemical, Electromagnetic Weapons and Computer Virus exclusion.
- The limit of cover is $500 million each vessel any one accident, but shall not exceed in aggregate $500 million in respect of all Members’ entries whether Owners’ or Charterers’ and irrespective of whether or not such entries are entered with the West of England or any other International Group Club.
- The premium payable for the cover shall be $0.00725 per gross ton entered for Owners’ entries. It will be payable with, and is included in, the rates per gross ton charged for the Group’s excess of loss reinsurance premium as a fixed cost per gross ton as set out in Section 3 of this Notice. The rate for Charterers’ entries is $0.00258 per GT.
The estimated cost within these rates for the provision of cover in accordance with TRIA is $0.0025 per gross ton entered. Members who may qualify for TRIA protection will be advised individually.
- The cover permits worldwide trading but excludes risks in respect of vessels trading in breach of any Exclusion Notice issued by the Club or reinsuring underwriters.
5. CHARTERERS ENTRIES 2015/2016
For 2015 Charterers will be entered through the Club’s CHARTERERS’ COMPREHENSIVE COVER (CCC) in accordance with Rule 3(B).
For 2015 the terms and conditions of the Charterers’ Comprehensive cover, which includes damage to Hull where required, remain unchanged with an aggregate limit of cover of $500 million. Cover is however available for $750 million for those Members that require it on specific application to the Managers.
As usual precise terms of entry for all chartered entries shall anyway be subject to agreement with individual Members on a case by case basis.
6. CLASS 2 (FD&D) 2015/2016
As advised in Notice to Members No. 20 2014/2015 for 2015, Class 2 (FD&D) cover will be on the same terms and conditions as for 2014 except that the overall limit on Club cover shall be increased from $5 million ($2 million for new building risks) to $10 million for all vessels including vessels entered for new building risks. Additional cover for a further $5 million can also be provided for those Members that require it on specific application to the Managers.
Should Members have queries about any of the matters raised in this Notice please do not hesitate to contact the Managers in the usual way.
For: West of England Insurance Services (Luxembourg) S.A.
P E Spendlove