Circulars only on our website

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1 Gothenburg 13 December 2011 Circulars only on our website In our ambition to become kinder to the environment and in line with wishes from several members, we have decided to mainly publish our circulars under the node News/Circulars on the website: The following Circulars will still be posted to you in a paper version: Protection & Indemnity Insurance, part 1 P&I insurance, policy years FD&D insurance, policy years H&M Insurance Protection & Indemnity Insurance, part 2 FD&D insurance Yours sincerely, The Swedish Club Lars Rhodin Information P&I Circular news 2011

2 P&I 2531/ December 2011 Protection & Indemnity Insurance 2012/2013 Section 1: Statement from the Management Executive summary Claims frequency on the rise and severity likely to follow the same picture coupled with an underlying claims inflation at 3-5% First half year result positive but reversed picture expected for second half year Continued positive momentum and market attraction for the Club in all markets coupled with healthy growth A general increase of 5% in addition to adjustments reflecting changes in Group reinsurance costs An increase in deductibles for cargo and crew in the amount of USD 1,000 respectively mentioned shift in frequency the second half of the year has shown a weaker underwriting result. Our portfolio The Club continues to benefit from a positive momentum with encouraging response from Owners and Charterers as well as from the broker community. Our portfolio has continued to show good progress and growth as shown below. The guiding star in all marketing and underwriting efforts remains as previously always sustainability and quality before volume. Claims frequency, severity and inflation Recent industry reports, as well as our own statistics, clearly indicate a consistent pattern of an increasing claims frequency. Lately, we have also, along with other IG Group clubs, noticed a negative change in relation to claims severity. Although the severity is yet to materialise to a clear trend, we will monitor future development carefully in order to be able to respond and manage the effects that this might have on actual exposure going forward. Additionally, we see an underlying claims inflation of 3-5% running at present. Underwriting results For the second time around, we published our half year report in September. The half year report 2011 evidenced a satisfactory underwriting result and a combined ratio ahead of our goal; of 100% or less. As a result of volatility and above Rationale: General Increase policy year 2012/2013 For the policy year 2012/13 the Club s Board of Directors has decided on a 5% general increase. This decision is to address in particular the underlying claims inflation level and the Club s need to continue to keep the premium commensurate with exposure. ` ` P&I Circular 2011

3 The Swedish Club s terms for the 2012/13 P&I renewal, endorsed by the Board at the 1 December 2011 Board meeting in London A general increase of 5% for P&I together with adjustments reflecting changes in reinsurance costs An increase in cargo and crew deductibles of USD 1,000 each A methodical assessment of each Member s exposure and records performance, with particular attention paid to claims frequency and larger claims An estimated release call of 25% for 2012/2013 Section 2: Descriptive part Decisions and Instructions At the meeting in London, on 1 December 2011, the Board of Directors decided with regard to premium for the policy year 20 February 2012 to 20 February 2013: The Board of Directors: decided to levy a general increase of 5% instructed the management to contact each Member individually to discuss renewals for 2012/13 after levying the general increase, the new call will be adjusted by any changes in the International Group s reinsurance cost. The call will also reflect the true exposure of our retention, as well as estimated contributions to pool claims, together with an assessment of the Member s records and risk exposure an increase in cargo and crew deductibles of USD 1,000 each Owner s Protection & Indemnity Premiums All premiums are debited as advance and supplementary calls. It is anticipated that this policy year will be closed in the year The Board decided that the premium shall be debited in four instalments: at inception on 20 February, 20 May, 20 August and 20 November. The premium will be based on Gross Tons (GT) as per the International Convention on Tonnage Measurements of Ships Supplementary Call Any supplementary call for this year will initially be decided upon in The current estimated supplementary call for 2012/13 is 0%. Release Call The release call for 2012/13 is presently set at 25%. Members should be aware that, even if a release call has been paid, the Association retains the right to make overspill calls as per the P&I Rules (Rule 24). Renewals The premium for 2012/13 will be based on the Member s record for the five-year period , including the current year, if adverse. Records and claims summaries are available through SCOL, located on the Association s website at The information is updated overnight. Payment of Premium Premiums are to be paid in accordance with the enclosed Procedures for Payment of Premium. Limit of Liability The overall liability of the Association for 2012/13 is, unless otherwise stated in the Policy or in the P&I Rules, limited to a maximum collection of 2.5% contribution for each entered vessel based on the International Convention on Limitation of Liability for Maritime Claims 1976, property claims Article 6 paragraph 1(b), in excess of reinsurance jointly placed by the International Group. (See also current P&I Rules, Appendix ) The limit of liability for Oil Pollution is USD 1 billion. In respect of P&I Excess War Risk Cover the limit is USD 500 million and in respect of war liabilities arising from Bio-Chem etc, the limit is USD 30 million. For passenger and seaman risks the limit is USD 3 billion with a sub-limit of USD 2 billion for passenger claims only. P&I Circular 2011

4 Lay-up Returns Members are allowed up to 50% premium returns for vessels laid up in a safe port for more than thirty (30) consecutive days, if the vessel has only watchmen and no cargo onboard. Nor is return premium granted for vessels less than 500 GT, or for tugs, barges or passenger ships/ferries in coastal trade. Claim for lay-up returns should be made to the Association as soon as possible, however, and at the latest 12 months after expiry of the policy year. Sufficient information has to be supplied in order for the Association to calculate the return. A lay-up return application form is enclosed. Old years The current position of the open years as decided by the board in December 2011 is as follows: Year Status Estimated Supplementary Release Call Call 2009/2010 Open 0% 5% 2010/2011 Open 0% 10% 2011/2012 Open 0% 25% 2012/2013 Open 0% 25% Charterers Limited Liability Cover For 2012/13 the Association also offers a limited cover for Charterers including Charterers Liability to Hull. The overall maximum is limited, but may be arranged up to USD 500 million for any claim or occurrence. For further details, please contact each Team respectively. Special covers Further information of reinsurance, special covers, US trading et cetera will be provided prior to the. new Policy Year. Yours sincerely, The Swedish Club Lars Rhodin Enclosures: P&I Rule changes Procedures for payment of premium Lay-up return P&I Circular 2011

5 P&I 2531/2011 Enclosure 1 P&I Rule Changes Regel 2: Försäkringens grunder Föreningens ansvarighet framgår av dessa villkor såvida annat ej överenskommits mellan försäkringstagaren och Föreningen. Försäkringen omfattar ansvar, kostnader eller utgifter som åsamkats försäkringstagaren i hans egenskap av det försäkrade fartygets ägare, redare eller befraktare och som uppkommit på grund av en händelse under försäkringstiden som en direkt följd av fartygets drift. Ansvar, kostnader eller utgifter enligt Kapitel II ersätts av Föreningen endast i den utsträckning betalning härför först erlagts av försäkringstagaren, såvida Föreningen inte annorlunda bestämmer. Föreningens ansvarighet omfattar inte den självrisk som fastställts av Föreningen eller eljest överenskommits med försäkringstagaren. Föreningens ansvarighet skall inte överstiga det belopp vartill försäkringstagaren skulle ha ägt begränsa sitt ansvar i enlighet med tillämpliga rättsregler om begränsning av redaransvaret. Dessa villkor är underkastade Föreningens bolagsordning. Dessutom gäller i tillämpliga delar Allmän Svensk Sjöförsäkringsplan av år 2006 (SPL 2006) och svensk lag i frågor som inte reglerats i dessa villkor. Föreningen kan ändra dessa villkor under försäkringstiden för att undvika att Föreningen blir föremål för sanktioner, förbud eller skadliga åtgärder från någon stat eller internationell organisation. Change: Minor linguistic change of the Swedish version of the Rule

6 Rule 3: Liabilities in respect of persons Section 1 Injury, illness, repatriation and death crew Liability under the terms of a crew agreement or other contract of service or employment to pay damages or compensation for personal injury, illness or death of any member of the crew of the entered ship who is on board or proceeding to or from that ship. (b) Hospital, medical, repatriation, funeral or other expenses necessarily incurred in relation to any member of the crew who is on board or proceeding to or from that ship. (c) Travelling expenses in providing a substitute as a consequence of injury, illness or death of any member of the crew who is on board or proceeding to or from that ship. (d) Costs or expenses as specified under (b) above incurred for injury, illness or death of relatives of any member of the crew while on board the entered ship. (e) Costs for repatriation of the crew necessarily incurred in consequence of the actual or constructive total loss of the entered ship or a major casualty rendering the ship unseaworthy and necessitating the signing off of the crew. (f) Liability arising on grounds other than under (a) above to pay damages or compensation for personal injury, illness or death of any member of the crew of the entered ship who is on board or proceeding to or from that ship. Section 2 Wages - crew Sick wages during injury or illness (deleted) and wages as a consequence of death of a member of the crew of the entered ship. Wages payable to a member of the crew in consequence of the actual or constructive total loss of the entered ship or a major casualty rendering the ship unseaworthy and necessitating the signing off of the crew. Change: Linguistic change of the English version of the Rule bringing the language in line with the Swedish version of the Rule

7 Rule 4: Liabilities in respect of cargo Section 1 Cargo liabilities Liabilities, costs or expenses for loss, shortage, damage or other responsibility relating to cargo before, during or after the contracted transport by the entered ship. The cover afforded by the Association is limited to a period starting fourteen days before the commencement of the transport and ending fourteen days after its completion. For cargo which is the property of the Member, cover is provided by the Association to the same extent as if the cargo had been the property of a third party. For deck cargo, cover is afforded by the Association provided that the vessel, cargo and containers and similar articles of transport are suitable for deck carriage in all the circumstances and that the bill of lading, waybill or other document containing or evidencing the contract of carriage contains a valid liberty clause to carry such cargo on deck and either (a) states that the cargo is being so carried and excludes all liability for loss or damage to such cargo or; (b) makes the carriage subject to the Hague Rules or the Hague-Visby Rules. Where the value of any cargo is declared to be more than USD 2,500 by reference to a unit, piece, package or otherwise in the bill of lading, waybill or other document containing or evidencing the contract of carriage, and where the effect of such declaration is to deprive the Member of any right of limitation to which he would otherwise have been entitled then liabilities exceeding USD 2,500 in respect of any such unit, piece, or package are excluded from cover. the liability of the Association is limited to the amount per unit of such cargo which follows from regulations issued by the Association (deleted) Change: A clarification of the provision concerning ad valorem bills of lading making express reference to the limit of USD 2,500 per unit, piece and package. All IG Clubs have a similar provision.

8 Regel 4: Ansvar för last 1 Ansvar för last Ansvar, kostnader eller utgifter för förlust av, skada på eller andra skyldigheter hänförliga till last före, under eller efter den avtalade transporten med det försäkrade fartyget. Föreningens ansvarighet omfattar en tidsperiod av fjorton dagar före transportens början och fjorton dagar efter dess slut. Last tillhörig försäkringstagaren omfattas av Föreningens ansvarighet i samma utsträckning som om lasten tillhört annan. Däckslast omfattas av Föreningens ansvarighet såvida fartyget, lasten och containers eller liknande transportanordningar på alla sätt är lämpade för transport på däck och konossement, fraktsedel eller annan frakthandling ger tillåtelse till placering på däck och antingen (a) anger att lasten transporterats på däck och innehåller en friskrivning från ansvar för förlust av eller skada på sådan last eller; (b) gör Haagreglerna eller Haag-Visbyreglerna tillämpliga på transporten. Beträffande last vars värde angivits till mer än USD 2,500 per del, enhet, paket eller på annat sätt i konossement, fraktsedel eller annan frakthandling och där detta innebär att försäkringstagaren förlorar rätt till det belopp per (deleted) ansvarsbegränsning som annars skulle gällt är Föreningens ansvarighet begränsad till USD 2,500 per sådan del, enhet eller paket. enhet av sådan last som Föreningen kan föreskriva. (deleted)

9 Rule 8: Liabilities for costs Section 1 Sue and labour and legal costs Legal costs and other expenses reasonably (deleted) incurred by the Member to defend or protect himself against liability which is falling or is likely to fall under these Rules and for which insurance has been effected provided the cost or expense has been approved in advance by the Association or determined by the Association in its absolute discretion to have been reasonably incurred. Costs incurred after instructions from the Association. Section 2 Preventive costs and amounts saved Costs by the Member reasonably (deleted) incurred in order to prevent or limit liability covered by the Association under these Rules provided the cost has been approved in advance by the Association or determined by the Association in its absolute discretion to have been reasonably incurred. If such costs have been incurred jointly for the interest insured and for other interest, only such portion is compensated that falls on the interest insured. Where the Member, as a result of a casualty or event for which he is covered under these Rules, has obtained extra revenue, saved expenses or avoided liability, which would otherwise have been incurred and which would not have been covered by the Association, the Association may deduct from the compensation an amount corresponding to the benefit obtained. Change: The Rule has been slightly amended saying sue and labour costs, and similar costs, must either have been approved by the Club or decided by the Club to have been reasonably incurred. The new wording brings the Rule in line with the ones of other IG Clubs and it minimises the risk for disputes whether a cost has been reasonably incurred.

10 Regel 8: Ansvar för kostnader 1 Kostnader för utredning och försvar Kostnader för utredning och försvar samt andra utgifter som försäkringstagaren skäligen (deleted) ådragit sig för att undvika eller minska sådant ansvar som faller eller kan förväntas falla under dessa villkor och som omfattas av försäkringen förutsatt att Föreningen i förväg har godkänt kostnaden eller utgiften eller Föreningen efter eget gottfinnande finner kostnaden eller utgiften skäligen motiverad. Kostnader som försäkringstagaren ådragit sig efter åläggande från Föreningen. 2 Förebyggande och inbesparade kostnader Sådan skälig (deleted) kostnad som försäkringstagaren fått vidkännas för att avvända och begränsa fara som omfattas av Föreningens ansvarighet under dessa villkor förutsatt att Föreningen i förväg har godkänt kostnaden eller Föreningen efter eget gottfinnande finner kostnaden skäligen motiverad. Har kostnaden uppkommit gemensamt för det försäkrade intresset och annat intresse, ersätts endast den del som belöper på det försäkrade intresset. Har försäkringstagaren till följd av haveri eller annan händelse försäkrad under dessa villkor uppburit extra inkomster, inbesparat utgifter eller avvänt fara som eljest skulle ha uppstått och som ej omfattas av Föreningens ansvarighet, kan Föreningen göra avdrag från ersättningen med ett belopp mot-svarande den uppnådda fördelen.

11 Rule 11: Section 2 general exclusions The Association shall not be liable for (k) liabilities, costs or expenses arising out of the entered ship carrying contraband or being employed in blockade running or in an unlawful trade or in a trade which under the circumstances is imprudent, unsafe, unduly hazardous or improper. Change: The Rule has been expanded to exclude losses which have arisen because the member has engaged in unreasonable hazardous activities. One example of this could be the loading iron ore fines without following guidelines issued by IMO or any other relevant authority or expertise. The new wording brings the Rule in line with the ones of other IG Clubs.

12 Regel 11: 2 Uteslutna risker Från Föreningens ansvarighet undantages (k) ansvar, kostnader eller utgifter till följd av att det försäkrade fartyget transporterat kontraband, brutit blockad eller sysselsatts i olaglig verksamhet eller i verksamhet som beaktande de rådande omständigheterna var oförsiktig, farlig, oskäligt riskfylld eller olämplig.

13 Rule 22: Pemiums and deductibles Premiums and deductibles for the policy year to come are decided annually by the Association. The premium is due for payment in four two (deleted) equal instalments, half of the annual premium at inception (deleted) on 20 February, 20 May, and half of the premium on 20 (deleted) 20 August and 20 November. Should the period of insurance commence during the current policy year, a pro rata premium shall be paid at the time when the period of insurance begins, for the period until the next 20 August or 20 February whichever date comes first. Thereafter the premium shall be paid as stated in the second paragraph. Change: The Rule is amended to reflect that P&I premiums are paid in four instalments instead of two.

14 Regel 22: Premier och självrisker Föreningen fastställer de premier och självrisker som skall gälla för det kommande försäkringsåret. Premie är förfallen till betalning med en fjärdedel hälften (deleted) den 20 februari och hälften den (deleted) 20 maj, 20 augusti och 20 november. Börjar försäkringstiden under löpande försäkringsår, skall pro rata premie erläggas då försäkringen träder i kraft för tiden fram till närmaste förfallodag, varefter premien betalas som angivits i före-gående stycke.

15 P&I 2531/2011 Enclosure 2 Procedures for payment of premium Debit notes will be mailed to Members/Brokers one month prior to due date in order to provide ample time for arranging payment. To speed up the transfer of funds we recommend an electronic payment order. Crossborder payments should always be effected with relevant IBAN, our bank's name, address and SWIFT address (Bank-/BIC-Code) being HANDSESS to ensure an easy and quick settlement. The debit note reference number (i.e. invoice number) should always be stated on the payment order, enabling the Club s accounting department to quickly trace the payment. At renewals and risk attachments, debit notes for the first instalment might not have been received prior to due date. In such cases Members are requested to transfer the outstanding amount prior to receiving the debit note. In case premiums are not received by the Club on the due date, interest calculated at one per cent (1%) per month will be charged from the day after the due date. The interest will be debited per calendar quarters. Should premiums still be outstanding 30 days after the due date, the Club may issue a notice of cancellation to the Member and relevant Mortgagees.

16 P&I 2531/2011 Enclosure 3 Lay-up return Form for application of Lay-up returns A.1 Name of vessel: A.2 Arrival: Date: Time: A.3 Departure: Date: Time: A.4 Port or place: A.5 Exact location at arrival: B.1 Cargo: B.2 Crew: (Berth name number/anchor position/yard) At arrival: (Please tick a ) At departure: (Please tick a ) Loaded Ballasted Loaded Ballasted Full crew on board during the entire lay-up period. If not, please state number and changes: C.1 Purpose of Lay-up: (Please tick a ) Awaiting berth (proceed to D.1) Awaiting orders (proceed to D.1) Repairs/Yards (proceed to C.2) Other (Please state) (proceed to D.1) C.2 Purpose of repairs: (Please tick a where appropriate) Owners work Period: Claims repairs Period: D.1 Shifting/Mooring/Unmooring operations: (if none, state None and proceed to E.1) From To Date/Time Location Date/Time Location Remarks E.1 Other information Other relevant information attached to this form (please tick a and enclose such information) F.1 It is hereby confirmed that the vessel was always in a safe condition during the time for layup claimed. G.1 Authorized signature: (Date Authorized signature/stamp) This form has to be completed and returned latest 30 days after expiry of the Policy period. Please do not hesitate to contact the Club for further information. IF VESSEL TO BE LAID-UP PERMANENTLY DO NOT USE THIS FORM - CONTACT THE CLUB.