Circular 1/95: Oil Pollution Risks in the US - Additional Premium System - 1995 Policy Year

TO THE MEMBERS
Dear Sirs,
OIL POLLUTION RISKS IN THE UNITED STATES - ADDITIONAL PREMIUM SYSTEM
1995 POLICY YEAR

 


For the 1995 policy year there is a small reduction in the additional premium charged by the Association. Otherwise the terms are unchanged from those applying for 1994, and are set out in the following U.S. Oil Pollution Clause 20.2.95. This clause will be incorporated in the certificates of entry or endorsement slips for the ships concerned.


Yours faithfully,
THOS R. MILLER & SON (BERMUDA)

 

U.S. Oil Pollution Clause 20.2.95
It is hereby agreed that for the 1995 policy year this entry includes cover in accordance with the Association's Rules for oil pollution claims arising out of any incident to which the United States Oil Pollution Act 1990 is applicable, on the terms and conditions set out below and subject to the limits of liability provided in Rule 5(B).


For the purposes of this Clause,
"U.S. voyage" is any cargo voyage involving loading or discharging persistent oil as cargo at any port or place in the United States of America or within the Exclusive Economic Zone of the United States of America as defined in the United States Oil Pollution Act, 1990;
"Persistent oil" is all persistent hydro-carbon mineral oils other than those falling within the definition of "non-persistent oil" set out below.


"Non-persistent oil" is oil which consists of hydro-carbon fractions:
a. at least 50% of which, by volume, distils at a temperature of 340 degrees C and
b. at least 95% of which distils at a temperature of 370 degrees C when tested by the ASTM Method D 86/78 or any subsequent revision thereof.


1. The Owner shall make a declaration quarterly in arrears at the end of each quarter ending 20th May, 20th August, 20th November, 20th February, as soon as practicable and in no event later than two calendar months after the end of each quarter, stating, as appropriate,
either


i. that the ship has not performed a cargo voyage involving loading or discharging cargo at any port or place in the United States of America or within the Exclusive Economic Zone of the United States of America during the relevant quarter
or
ii. that the ship has performed one or more such voyages during the relevant period and, in that event, the number of such voyages, the nature of the cargo(es), the port(s) or place(s) of loading, discharging or transfer and the date(s) of such loading, discharging or transfer.
2. The Owner shall be liable to pay and shall pay a fixed additional premium calculated as follows:
(A)  For tankers of more than 3,000 gross tons,
 U.S.$0.27 per entered ton, each U.S. voyage,
or  U.S.$0.135 per entered ton, each U.S. voyage in respect of cargoes exclusively loaded or discharged at LOOP or cargoes exclusively transferred to or from another ship at a place (other than a port) approved by the United States Coast Guard within the Exclusive Economic Zone of the United States of America.


Provided always that the maximum number of voyages in any one policy year in respect of which an additional premium is payable shall be twenty voyages, irrespective of the number of U.S. voyages actually performed.


(B)  For tankers of 3,000 gross tons or less,
Either  a fixed rate of U.S.$810 each U.S. voyage, provided always that the maximum number of voyages in any one policy year in respect of which an additional premium is payable shall be twenty voyages, irrespective of the number of U.S. voyages actually performed,
or  a fixed rate of U.S.$ 16,200 per annum.


(C)  For tankers which are constructed or adapted primarily to carry cargoes of noxious liquid substances in bulk and which are capable of carrying at least ten grades of cargo simultaneously, and where the quantity of persistent oil carried as cargo on each U.S. voyage is 5,000 metric tons or less,
Either  a fixed rate of $810 each U.S. voyage, provided always that the maximum number of voyages in any one policy year in respect of which an additional premium is payable shall be twenty voyages, irrespective of the number of U.S. voyages actually performed,
or  a fixed rate of $16,200 per annum.


If more than 5,000 metric tons of persistent oil are carried as cargo, the additional premium shall be calculated in accordance with paragraph (A) above.


3. The Owner shall pay such additional premium on or before the date specified in the debit note issued by the Managers in accordance with the declarations made under paragraph (1) above.
4. In the event that the Owner fails for any reason to make a declaration (whether or not any U.S. voyage has been performed) within two calendar months of the quarter dates specified in paragraph (1) above, the terms of entry in respect of all tankers entered in the Association by him or on his behalf shall be amended with effect from the expiry of the said period of two months to incorporate the following exclusion:
"Excluding any and all claims in respect ofoil pollution arising out of any incident to which the United States Oil Pollution Act 1990 is applicable"
and the Owner shall remain liable to pay any additional premium in respect of any U.S. voyage performed prior to the incorporation of the above exclusion in the terms of entry.
5. In the event that any declaration made by the Owner or on his behalf pursuant to paragraph (1) above is in any material respect inaccurate, the insurance of the Owner in respect of any and all ships entered in the Association by him or on his behalf shall cease with effect from the date of the inaccurate declaration, and Rule 28(B) shall apply.


Provided always that the Directors may in their discretion and upon such terms as they think fit either
i. reinstate the entry of any or all ofthe ships for which the insurance has ceased pursuant to this paragraph (5), or
ii. admit in whole or in part any claim in respect of any ship entered by the Owner for which the Association is under no liability by reason of the cessation of the insurance in accordance with this paragraph (5).
6. In the event that the Owner fails to pay either in whole or in part any additional premium in accordance with paragraph (3) above, the provisions of Rule 31 shall apply.


7. The additional fixed premium payable in accordance with paragraph (3) above shall be deemed to be a fixed premium within the terms of Rule 9(A) and, save as otherwise provided in this clause, the Rules of the Association shall apply in all respects accordingly.

 

This system was created to fund the Association's share of the special contributions to the International Group's pooling and reinsurance arrangements that reflect the increased oil pollution risk presented by tankers carrying persistent oil as cargo in United States waters.

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