Circular 24/13: Revised Terms of Entry 2014


OUTLINE

  • The ‘US Oil Pollution Clause’ is deleted reflecting the reduction of US voyage additional premiums to nil; 
  • A ‘Nickel Ore Clause’ will incorporate the previously advised requirement of mandatory notification of loading nickel ore from Indonesian or Philippine ports; 
  • Clauses for charging Group reinsurance costs appropriate for carriage of persistent oil and of other cargoes have been revised to clarify their application to tankers and OBO vessels; 
  • This circular refers to previous circulars 8/12 and 4/13

TO THE MEMBERS

Dear Sirs

REVISED TERMS OF ENTRY FOR 2014 POLICY YEAR:
1) US OIL POLLUTION SURCHARGE - DELETION OF US OIL POLLUTION CLAUSE
2) DANGERS OF CARRYING NICKEL ORE FROM INDONESIA AND THE PHILIPPINES
– MANDATORY NOTIFICATION REQUIREMENTS
3) REVISED WORDING FOR TANKER & OBO CLAUSES

Members are advised the following changes to clauses relating to the terms of entry of relevant ships will be introduced for the 2014 Policy Year.

US Oil Pollution Surcharge 2014 - Deletion of “U.S. Oil Pollution Clause”
Reflecting the continuing improvement in the tanker record, the Group has followed the policy over recent years of reducing the voyage surcharge rate with the eventual aim of reducing the surcharge to nil in the absence of any intervening major incidents. This policy has resulted in a year on year reduction in the amount of premium collected through the surcharge and for 2014 the Group has decided to reduce the surcharge to nil.

In light of this change there will no longer be a requirement for US voyage declarations after 20th February 2014. The U.S. Oil Pollution Clause will not be needed and will be deleted from the Rule Book - Addendum for Owners.

Addition of “Nickel Ore Clause”
The Nickel Ore Clause reflects measures agreed with the IG Clubs and formalises advice given by the Club in Circular ref. 8/12, ie. mandatory notification to the Club if the Member intends to load nickel ore from Indonesian or Philippine ports.

The Nickel Ore Clause (see Appendix A) will be included in the Association’s Rule Book - Addendum for Owners and Addendum for Charterers.

Revision of “Tanker and OBO clauses”
Last year, the system for charging International Group reinsurance costs applicable to tankers and OBOs (or combination carriers) which switch during a year between carrying persistent oil cargo “dirty”) and not carrying persistent oil cargo (“clean”) was changed for all International Group Clubs. The change resulted in reinsurance cost savings for Members whose ships are not carrying persistent oil or its residues (other than slops), allowing returns of premiums if the ship is “clean” for a period of 30 or more days.

Four clauses, which were introduced to incorporate the change, were published in Circular ref. 4/13. Those clauses after a year of usage have been further clarified and refined for the benefit of Members who use them.

Under the revised clauses, if a ship is not carrying “dirty” cargoes for one or more periods each of at least 30 consecutive days, it can be rated as a “clean” tanker for the periods of “clean” trading. If such a “clean” trading period lasts less than 30 consecutive days, then the ship will continue to be rated as a “dirty” tanker for the period. “Clean” means being actually clean, i.e. the ship is not carrying “dirty” cargoes and it can include a period in ballast between “dirty” voyages, as long as such period without “dirty” cargoes or its residues is 30 consecutive days or more. The same principles apply to OBOs.

The four clauses (see Appendix B) will be included in the Association’s Rule Book - Addendum for
Owners.


Yours faithfully

THE MANAGERS

CONTACT

• Members requiring further information should refer to their usual underwriting contact

Appendix A – Nickel Ore Clause

Nickel Ore Clause
It is a condition of this insurance that a Member who intends to load any nickel ore cargoes from ports in Indonesia or the Philippines must provide advance notice to the Managers as early as possible before loading.

Such notice shall be in writing to the Managers and shall include the following information where possible:
- ship name
- port/anchorage of loading and estimated time of arrival
- date of intended loading
- charterer/shipper’s details
- agent's details
- a copy of the shipper's cargo declaration and supporting certificates

The Managers may, at their discretion, require that a survey of the cargo be conducted on behalf of the Member to determine the condition of such cargo before loading is allowed to commence which survey may be continued into loading operations.

Unless the Association in its sole discretion otherwise determines, there shall be no recovery from the Association in respect of liabilities, losses, costs or expenses to the extent that such liabilities, losses, costs or expenses result from events relating directly or indirectly to the condition of the cargo where the above specified written notice has not been provided in advance of the loading of the cargo.


Appendix B - Tanker and OBO clauses

Tanker - entered on the basis of carrying cargoes of persistent oil
1. It is hereby agreed that the ship will carry persistent oil as cargo during the policy year. Notwithstanding the foregoing, any ship insured hereunder that is not carrying persistent oil or its residues (other than slops) for a period of thirty or more consecutive days (such period(s) being computed from the day on which the ship is not carrying persistent oil or its residues (other than slops) until the day the next persistent oil cargo is loaded, one day only being excluded) shall be entitled to receive a return of Mutual Premium for such period(s) upon application to the Managers. No such return shall be made by the Association unless the Managers receive written notification within three months of the end of the policy year in which the returns are claimed.

2. For the purposes of this clause, “Persistent Oil” is any hydro-carbon mineral oil other than 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.

Tanker – entered on the basis of carrying cargoes other than persistent oil
1. It is hereby agreed that the ship will carry cargoes other than persistent oil during the policy year. Notwithstanding the foregoing, any ship insured hereunder that carries persistent oil as cargo at any time during the policy year shall be held covered, provided the carriage of such cargo is promptly declared to the Managers and an additional Mutual Premium as specified by the Managers is paid for the period.

2. If the Owner fails to notify the Managers in accordance with paragraph (1) above, the Owner shall cease to be insured by the Association in respect of this ship with effect from the date of the commencement of loading persistent oil as cargo (the date of cessation). The terms of Rule 28(b) shall apply. Provided always that the Directors may in their discretion and upon such terms as they think fit reinstate the entry of the ship or admit in whole or in part any claim in respect of the ship for which the Association is not liable by virtue of the insurance having ceased in accordance with this paragraph (2).

3. For the purposes of this clause, “Persistent Oil” is any hydro-carbon mineral oil other than 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.

OBO - entered on the basis of carrying cargoes of persistent oil
1. It is hereby agreed that the ship will carry persistent oil as cargo during the policy year. Notwithstanding the foregoing, any ship insured hereunder that carries dry cargoes and/or wet cargoes other than persistent oil or its residues for a period of thirty or more consecutive days, (such period(s) being computed from the day on which the ship is not carrying persistent oil or its residues(other than slops) until the day the next persistent oil cargo is loaded, one day only being excluded)shall be entitled to receive a return of Mutual Premium for such period upon application to the Managers. No such return shall be made by the Association unless the Managers receive written notification within three months of the end of the policy year in which the returns are claimed.

2. For the purposes of this clause, “Persistent Oil” is any hydro-carbon mineral oil other than 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.

OBO – entered on the basis of carrying cargoes other than persistent oil
1. It is hereby agreed that the ship will carry carries dry cargoes and/or wet cargoes other than persistent oil or its residues during the policy year. Notwithstanding the foregoing, any ship insured hereunder that carries persistent oil as cargo at any time during the policy year shall be held covered, provided the carriage of such cargo is promptly declared to the Managers and an additional Mutual Premium as specified by the Managers is paid for the period.

2. If the Owner fails to notify the Managers in accordance with paragraph (1) above, the Owner shall cease to be insured by the Association in respect of this ship with effect from the date of the commencement of loading persistent oil as cargo (the date of cessation). The terms of Rule 28(b) shall apply. Provided always that the Directors may in their discretion and upon such terms as they think fit reinstate the entry of the ship or admit in whole or in part any claim in respect of the ship for which the Association is not liable by virtue of the insurance having ceased in accordance with this paragraph (2).

3. For the purposes of this clause, “Persistent Oil” is any hydro-carbon mineral oil other than 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

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