The Nordic Marine Insurance Plan of 2013, Version 2019
Based on the Norwegian Marine Insurance Plan of 1996, Version 2010
The basis for the Nordic Marine Insurance Plan of 2013 is the Agreement of 3 November 2010 (amended 9 December 2016) between:
The Nordic Association of Marine Insurers (Cefor)
and
Danish Shipping (previously named the Danish Shipowners’ Association),
the Finnish Shipowners’ Association,
the Norwegian Shipowners’ Association, and
the Swedish Shipowners’ Association.
The Agreement states that the name of this document shall be “The Nordic Marine Insurance Plan of 2013” with the following subtitle; “based on the Norwegian Marine Insurance Plan of 1996, Version 2010” (hereinafter “the Plan”).
The Agreement established a permanent Standing Revision Committee (SRC) for the purpose of drafting the Plan. The Parties to the Agreement may propose changes to the Plan. If the members agree that changes should be made, the SRC shall draft amendments to the Plan text and Commentary in English.
The following members of the SRC have been working on the 2019 Version of the Plan:
Chair
Trine-Lise Wilhelmsen, Professor, LL.D, Director of Scandinavian Institute of Maritime Law
Secretary
Marie Meling, Doctoral Research Fellow, Scandinavian Institute of Maritime Law
The Nordic Association of Marine Insurers (Cefor)
Sveinung Måkestad, Vice President, Gard
Roar Sanden, Lawyer & Director Adjusting, Norwegian Hull Club
Hanne Rydelsborg, Senior Claims Handler, Codan Marine
Ronny Hindersson, Claims Manager, Alandia Marine, Alandia Insurance Ltd.
Johan Kahlmeter, Area Manager, Team Gothenburg, The Swedish Club
Anders Hovelsrud, Insurance Director, Den Norske Krigsforsikring for Skib
Einar Sandbakken, Claims Director, Master Mariner H&M, Skuld Marine Agency
Nicolas Wilmot, Special Advisor, Gard (attending deputy)
Jan-Hugo Marthinsen, Vice President, Gard (Chapter 18 amendments)
Viggo Thomas Kristensen, Legal Counsel, Cefor (split of Chapter 17)
Nordic Shipowners’ Associations
Karoline Bøhler, Attorney-at-Law, Insurance and CSR Manager, Norwegian Shipowners’ Association
Marthe Romskoug, General Manager, Wilhelmsen Insurance Services AS
Hogne Nesse, Head of Marine Insurance & Claims, Höegh Autoliners AS
Örjan Karlsson, Manager Marine Insurance, Stena Rederi AB
Claes Westman, Head of Marine Insurance, A.P. Møller-Maersk A/S
Kim Chalmer Rasmussen, Insurance Manager, DFDS A/S
Olli Kytö, Attorney-at-Law, Sea Invest Ltd.
Anne Mentz Hansen, Senior Claims Manager, Torm A/S (attending deputy)
Frode Berg, Claims Director, Marine & Marine Offshore, Willis Towers Watson AS (Chapter 18 amendments)
Nordic Average Adjusters
Bjørn Slaatten, Average Adjuster
The SRC decided that amendments to the text of the Plan and the Commentary in relation to the Nordic Marine Insurance Plan of 2013, Version 2016 should be shown in the text and highlighted in the preface.
The SRC has adopted the following amendments for incorporation into the Plan Version 2019:
- Clause 1-4A: The existing Cl. 1-4 is renumbered Cl. 1-4A in consequence of the introduction of a new Cl. 1-4B. In addition, subclause 2 of the existing Cl. 1-4 is amended. The previous sub-clause 2 stated that the default choice of law for insurance contracts with a non-Nordic claims leader was Norwegian, but had no default regulation of jurisdiction for such insurance contracts. The amended sub-clause 2 states that disputes in such cases are referred to arbitration according to Cl. 1-4B, where the place of arbitration and background law for the non-Nordic claims leader is regulated in sub-clause 4.The reason for the amendment is given in the commentary to this Clause (see below). In connection with this amendment, the cross-references in Cl. 14-3 and Cl. 18-41 and in the Commentary’s General introduction to Ch. 9 and the commentary to Cl. 9-4 are also updated.
- Clause 1-4B: This new Clause is introduced as an optional arbitration clause for insurance contracts with Nordic claims leader and as the default jurisdiction clause for insurance contracts with non-Nordic claims leaders. The reasons for including an arbitration clause in the Plan are twofold. The first reason is that several insurers today refer to arbitration as their main dispute resolution solution, and it is therefore convenient to have a standard clause in the Plan that the parties can include. The second reason concerns uncertainty of the regulation on court jurisdiction and recognition and enforcement of judgments after Brexit.
- Clause 1-5: Sub-clause 3 is amended in consequence of the amendments in Cl. 16-1 and Cl. 16-4.
- Clause 2-3: Sub-clause 2 is amended to not merely take into account market fluctuations, but to require a “change in the circumstances which formed the basis parties’ agreement of the insurable value” in order for either party to have the right to require a change in the agreed insurable value. The amendment is made in order to reflect that if the agreed insurable value was mainly based on the contractual arrangements for the vessel or on the basis of outstanding loan arrangements with a bank, market fluctuation might not be relevant.
- Clause 2-8: Letter (b) is rewritten and split into two letters (b) and (c) whereas the existing letters (c) and (d) are renumbered. Letter (b) now deals with interventions of own State power “provided any such intervention is made for the furtherance of an overriding national political objective”. The provision is amended partly to extend the cover for such interventions and partly to clarify contradictions in the Commentary on the marine insurer’s liability for such interventions. Letter (c) now excludes “requisition by State power”. The reason for this is that with the narrower provision in the new letter (b) it is necessary to make a separate clause for requisition to emphasize that requisition by State power is excluded regardless of the motive for the requisition. Expropriation, on the other hand, is now explicitly dealt with under letter (b). As a consequence of these amendments the Commentary to this Clause is also completely rewritten and now also includes a description of the distinction between requisition, expropriation and confiscation.
- Clause 2-8: Letter (d) is renumbered and replaces the old letter (c). In addition, the wording is amended from “insolvency” to “insolvency or lack of liquidity of the assured or the operation of ordinary legal process to enforce payment of any fine, penalty, debt or right to security unrelated to a claim or liability covered by the insurance”. The amendment is made to bring the text closer to the original Norwegian term “manglende betalingsevne” literally “lacking the ability to pay”. Consequently, insolvency in this Clause (and in Cl. 2-9) means inability to pay regardless of the cause of the insolvency or whether it is temporary or permanent. In addition, as the scope of exclusion for intervention by State power in Cl. 2-8, letter (b) is restricted after this revision, the words “or the operation of ordinary legal process to enforce payment of any fine, penalty, debt or right to security unrelated to any claim or liability covered by the insurance” are added in (d) to clarify that such interventions are still not covered by insurance. These amendments are also further explained in the Commentary.
- Clause 2-9: The amendments to sub-clause 1, letter (b) and sub-clause 2 letters (a) and (c) are closely tied to the amendment of Cl. 2-8. The purpose of the amendments is to clarify the distinction between the marine risk insurance and the war risks insurance for such interventions,to clarify several of the concepts used in letter (b), and to adjust the war risks cover to the criteria established in the Sira case. Similar to the revision of Cl. 2-8, letter (b) is divided so that expropriation is added to sub-clause 1, letter (b) whilst requisition is addressed in a separate sub-clause, cf. sub-clause 2, letter (c). In consequence of these amendments the commentary to this Clause is also completely rewritten. The wording in sub-clause 2, letter (a) is, as the wording of Cl. 2-8, letter (d), amended from “insolvency” to “insolvency or lack of liquidity of the assured or the operation of ordinary legal process to enforce payment of any fine, penalty, debt or right to security unrelated to a claim or liability covered by the insurance”.
- Clause 4-5: The heading is editorially amended. In addition, sub-clause 1 is rewritten. In sub-clause 2, the term “expenses” is replaced with “costs” and a new sub-clause 3 has been added. The purpose of these amendments is to clarify the scope of cover for costs incurred in order to establish whether any recoverable loss has occurred after a casualty. The Commentary is rewritten for the same purpose.
- Clause 4-10: The Clause is amended to clarify that the assured always has the right to claim under the policy in respect of any physical damage to the vessel including sacrificial damage, and settle this concurrently with the particular average damage, thus not having to wait for a general average adjustment which often may take a long time to finalize.
- Clause 5-4: Sub-clause 3 is amended with inclusion of a minimum interest rate of 2 percentage points independent of whether CIBOR, NIBOR or STIBOR is negative. In addition, the use of “%” is amended to “percentage points” throughout the Clause in line with the practice in comparable documents. Corresponding amendments and clarifications are made in the Commentary where it is also explained, in relation to sub-clause 4, that the rate for overdue payments as a minimum will be 4 percentage points.
- Clause 5-23: The previous reference in sub-clause 1 to “the master or the chief engineer of the ship” is deleted as it was considered inappropriate to apply such a wide identification. Consequently, the general identification rule in Cl. 3-36 to Cl. 3-38 apply also for notification of a casualty, and only the knowledge of the assured and those with whom he can be identified is relevant.
- Clause 10-2: The Clause is amended to provide a broader cover for objects temporarily removed to be repaired. The wording in the first sentence is amended and a new second sentence is introduced setting out the scope of cover for objects being repaired.
- Clause 15-11: In connection with the amendments made in Cl. 2-8 and Cl. 2-9 regarding cover for State intervention, the time-limit in subclauses 1 and 2, which sets out when the assured can claim total loss, is reduced from twelve to six months. The same amendment is made to Cl. 18-69.
- Clause 16-1: Sub-clauses 3 and 4 are new. Sub-clause 3 is an editorial amendment and is moved from Cl. 16-4, sub-clause 2, without any change of wording as the sub-clause was found to fit better in this Clause. The reinstatement clause in sub-clause 4 is new in this Version and automatically re-instates the policy to the original limit in case of a casualty during the policy period. In addition, the Commentary is updated to elaborate further on the understanding of the term “loss of time” and the relationship between this Clause and Cl. 16-11.
- Clause 16-4: Sub-clause 2 is moved to Cl. 16-1 and thus deleted from this Clause. In connection with this amendment, the cross-references in Cl. 15-3 and Cl. 16-7 are also updated.
- Chapter 17: Chapter 17 is re-edited and is now split into three separate chapters. The “new” Chapter 17 only contains the rules relating to insurance of fishing vessels. The rules for other types of vessels with limited trading areas are singled out in a new Chapter 20. The same goes for the liability insurance, which is singled out as a standalone cover in a new Chapter 21. The purpose of this split is to make the regulation better suited for each category of insured activity and easier to use.
- Clause 18-2: The word “supplies” is replaced with “provisions” in letter (a), sub-clause 2, in order to bring the wording in line with Cl. 10-1.
- Clause 18-31: This Clause is editorially amended. The words “the two classes [of work]” are replaced with “each category [of work]”. In addition, the commentary to this Clause is rewritten.
- Clause 18-32: The wording in sub-clause 1 is editorially amended in order to bring the wording in line with Cl. 12-15.
- Clause 18-43: Sub-clauses 3 and 4 are new. Sub-clause 3 is an editorial amendment and is moved from Cl. 18-46, sub-clause 2, without any change of wording as the sub-clause was found to fit better in this Clause. The reinstatement Clause in sub-clause 4 is new in this Version and automatically re-instates the policy to the original limit in case of a casualty during the policy period. The amendments are verbatim the same as those made to Cl. 16-1 and Cl. 16-4 (see above).
- Clause 18-46: Sub-clause 2 is moved to Cl. 18-43 and thus deleted from this Clause. In connection with this amendment, the cross-references in Cl. 18-49 and Cl. 18-61 are also updated.
- Clause 18-69: In connection with the amendments made in Cl. 2-8 and Cl. 2-9 regarding cover for State intervention, the time-limit in sub-clauses 1 and 2, which sets out when the assured can claim total loss, is reduced from twelve to six months. The same amendment is made to Cl. 15-11.
- Clause 18-90: The Clause is amended to better harmonise the condemnation formula in this Clause with that found in Cl. 18-10. The amendments made to sub-clause 2 give the assured an alternative option to claim for total loss compensation if costs of repairs amount to more than 80 % of the sum insured. This secures a seamless transfer from the construction risk insurance to the operations insurance under Section 2.
- The Appendix to Cl. 3-15: Trading areas II (Conditional trading areas), 3. Gulf of St. Lawrence and St. Lawrence River (Map No. 3): The map and the wording in the Appendix have been improved with the inclusion of map coordinates.
- The Appendix to Cl. 3-15: Trading areas II (Conditional trading areas), 4. St. Lawrence Seaway and the North American Great Lakes (Map No. 3): The map and the wording in the Appendix have been improved with the inclusion of map coordinates.
- The Appendix to Cl. 3-15: Trading areas II (Conditional trading areas), 5. East-Asian waters (Map No. 4): The map and the wording in the Appendix is amended by moving the great circle line to 10 nautical miles from land and by including map coordinates.
- The reference to “the 1994 York-Antwerp Rules” is amended to “the 2016 York-Antwerp Rules” throughout the text and the Commentary in order to implement the application of the 2016 York-Antwerp Rules. This amendment is made in clauses 4-8, 4-11, 16-1 and 18-43.
- Editorial amendments are made by deleting or correcting outdated/incorrect cross-references and aligning language with the rest of the Plan text and the Commentary. Such amendments are made in Cl. 15-15 (deletion of an incorrect reference to “requisition”) in the Plan text and in Cl. 12-3 (deletion of references to Cl. 12-5 (f)), Cl. 19-11 (corrected the cross-reference to Cl. 4-1 (not Cl. 1-4)) and Cl. 18-2 (reference to sub-clause 1 (c) (not 2 (c)) in the Commentary.
Throughout the Plan text the term “ship” has been replaced with “vessel” so that the Plan text now generally uses the term “vessel”. In the Commentary, the terms “ship” and “vessel” are still used interchangeably. In addition, certain purely corrective amendments have been made of previous typing and formatting errors both in the Plan text and the Commentary
In connection with the above-mentioned amendments, changes have also been made in the Commentary to the respective clauses. Changes have similarly been made in the Commentary to other clauses in which matters regulated in the amended clauses are mentioned. Furthermore, changes have been made in several places in the Commentary to clauses that have not been amended, and where the SRC has found that the former Commentary was impractical, misleading or could be misunderstood. This applies to the following provisions:
- Clause 2-11: A paragraph in the Commentary is rewritten in order to make it clear that Cl. 2-11 is applicable for loss of hire insurance in accordance with Ch. 16 even though the hull insurance has been taken out on non-Plan conditions.
- Clause 3-21: The Commentary is amended to clarify that mergers and demergers are based on the principle of continuity and should not be seen as change of ownership. Thus, such transactions will not lead to automatic termination of the insurance.
- Clause 4-8: The Commentary is amended in order to improve the earlier translation of the Norwegian sentence “Her må man falle tilbake på regelen om forskudd i 5-7”. In addition, the references to the York-Antwerp Rules have been updated to refer to the 2016 version (see above) and the previous references to the Funding Agreement linked to Lloyd’s Open Form 1995 are, in accordance with market practice, updated to refer to the SCOPIC Clause linked to Lloyd's Open Form.
- Clause 4-12: The previous references in the Commentary to the Funding Agreement linked to Lloyd’s Open Form 1995 are, in accordance with market practice, updated to refer to the SCOPIC Clause linked to Lloyd's Open Form.
- Clause 5-16: The Commentary is updated to reflect the amendments made to Cl. 4-10 and to clarify that as long as the claim for general average falls within the general average absorption amount agreed in the policy, the assured has as a starting point no liability towards the insurer if he does not succeed in securing the insurer a right of recourse.
- Clause 5-24: The commentary to sub-clause 3 is updated to clarify that a written notification from the insurer stating that limitation will be invoked will not reduce or in any way limit the three-year time-bar limit set out in sub-clause 1.
- Clause 7-4: The commentary to sub-clause 2 is amended to clarify that the application of the 5% limit as a starting point is made for each individual interest, but that other provisions apply for certain interests such as loss of hire insurance and liability insurance.
- Clause 12-5 (a): The sentence “However, the insurer shall not cover maintenance and wages of the crew in connection with the necessary cleaning of tanks prior to the repairs” is deleted and the last paragraph of the commentary to Cl. 12-5 (a) is editorially amended.
- Clause 12-13: The sentence “Here as elsewhere, the Plan is based on the rules of apportionment that have established themselves in practice” is deleted in the Commentary.
- Clause 16-11: The Commentary is amended to clarify the insurance cover where an assured is able to engage a substitute vessel during repairs of a damaged vessel, in order to maintain earnings under the damaged vessel’s trade/charterparty. The Commentary is further amended to clarify that allowance in certain situations can be made for extra tug costs under the terms of this Clause.
- Clause 16-14: The Commentary is amended to clarify the rationale for the shipowner to postpone repairs and that the agreed daily amount shall apply for vessels having been continuously off-hire from before expiry of the policy period, even if the actual stay at a repair yard does not commence until after expiry. In addition, the dates used in the examples are updated.
When the amendments in the Commentary were made, the explanation of the historical development of the clauses previously contained in the Commentary was also deleted to facilitate the reading and understanding of the Commentary.
However, for clauses where no amendments are made in the Commentary, this historical development is not deleted. In the Commentaries to these Clauses, references are made to both the Plan in use before the 1996 Plan, the Norwegian Marine Insurance Plan of 1964 (the 1964 Plan), and various insurance conditions and practices. The insurance conditions referred to are the Conditions for Hull Insurance issued by the Central Union of Marine Underwriters (Cefor) and the Mutual Marine Insurers Committee’s Premium and Insurance Conditions (PIC). The abbreviation Cefor stands for Cefor Form 246 A October 1995, while PIC means the Mutual Marine Insurers Committee’s Premium and Insurance Conditions 1 January 1995.
The language of the Plan and Commentary is English. The Plan will be translated into four of the Nordic languages.
The Plan Version 2019 enters formally into force on 1 January 2019. The amendments are marked in both the printed and web versions of the Plan. Cefor is the copyright holder and responsible for the printing of the Plan and the publication of the web edition of the Plan and Commentary. The Internet address is www.nordicplan.org. The Plan is also available as an App for smartphones and tablets.
Finally, the Standing Revision Committee wishes to state that the Plan is a set of standard policy conditions and thus purely illustrative. The Plan is not binding to the parties of this agreement. Parties negotiating an insurance contract are completely free to agree upon other insurance conditions or modify any part of the Plan and its clauses.
Oslo, 14 September 2018
Trine-Lise Wilhelmsen, Chair
Marie Meling, Secretary
Cefor - The Nordic Association of Marine Insurers