1. Professor Trine-Lise Wilhelmsen Scandinavian Institute of Maritime Law
The Nordic Marine Insurance Plan Why, how and what does the assured get?
Professor Trine-Lise Wilhelmsen
Scandinavian Institute of Maritime Law

3. Why? Background: The international picture
Several attempts at harmonization
No success
Why:
Fundamental differences in
Legal framework
Material contractual solutions
Contractual tradition
National contracts competitive advantage

4. Why? Nordic harmonization possible due to
Common Insurance Contract Act 1930
Common contractual traditions
National hull conditions, but based on the Norwegian Marine Insurance Plan
1964
1996
Competitive advantage limited
Maintenance of 4 national conditions costly

5. How? The Nordic Plan Agreement Basis NMIP 1996, version 2010
Follows the procedures from the Norwegian Plan system:
Agreed document
Secretariat Scandinavian Institute
Broad Commentaries
Systematic maintenance program

6. Advantages of the agreed approach: Flexibility

7. Foreseeability

8. Reasonableness

9. What does the assured get
A comprehensive and total product
Jurisdiction/choice of law
Scope of cover
Duties of disclosure and due care
The settlement
But: May be departed from

10. A comprehensive and total product

11. War Hull I 17 Coastal vessels 18 Offshore units 19 Builders Risks
Freight I
17 Coastal vessels
18 Offshore units
19 Builders Risks
xx Tailor made
H & M
LOH
Common provisions
War

12. Part I Chapters 1- 9: Common Provisions Part II Chapters : Hull 14 Hull and Freight Interest (TLO) 15 War Package 16 Loss of Hire Part III Chapters 17 – Coastal vessel 18 Offshore units 19 Builders Risks Plus Additional & tailor made covers

13. Jurisdiction/choice of law

14. Jurisdiction/choice of law
Nordic claims leader, 1-4 (1)
Legal proceedings before the courts in the venue where the claims leader is located
Based on the law of this venue
Non Nordic claims leader, 1-4 (2)
No regulation of jurisdiction
”agreed that Norwegian law shall apply”
The coinsurers may be sued at the venue of the claims leader, 1-4 (3)

15. Scope of cover

16. Perils insured against
Perils insured, the main distinction:
NP Cl 2-8: all risks
ITCH/IHC: named perils
The difference
New perils
Burden of proof
The result: More foreseeability for the assured in case of unknown risk

17. Incidence of loss The problem NP Cl. 2-11
Starting point: Peril has struck (1)
But:
Unknown defect (2)
Unknown damage (3)
Known defect/damage (4)

18. Causation The problem The alternatives
NP Cl. 2-13: General rule, Apportionment
Why:
Fair division of risk
Considerations of deterrence
Cl. 2-14; combination of war/marine peril

19. Losses covered, hull Starting point: Cl. 12-1; Cost of repair
But: Some additional cover for loss of time
Relevant for NP Clauses
12-7 Temporary repair
12-8 Costs to expediting repairs
12-11 Invitation to tender
12-12 Choice of repair yard

20. Why cover for loss of time?
The shipowner wants:
To minimize loss of time in order to get the ship back in employment
The insurer wants:
Cheapest possible repair which often takes more time
Compromise: The insurer is required to consider the assured’s interest in averting loss of time by paying up to 20 % of insurable value pa calculated for the time suffered or averted.

21. Losses covered, hull Lack of maintenance, wear and tear etc
NP Cl. 12-3:
The part not in proper condition is excluded
Any consequential damage covered
Full cover for total loss/liability
The reason: Consequential damage similar to a casualty
Unpredictable
Cover secure foreseeability

22. Losses covered, hull Error in material and design, 12-4
Consequential damage covered
But not the cost of rectifying the error
Coverage for primary damage if the part is classed
Why:
Similar to a casualty
Cover provides foreseeability

23. Duty of disclosure NP 3-1: All material facts shall be disclosed
NP 3-2/3-3:Fraud/negligence: void/no liability
Breach without fault, 3-4:
Covered,
but insurer may cancel
Why: Seems reasonable

24. Duty of due care, introduction
Main goal: To obtain safety at sea and avoid casualties
Legal techniques
Warranties
Alteration of risk
Safety regulations
Common: Warranty of classification
NP: Alteration of risk/safety regulation

25. Alteration of risk The regulation In particular applied to change of
The concept, NP Cl. 3-8 (1)
The sanctions, Cl. 3-9 to 3-11
In particular applied to change of
State of registration
manager/ technical/maritime operator
Classification society
UK: Warranties

26. Safety regulations

27. Safety regulations, concept
NP Cl. 3-22: A safety regulation is a rule
concerning measures for the prevention of loss
given by
Public authorities
The Classification society
The insurer
And is automatically included in the insurance contract

28. Safety regulations, breach
3-25: The insurer is freed from liability in case the assured breaches a safety regulation if
The assured has acted with negligence
There is causation between breach and casualty
The assured has the burden of proving no negligence

29. The settlement NP ch. 5 comprehensive regulation on Information, 5-1
Claims adjustment, 5-2
Interest on compensation, 5-4
Due date, 5-6
Subrogation, 5-13
Time limit and limitation, 5-23/5-24.
Etc

30. Settlement: Interest on compensation

31. Interest on compensation
NP 5-4 (1)
On claims: starting to run 1 month after notification sent to insurer
On expenses: from the date of the disbursement
Loss of time: 1 month after expiry of the insured period
Why: cover assured’s loss of profit while waiting for payment

32. Interest on compensation
NP 5-4 (2): Delay caused by the assured: no interest
NP 5-4 (3): CIBOR/NIBOR/STIBOR+ 2 %
NP 5-4 (4):
After due date interest extended with 2 %.
Due date = 6 weeks after the date when the claim adjustment is or should have been issued.

33. Claims leader (hovedassurandør)
NP chapter 9
The Norwegian concept ”claims leader”
Wide authority to act on behalf of the co insurers:
Approve lay up plan, 9-3
Notifications, 9-4
Salvage measures, 9-5
Removal and repairs, 9-6

34. Thank you for your attention!