Dear Erik -
reference is made to your e-mail, with attachments, dated 14th February.
I am sorry that IUMI cannot participate in your today's meeting in Brussels
- some comments on your papers, however, herebelow:
General
IUMI comments on the war and terrorism issues mainly as marine property
insurer, i.e. IUMI consists mainly of local marine insurance associations
who represent insurers of hull and machinery and of the cargo on board
(which can be neglected in the case of passenger vessels).
Some IUMI members, however, will grant cover for both, hull and machinery
and P&I risks.
We, therefore, agree to Lloyd Watkins's comments entitled 'Athens
Convention' as far as the liability issue is concerned, in particular also
what he says regarding the short term notice of cancellation and the
geographical limits
91/4/A
Footnote 1:
hull war insurance is provided by the commercial markets, normally
together and up to the sum insured for hull and machinery.
War risks on a stand alone basis are also covered by specialized war
risk insurers - some of them will limit their cover to local FOM (Flag,
Ownership, Management).
Footnote 1, therefore, ought to be adjusted taking into account the
above.
Claims
the US$ 400 million sub-limit emanated from the thought that this limit
would be more palatable for the ones who offer capacity.
Therefore, this sub-limit is put in for market capacity reasons.
Market capacity, however, adds up from several sub-marine lines of business
and the question would be whether marine property is included in the above
limit.
In all likelihood that is not the case - but this ought to be specified
to make it clear to all concerned that the market loss out of a total loss
could consist in the mentioned sub-limit of US$ 400 million plus marine
property which could amount to another, say, US$ 600 million, i.e. a
total of US$ 1.000 million.
It should also be remembered that out of the concept of sue and labour
the property limit could be substantially exceeded.
Best regards
Fritz Stabinger
IUMI
International Union of Marine Insurance
C.F. Meyer-Strasse 14
POB 4288
CH-8022 Zurich
phone: +41 44 208 28 70
mailto: Fritz.Stabinger@svv.ch
www.iumi.com