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Without prejudice to the generality of these Rules:

33.1

An Insured Owner shall cease to be insured by the Association in respect of any and all ships entered by him or on his behalf upon the occurring of any of the following events or circumstances:

33.1.1

Where the Insured Owner is an individual,

33.1.1.1

upon his death, or

33.1.1.2

If a receiving order is made against him, or he makes any composition or arrangement with his creditors generally in order to avoid or prevent the making of such receiving order, or

33.1.1.3

If he becomes bankrupt, or

33.1.1.4

If he becomes incapable by reason of mental disorder of managing or administering his property and affairs

33.1.2

Where the Insured Owner is a corporation,

33.1.2.1

Upon the passing of any resolution for its voluntary winding-up (other than voluntary winding-up for the purposes of company or group reorganisation), or

33.1.2.2

Upon an order being made for its compulsory winding-up or an administration order being made, or

33.1.2.3

Upon its dissolution, or

33.1.2.4

Upon a receiver, or an administrative receiver or manager being appointed of all or part of its business or undertaking, or

33.1.2.5

Upon possession being taken of any of its property by or on behalf of a secured party, or

33.1.2.6

Upon its commencing proceedings under any bankruptcy or insolvency laws to seek protection from its creditors or to reorganise its affairs.

33.2

Unless otherwise agreed in writing by the Managers, an Insured Owner shall cease to be insured by the Association in respect of a ship entered by him or on his behalf upon the occurring of any of the following events or circumstances in relation to such ship:

33.2.1

The Insured Owner parting with or assigning the whole or any part of his interest in the Entered Ship whether by bill of sale or other formal document or agreement or in any other way whatsoever, or

33.2.2

The Managers of the Entered Ship being changed by the appointment of new Managers.

33.3

Unless otherwise agreed in writing by the Managers, an Insured Owner shall cease to be insured by the Association in respect of a ship entered by him or on his behalf upon the occurring of whichever shall be the earliest of the following events or circumstances in relation to such Entered Ship:

33.3.1

The Entered Ship being missing for ten days from the date when she was last heard of;

33.3.2

The Entered Ship being posted at Lloyd’s as missing;

33.3.3

The Entered Ship becoming an actual total loss;

33.3.4

Acceptance by hull underwriters or by the Association that the Entered Ship is a constructive total loss;

33.3.5

Payment to the Insured Owner of the Entered Ship by marine underwriters or by the Association of an unrepaired damage claim which exceeds the market value of the Entered Ship, without commitment, immediately prior to the casualty which gave rise to such claim;

33.3.6

A compromise settlement with marine underwriters or with the Association on the basis of which the Entered Ship is considered or deemed to be an actual or constructive total loss;

33.3.7

A decision by the Association that the Entered Ship is to be considered or deemed to be an actual or constructive total loss or otherwise commercially lost.

33.3.8

The Entered Ship is employed by the Insured Owner in a carriage, trade, voyage or operation which will thereby in any way howsoever expose the Association to the risk of being or becoming subject to any sanction, prohibition or adverse action in any form whatsoever by any state or international organisation, or if the provision of insurance for a carriage, trade, voyage or operation is or becomes unlawful, prohibited or sanctionable, unless the Managers shall otherwise determine.

33.4

PROVIDED ALWAYS that:

33.4.1

Notwithstanding cesser of the insurance under Rule 33.3 consequent upon actual total loss, constructive total loss or other loss of the Entered Ship, the Association shall, subject always to the Rules and to the terms and conditions of the entry of the Entered Ship in the Association, remain liable in respect of claims which are within the scope of those terms and conditions and which flow directly from the casualty which has given rise to that actual total loss or constructive total loss or other loss;

33.4.2

The Managers may, as a condition of agreement that the insurance of the Entered Ship shall continue after the occurring of any of the events or circumstances listed in Rules 33.2 and 33.3, impose such terms and conditions as they think fit for the continuation of the insurance.

33.5

The Insured Owner shall in no circumstances be entitled to recover from the Association that part of any liabilities, costs and expenses which is not recovered by the Association from parties to the pooling agreement and/or under any reinsurance(s) because of a shortfall in recovery from the parties or reinsurers thereunder by reason of any sanction, prohibition or adverse action against them by any state or international organisation or the risk thereof if payment were to be made by such parties or reinsurers. For the purposes of this rule 33.5 “shortfall” includes any failure or delay in recovery by the Association by reason of the parties or reinsurers making payment into a designated account in compliance with the requirements of any state or international organisation.

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