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Section K: Premiums
18.1 - Mutual premiums
Members who have ships entered in the club in respect of any policy year, not being a closed policy year, other than on fixed premium terms, insure each other against liabilities which they or any of them may incur or become liable to pay and contribute to the funds of the club required to meet:
- all its liabilities and other outgoings, actual or anticipated;
- all provisions the board deems it expedient to make.
Members agree to pay all premium and other sums determined by the board, in such manner and at such time as the board may require.
18.3 - Estimated total premium
Before or at the beginning of each policy year, the club shall levy upon members an estimated total premium (ETP) calculated on the basis of the premium rating per entered ton. The board decides the number of instalments in which payment is to be made and payment will be made accordingly unless otherwise agreed by the managers.
If at any time the board determines that the whole of the ETP is not required to meet the obligations of the club:
- it may declare a discount of such percentage of the ETP as it may decide; and
- the liability of the members to pay ETP under rule 18.3 shall be reduced accordingly.
Before the start of a policy year, the board may decide the percentage by which there is to be a general change in the premium ratings of all members. Unless otherwise agreed between the managers and a member, the premium ratings so changed will apply in respect of such policy year.
If a member ceases to be insured in respect of any ship before any instalment of ETP becomes payable, the managers will, subject to rule 17.5(1), decide how and when any such sum is to be paid, provided that it will be immediately payable if the member has no other ships entered in the club, or subsequently withdraws all his ships.
18.7 - Supplementary calls
The board may levy one or more supplementary calls in any open policy year if it determines that the funds or reserves of the club are insufficient for that year, or for any other purpose.
18.8 - Laid-up returns
If a ship is laid-up in a safe port without any cargo on board for 30 or more consecutive days after finally mooring there, the member is, subject to rule 18.9, allowed a pro-rata return of premium up to a maximum rate of 75%. Any lay-up return is reduced pro-rata for any period of shifting within the port during lay-up.
Exclusions to rule 18.8
- There shall be no return of overspill calls.
- Unless otherwise agreed by the managers, there shall be no return if:
- a there are crew on board the ship other than for security or for maintenance necessary for the safety of the ship; or
- b repairs are carried out other than for the safety of the ship.
If a member does not notify and submit his claim for reimbursement to the managers in writing within three months under rule 16.5, or within three months of the end of the policy year under rule 18.8, no allowance or return shall be made unless the managers otherwise determine.
19.1 - Releases
Upon the cessation of insurance of any ship, a member may be released from all further liability for premium to the club, other than in respect of any overspill call.
The managers will calculate the amount required to so release the member (‘the release call’) by reference to such percentage of the premium rating as the board may decide.
Within the time specified by the managers, the member may elect to pay either the release call or all further premium when due.
If the member elects to pay all further premium when due, he must, unless he has other ships remaining in the club under an owner’s entry, provide at his own expense within the time specified by the managers, a guarantee acceptable to the managers for the full amount of the release call. If he fails to provide the guarantee within the time specified, the release call automatically becomes payable.
If during the period that the member is still liable to pay further premium he no longer has any ships remaining in the club under an owner’s entry, he must immediately provide a guarantee acceptable to the managers for the full amount of all release calls in respect of all of his ships.
If, after the original release call is calculated, the board amends the release percentage, the managers may re-calculate the release call.
The managers may impose such other terms and conditions as they think fit.
A member who has paid a release call is under no liability for any premium in respect of any ship which is the subject of the release call assessed after the date of the release, other than for any overspill call, and has no right to share in any return of premium which the board may thereafter decide to make.
20.1.1 - Payment
Any premium or other sums due shall be designated in such currency, and be payable in such manner and at such time, as the managers may specify. If any sum due is not paid on the specified date, time being of the essence, such member shall pay interest on the amount outstanding from that date until the date of payment at such rate as the board determines. The managers may, however, waive payment of interest in whole or in part.
Where a member has appointed a broker, the broker is the agent of the member. Payments of premium and other sums due to the club shall not be considered received by the club until actually received by it, and payment by the member to his broker or other intermediary shall not constitute payment to the club.
Where the member has appointed a broker, payment by the club to the broker of sums due to the member shall constitute payment to the member. Any such payment shall fully discharge the club’s liability to the member in respect of such sums.
The club is entitled to, and the member grants, a lien on the ship in respect of any amount owed by the member to the club.
20.3 - Closed policy years
Subject to rules 21.9 to 21.12, the board may decide to close any policy year at any time.
If the premium obtained exceeds the liabilities and other outgoings falling upon the club for that year, the board may either carry the surplus to reserves or return it in whole or in part to the persons who paid such premium in proportion to the aggregate premium paid by them in such policy year.
If at any time after a policy year has been closed it appears to the board that the liabilities, other than overspill claims, and other outgoings arising in respect of the year exceed or are likely to exceed the premium, other than overspill calls, in respect of the year then the board may decide to provide for such deficiency by:
- utilising funds either from reserves or standing to the credit of any different closed policy year; or
- levying one or more supplementary calls in respect of any open policy year.
20.6 - Reserves
The board may:
- establish and maintain such reserves or other accounts as it thinks fit;
- transfer any sum standing to the credit of any policy year to any reserve;
- apply the sums in any reserve for any purpose and may at any time transfer sums from one reserve to another.
20.7 - Investment
The funds of the club may be invested in any way the board may determine.
Unless the board otherwise determines, all funds relating to any policy year or reserve shall be pooled and invested as one fund.
The board may apply investment returns to any policy year or reserve as it thinks fit.