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Rule 16 CALLS AND GUARANTEES
Section 1
Calls
A . The Members who have entered ships for insurance in the Association in respect of any policy year (not being a policy year closed in accordance with Rule 23) otherwise than on terms that a fixed premium shall be payable in respect of such ship, shall provide by way of Calls to be levied from such Members all funds which in the opinion of the Directors are required:
i. To meet such of the general expenses of the Association as the Directors may from time to time think fit to charge against the insurance business of the Association in respect of such policy year;
ii. To meet the claims, expenses and outgoings (whether incurred, accrued or anticipated) of the insurance business of the Association in respect of such policy year (including, without prejudice to the generality of the foregoing, any such excess of the claims and other outgoings in respect of Fixed Premium Entry over the premiums payable to the Association in respect thereof as the Directors may charge to such policy year, and any proportion of any claims, expenses or outgoings of any insurer other than the Association which has fallen or which may be thought likely to fall upon the Association by virtue of any reinsurance or pooling agreement concluded between the Association and such other insurer);
iii. For such transfers to the contingency, catastrophe or other reserves of the Association (as referred to in Rule 19) and for subsequent application for the purposes of such reserves or otherwise as the Directors may think expedient;
iv. For such transfers as the Directors may think proper to meet any deficiency which has occurred or may be thought likely to occur in any closed policy year or years.
B.The said Calls shall be levied by means of Advance Call, Supplementary Calls or Release Calls and Overspill Calls in accordance with the provisions of paragraph [C] of Section 1 and the provisions of Sections 2, 3 and 4 of this Rule.
C. The Managers shall be entitled to levy Release Calls in accordance with Rules 24, 25 and 26 upon a Member whenever the insurance of any or all ships entered by him in the Association is ceased, terminated or cancelled for any reason. The Member shall be bound to pay such Release Calls as the Managers may require.
Section 2
Advance Call
A . The Advance Call shall be agreed between the Managers and the applicant Owner or the Member at the time of application for insurance or before the commencement of each policy year pursuant to the relevant information such as ship’s general condition, characteristics of trade, risks covered, loss ratio and etc.
B . Without prejudice to the effect of the provision of paragraph [A] [(iv)] of Section 10 of Rule 5 in respect of Hull and Machinery cover, the Member shall, at the time of the commencement of entry of a ship in the Association, be bound to pay Advance Call in full as agreed pursuant to paragraph [A] of this Section, or in installments as the Managers may agree.
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