Loss Prevention

1. Condition survey on vessels

The ships’ survey programme instigated by the Association includes pre-entry condition surveys and routine inspection of entered vessels. The Managers of the Association carried out surveys on 48 vessels of which 28 were condition surveys and 20 routine inspections which was a dramatic increase of 5 vessels in the 2000 policy year.

The Association has announced the introduction of a loss prevention plan since 1995. As an important component thereof , the Association has performed consecutively for years pre-entry condition surveys of overaged vessels and randomly inspected entered vessels which are overaged or incident prone which was achieved a good result. In spite of the clear benefits of this programme, the results of the surveys on newly entered and existing vessels in 2001 were not encouraging. Although the overall condition of the fleets insured by the Association has improved, there is no significant improvement of overall condition of the vessels entered because many second-hand vessels purchased by the members in recent years entered with the Association.

Vessels’ condition have improved in certain aspects due to the pre-entry condition survey policy of the Association, stricter class surveys by the classification societies and port state control inspections on vessels. However, we also have noted that there is no apparent improvement in ship management and crew education. Some shipowners were not interested to repair vessels to delete the defects / recommendations discovered upon survey in accordance with the requirements of Association.

The Managers reminds all members to pay attention to the results of the condition survey to ensure that all defects and recommendations noted by the surveys are timely rectified. Members should particularly note that cover would be prejudiced to the extent the Association will not be financially concerned with claims attributable or caused by those defects, and accordingly repairs to these defects should be carried out immediately to avoid disputes on claims with the Association. If vessels are found to have inherent and fundamental defects which affect safety, cargoworthiness and seaworthiness, then the Association will limit the scope of cover and, if necessary, include warranties into the cover so that interest of all the members are protected.

2. Business Lectures

The association held a seminar on P&I business in Xi’an in Sept. 2001, attended by staff of the Club managers, Dalian Maritime Court, China Marine Arbitration Committee, as well as lawyers from Hong Kong and the U.S.A. The topics discussed were on maritime lien, the development of China’s Marine Arbitration, the procedure and practice of arbitration, the legal and practical measures against defaulting charterers, time charterers’ liability insurance, the implication of ISM rules, the extent of shipowners liability for stevedore injury under American law, the defence of bulk cargo claims, the insurance for death and illness of crew etc. The seminar enabled members to know the latest legislation of domestic and international maritime codes and other current practical problems in maritime business. The managers also compiled a report containing the papers delivered in the seminar for circulation to the members.

3. Advisory Services

The Association published 12 issues of Advisory Services with 38 articles, the contents of which include loss prevention, maritime laws and regulations, etc. The article on cover for crew injury and death risks analyzed the special risks the Association covered and its relation with other types of insurance. With regard to “the assured’s responsibility for disclosure”, the relevant cases are discussed describing the basic obligation of an assured under an insurance contract; researching Int’l Marine Legislation, “a trend of International legislation on restriction of Oil Tankers” and “The Influence Upon Shipowners Caused by the Implications of ISM Regulations which described the impact of International conventions on the development of international Shipping industry. To better protect the members’ interests, the Advisory Services this year shall produce on a regular basis “loss prevention bulletin” containing loss prevention information on the ports of the world.

4. Oil Pollution Certificate

The Managers arranged for 38 vessels of 18 members in 2001 to obtain the COFR Certificates for the vessels trading to U.S. territorial water. In addition, the department issued to 52 tankers from 20 members the application forms(Blue Card ) for the civil liability oil pollution certificate.

2001

(in member)

2001

(in vessel)

2000

(in member)

2000

(in vessel)

Ratio (+-)

COFR

+18.7%

Blue Card

+5.3%

+13%

Investment

In accordance with Board of Directors' directive, the Association's funds are managed and invested prudently and safely. This policy year saw a significant investment income as showed in the chart of the trend of the funds. The favorite investment returns improved the recent deteriorating claims situation.