The provision concords with the approach in the English war risk insurance conditions. The provision was amended in 2016 by the addition of the words in brackets in the first sentence of sub-clause 1. Sub-clause 2 is completely rewritten.
Sub-clause 1, first sentence, gives both the person effecting the insurance and the insurer the right to cancel the insurance in the event of changed circumstances. The cancellation is subject to seven days' notice. The words in brackets are verbatim the same as used in English conditions and clarify when the cancellation takes effect, i.e. on the expiry of 7 days from midnight of the day on which notice of cancellation is issued by or to the insurer.
The provision is primarily of significance for the insurer, as it ensures him the possibility of being released quickly from the insurance contract, when the risk has changed after the insurance contract was entered into. Consequently, the provision must be seen as a supplement to, on the one hand, Cl. 15-5, Cl. 15-6 and Cl. 15-7, which entail automatic termination of the insurance under certain circumstances and, on the other hand, Cl. 15-9, which gives the insurer wide-ranging powers to amend the trading areas and thereby reduce the risk he will run.
The right to cancel under sub-clause 1 may also be of importance to the assured. If, for example, a war situation has apparently subsided, but the assured finds that the insurer, compared with other insurers, has a very conservative view of the significance this should have for trading areas, premium, etc., the assured may be released from the insurance contract quickly.
The second sentence was added in the 2002 revision. It previously followed from Cl. 7-2 that cancellation of an insurance contract would not affect the rights of the mortgagee, unless the insurer had given him at least fourteen days' specific notice of the situation. In relation to war risk insurance, however, such a solution is untenable, because it might entail an insurer being bound in relation to the mortgagee for longer than the period for which he in fact has reinsurance cover. Adding the second sentence underscores the fact that in relation to war risk insurance, cancellation - by either the person effecting the insurance or the insurer - will also affect the rights of the mortgagee. Consequently, the insurance cover terminates with seven days' notice, even if the mortgagee himself has not received notice. In the last part of the second sentence, it is nonetheless stated as a standard procedure that the insurer shall immediately notify the mortgagee of the cancellation, regardless of whether it was initiated by the person effecting the insurance or by the insurer.
Sub-clause 2 supplements sub-clause 1. This provision only imposes on the insurer a best effort obligation to provide the assured with an offer for continued insurance on new conditions, if relevant, and with a new premium, provided always that it is practically and commercially possible to continue the war risks insurance. It is conceivable under extreme circumstances that no commercial war risks insurance can be made available. Hence, the war risks insurer must be relieved of any obligation to offer continuation of the war risks insurance. This applies regardless of whether it was the insurer or the assured who cancelled the insurance under sub-clause 1.