The Plan

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Chapter 6: Premium

  • Clause 6-1. Payment of premium

    The person effecting the insurance is liable to pay the premium. Unless otherwise agreed, the premium falls due on demand.

    If the premium is not paid when due, interest on overdue payments accrues at the same rate as provided for in Cl. 5-4, sub-clause 4.

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    Clause 6-1. Payment of premium

    This Clause was amended in the 2013 Plan. Under sub-clause 1, first sentence , the person effecting the insurance is "liable to pay the premium". The premium may, however, be paid by another party, for example the assured. The key point of the provision is thus that responsibility for the payment...

  • Clause 6-2. Right of the insurer to cancel the insurance in case of non-payment of premium

    If a premium is not paid at the proper time, the insurer may cancel the insurance by giving fourteen days' notice.

    If the premium is paid before expiry of the time-limit, the notice of cancellation no longer applies.

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    Clause 6-2. Right of the insurer to cancel the insurance in the event of non-payment of premium

    This Clause corresponds to Cl. 113 of the 1964 Plan. The provision corresponds to the Norwegian Insurance Contracts Act (ICA) Section 5-2, with the difference that the ICA provision contains detailed rules on obligatory premium reminders, cf. also Cl. 114 of the 1964 Plan, and rules on protection...

  • Clause 6-3. Premium in the event of total loss

    If the insurer pays compensation for total loss, or pays the sum insured pursuant to Cl. 4-21, he is entitled to the entire agreed premium.

    If the total loss is attributable, wholly or in part, to a peril which is not covered by the insurance, the person effecting the insurance may, for the proportion of the sum insured that is not paid, demand a reduction of premium corresponding to the period of time during which the insurer has not borne the risk.

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    Clause 6-3. Premium in the event of total loss

    This Clause corresponds to Cl. 116 of the 1964 Plan. The Commentary was amended in the 2010 version. Sub-clause 1 is identical to Cl. 116 of the 1964 Plan, and is in line with established international practice in shipowners' insurance to the effect that the full premium is to be paid for the...

  • Clause 6-4. Additional premium when the insurance is extended

    In the cases referred to in Cl. 10-10 the insurer may demand an additional premium in proportion to the time by which the insurance has been extended.

    If, at the expiry of the insurance period, it is uncertain whether a claim for total loss will be brought under Cl. 11-2, sub-clause 2, Cl. 11-7 or Cl. 15-11, and the ship is subsequently salvaged or reported safe, an additional premium may only be demanded from the time the assured, or someone acting on his behalf, gained control of the ship.

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    Clause 6-4. Additional premium when the insurance is extended

    This Clause is identical to Cl. 118 of the 1964 Plan. Sub-clause 1 must be viewed in connection with the right to an extension of the insurance period. The provision is of significance in relation to both hull insurance and the separate insurance for total loss, cf. reference to the hull insuranc...

  • Clause 6-5. Reduction of premium

    If the insurance period is shorter than agreed, or the insurance has not been in effect for a period of time, the person effecting the insurance may demand a reduction of premium which corresponds to the reduction of the insurance period.

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    Clause 6-5. Reduction of premium

    This Clause corresponds to Cl. 121 of the 1964 Plan and relevant Nordic Insurance Contracts Acts (Nordic ICAs) relating to termination of the insurance during the insurance period. The term “insurance period” must be interpreted here as the expiry of the agreed insurance period regardless of...

  • Clause 6-6. Reduction of premium when the ship is laid up or in similar situations

    If the ship, during the insurance period, lies at one location for an uninterrupted period of at least 30 days, with no cargo on board, the assured may demand negotiations for a reduction of premium (return of premium).

    The insurer is entitled to full premium during a stay provided that:

    • the ship is insured on terms as referred to in Cl. 10-5 to Cl. 10-6,
    • the insurer subsequently becomes entitled to the entire agreed premium under Cl. 6-3.
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    Clause 6-6. Reduction of premium when the ship is laid up or in similar situations

    This Clause corresponds to Cl. 122 of the 1964 Plan, Cefor V.1, sub-clause 1, and PIC Cl. 9. Cl. 122 of the 1964 Plan did not contain any basis for a return of premium, but stated that if the parties had entered into an agreement on the matter, the premium reduction was to be calculated according...

  • Clause 6-7. Claim for a reduction of premium

    A claim for a reduction or return of premium according to the rules contained in this Chapter shall be brought within six months of expiry of the insurance year or the insurance period, if this is shorter than one year. If the claim depends on the way in which the ship has been used, the person effecting the insurance must produce particulars of the ship's employment.

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    Clause 6-7. Claim for a reduction of premium

    This Clause corresponds to Cl. 126 of the 1964 Plan. Cl. 126 of the 1964 Plan contained deadlines for the bringing of claims for a reduction of premium, but made no provision for sanctions if the deadline was not complied with. The deadline provision has, accordingly, been amended to become a pur...