UAE to tighten insurance cover for ships flying its flag
In line with the UAE’s steadfast dedication to safeguarding the local, regional, and global maritime industry through strong regulatory measures, the UAE Ministry of Energy and Infrastructure (MOEI) issued a circular requiring non-members of the International Group of Protection and Indemnity Clubs (IG P&I Clubs) to provide additional information to regulators if they insure any UAE-flagged ships.
This move reaffirms the Ministry’s unwavering commitment to upholding rigorous standards, and driving the progress of the maritime sector around the world.
According to the circular, non-members of the IG P&I Clubs are required to demonstrate that they have a minimum S&P Global rating of ‘A’, and provide a list of claims exceeding US$10 million, or details of the five largest claims they have handled, including information on whether they have been settled or are still in reserve, before 30th June 2023. These insurers must also provide evidence of membership with a recognised maritime professional agency or regulatory body, and demonstrate that they have professional indemnity insurance with a minimum limit of US$10 million.
Additionally, these clubs must have a claims settlement authority that is equal to or higher than the policy limit they offer; and provide copies of the Certificate of Insurance, approved financial certificates such as Blue Cards, and MLC (Maritime Labour Convention) Certificates. These insurers should have a Managing General Agent (MGA), that confirms the existence of an Agency Agreement, or Binding Authority Agreement (BAA) on a multi-year agreement basis, with a minimum duration of 24 months; and need to confirm the availability of an online vessel search facility, which allows for easy access to vessel information and verification.
Speaking on the new updates, Hessa Al Malek, Advisor to the Minister for Maritime Transport Affairs, MOEI, said, “We at the UAE Ministry of Energy and Infrastructure have always been at the forefront of safeguarding the interest of the national maritime sector and catalysing its progress. By prioritising stringent P&I standards, we ensure the safety, financial security, and environmental stewardship of our maritime activities, attracting reputable investors, fostering trade partnerships, and creating a conducive business environment. These standards not only result in reduced risks and insurance liabilities, but also lead to increased confidence among industry stakeholders. As a result, we have full confidence that our ongoing efforts to strengthen the local, regional, and global P&I landscape will enhance the reputation of the national maritime sector, and foster sustained growth.”
These proactive measures taken by the Ministry, targeting non-members of the IG P&I Clubs, demonstrates its prioritisation of transparency and regulatory oversight to significantly enhance the credibility and resilience of the P&I insurance framework. By demanding comprehensive information from these clubs, MOEI aims to ensure the financial stability of industry stakeholders, while mitigating the impact of unforeseen incidents. The Ministry’s decisive steps to enforce stringent requirements for all P&I clubs will ultimately safeguard the interests of ship owners, managers, and operators, as well as port authorities, and crew members.
Furthermore, the new requirements set by the Ministry will result in benefits extending beyond safeguarding the interests of industry stakeholders, to encompassing the preservation of the marine environment. Higher standards of P&I across the nation will ensure more thorough evaluation and inspection of various factors such as the ship’s condition, maintenance records, compliance with safety regulations, and the ship owner’s track record. By ensuring that vessels meet specific requirements, P&I clubs can encourage ship owners to maintain high-quality and seaworthy ships, reducing the risk of accidents and oil spills, leading to a safer and more secure marine environment.
Source: WAM (Emirates News Agency)