Insurance/Financial Security Aspects of the HNS Convention

1
Insurance/Financial Security Aspects of the HNS
Convention

• Prepared by CEFIC and Presented by CCPA
•  
• June, 2003

2
Introduction

• CEFIC and CCPA support HNS Convention's increased
  shipowner liability limits
• We also support the compulsory insurance/financial
  security provisions
• We are interested in how these provisions will be
  implemented and enforced by State Parties

3
Chemical Shipments Are Diverse

• Trading practices in chemicals much less uniform
  than in oil
• Over 5,000 chemicals at least 8,000 vessels
  hundreds of receivers
• Majority of HNS not in tankers--some in general
  cargo vessels
• Verification of shipowner insurance/financial
  security considerably more complex than for oil

4
Mechanisms for Implementing Insurance/Financial
Security

• A national agency within each state party (e.g. ,
  see the U.S. Coast Guard National Pollution Funds
  Center) to ensure compliance
• International guidelines for how State Parties
  should assess the soundness of insurers and
  re-insurers
• International guidelines for control procedures
• International agreement on how to deal with
  general cargo vessels carrying HNS

5
Conclusion

• CEFIC and CCPA recommend that each of these
  mechanisms should be developed and ready for
  implementation when the HNS Convention enters
  into force for a given State
• They will help to ensure that channeling of
  liability and consequent compensation work as
  intended by the HNS Convention