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KP&I: “To accept medium-large ships in alliance with IG Club”
Tuesday, October 17, 2017, 17:40:20 Paul Yoon ckyoon7@paran.com
Korea P&I (KP&I) has taken an opportunity to achieve its development at a leap as it is able to undertake insurances for all kinds of vessels in future without any restriction in alliance with Standard Club, a member of IG Clubs. Park Jong Seug, Chairman of KP&I and the Club officials unveiled at a press conference on last Oct. 16 that it has agreed with Standard Club to co-undertake insurances, and that it plans to ink an agreement in this regard at a ceremony on upcoming Oct. 30.

KP&I had introduced KSC (Korea Standard Collaboration) system last year to small- and medium-sized vessels below 10,000gt that require insurance policy certifying their entry into P&I clubs. This time, it has agreed with Standard Club to jointly undertake insurances for medium and large sized vessels. As a result, those Korean flag owners of medium- and large-sized vessels, who have not entered KP&I to date as it is unable to produce IG club entry policy with its maximum security limited to $1 billion, are expected to increasingly enter KP&I. In this respect, KP&I said: “KP&I has grown over the past 17 years together with Korean shipping players, and has removed all the stumbling blocks hampering their entry into the club, expecting many of them to join the club in future.”

The collaboration between KP&I and Standard Club reveals that the maximum security limit should be up to $7b, and it is agreed that Standard Club should compensate in the case of loss damage claim exceeding $500,000. Accordingly, those vessels that have entered the collaboration program between the two clubs can receive Korean language service in the same areas and same time zones as those vessels that have entered KP&I, and get competitive insurance premium rates, while benefiting from IG club’s accumulated claim handling knowhow, from $7b compensation limit and IG club’s payment guarantee at the same time.

At the press conference in the day, KP&I dealt with the issue of inducing beneficiary vessels to receive government’s support and that of joint-response in alliance with KSA (Korea Shipowners’ Association). The club said that it has already finalized the preparation to induce those beneficiary candidate vessels in coordination with the government and state-run banks to enter KP&I Club. These vessels include the state-nominated essential 75 vessels, 49 national security ships, 79 ships for transport of strategic cargoes, and 48 support vessels for KSmart and KAMCO. Also, KP&I plans to amend the mandatory P&I clause under the prevailing finance agreements or shipping contracts that compel those ships to enter IG club so that they can enter KP&I instead to enjoy equal qualification. This matter is now under discussion with KSA to amend the relevant regulations.

KP&I is set to push for expansion in its business scope by amending Korea P&I Act so that it can handle P&I reinsurance and H&M (hull & machinery) insurance. In this connection, Hwang Ju-Hong, a member to the National Assembly Agriculture, Maritime Affairs & Fisheries Committee, proposed last June the bill of an amendment to Korea P&I Act, which the National Assembly plenary session is due to pass in next December.
Paul Yoon Archives  
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