TRADE WINDS: WQIS set to slash cost of pollution guarantees

New York insurance syndicate steps out into world market with bargain pricing on tickets to trade to the US
Reposted with permission from Trade Winds. Jim Mulrenan,  London

The cost of a “ticket to trade” to the US could be halved as the Water Quality Insurance Syndicate (WQIS) bids for a significant share of the pollution financial guarantee market.

The move is expected to shake up the market for certificate of financial responsibility (COFR) guarantees required by more than 21,000 ships trading to the US. New York-based WQIS is to offer big reductions in the cost of COFR guarantees but is reluctant to confirm insurance market talk that premium levels could be 50% of existing providers. Read the rest of this entry »

WQIS Now Offering COFR Guarantees for the World’s Largest Vessels

The Water Quality Insurance Syndicate (WQIS) has announced that, as of June 5th, 2015, it will significantly increase the limits of its Certificate of Financial Responsibility offering, allowing coverage for the world’s largest vessels and providing an alternative for operators requiring a COFR at the most competitive rates in the market. Read the rest of this entry »

UPDATE: INCREASE IN LIABILITY LIMITS UNDER THE LLMC/BUNKER CONVENTION

As WQIS has previously advised, on June 8, 2015 the limit of liability under the Bunker Convention will increase by approximately 50%. For all current WQIS assureds that have a Bunker Convention Blue Card issued by WQIS, WQIS is automatically holding covered the new gross tonnage limits until the policy expires, even if it exceeds the current policy limit purchased.

Under the amendments to the 1996 Protocol to the LLMC Convention, the limits are raised as follows:

The limit of liability under the Bunker Convention for ships not exceeding 2,000 gross tonnage is 1.51 million SDR (up from 1 million SDR).

For larger ships, the following additional amounts are used in calculating the limitation amount:

  • For each ton from 2,001 to 30,000 tons, 604 SDR (up from 400 SDR)
  • For each ton from 30,001 to 70,000 tons, 453 SDR (up from 300 SDR)
  • For each ton in excess of 70,000 tons, 302 SDR (up from 200 SDR).

The current conversion rate for an SDR is approximately 1.5 U.S. Dollars.

Water Quality Insurance Syndicate (WQIS) is authorized by the majority of the flag states to provide the financial guarantee (“Bunker Convention Blue Card”) needed to obtain the certificate vessels must produce in compliance of this Convention.

For more information, contact your WQIS underwriter to ensure you have all the proper coverage in place. For additional details on IMO Bunker Convention, click here.

About The IMO Bunker Convention
The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001 (IMO Bunker Convention) establishes shipowner liability for spills of oil when carried as fuel in ships’ bunkers. All vessels over 1,000 gross tonnage for the waters of the signatory nations and for all signatory flag vessels must carry and produce a certificate certifying that it has insurance or other financial security to cover the liability of the registered owner for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime.

About WQIS
WQIS is the largest U.S.-based underwriter of pollution liability insurance for marine vessels. With over 44 years in the industry, no one has more marine pollution insurance and spill response expertise, or offers more innovative coverage to the marine community. WQIS is dedicated to providing the broadest coverage and creating the most responsive organization to serve the needs of their clients.

INCREASE IN LIABILITY LIMITS UNDER THE LLMC AND BUNKER CONVENTION

Effective June 8th, 2015, the limit of liability under the Bunker Convention will increase by approximately 50%.

Under the amendments to the 1996 Protocol to the LLMC Convention, the limits are raised as follows:

The limit of liability under the Bunker Convention for ships not exceeding 2,000 gross tonnage is 1.51 million SDR (up from 1 million SDR).

For larger ships, the following additional amounts are used in calculating the limitation amount:

  • For each ton from 2,001 to 30,000 tons, 604 SDR (up from 400 SDR)
  • For each ton from 30,001 to 70,000 tons, 453 SDR (up from 300 SDR)
  • For each ton in excess of 70,000 tons, 302 SDR (up from 200 SDR).

The current conversion rate for an SDR is approximately 1.5 U.S. Dollars.

Read the rest of this entry »

TRIA Extension Passed by Congress

TRIA has been renewed by Congress. The Legislation now goes to the President who is expected to sign it very soon. The key provisions are:

  • 6 year reauthorization;
  • $200 million trigger – no change in 2015, but phased-in the following five years in $20 million  increments;
  • 80-20 public – private co-share –no change in 2015, then phases in over one-percentage per year (Senate text);
  • Program Cap – $100 Billion (unchanged from current program);
  • Deductible – 20 percent (unchanged from current program);
  • Certification – Treasury Secretary shall study and report to Congress on certification process and within 9 months of that report, issue final rules on certification process, including on timeline for certification;
  • Recoupment – The insurance marketplace aggregate retention amount is the LESSER of (1) $29.5 B, which climbs in annual increments to $37.5 B; or (2) an aggregate amount for all insurers of covered losses during calendar year. Following year five of the program, when  the retention amount equals $37.5B, the aggregate retention shall be equal to a 3 year average of the sum of insurer deductibles for all insurers participating in the program. This adjustment does not include the House text 107(b). The percentage recoupment is 140 percent.

Congresses intent is the TRIA reauthorization will apply retroactively and continuously without any lapse so that there will be no program gap. The Treasury Department will issue guidance and regulations consistent with that intent implementing the reauthorized TRIA program. WQIS will continue to cover losses caused by terrorism events consistent with the TRIA extension and our policy terms and conditions.

Please contact WQIS if you have any questions or would like further information regarding the TRIA renewal.

UPDATED: Single-hull Tank Vessel Phase-out

As we have previously advised, vessel owners and operators should be aware that the OPA 90 phase-out deadline for single-hull tank vessels was January 1, 2015. This means that it is now unlawful to operate any single-hull tank vessel subject to the double-hull requirements of 33 CFR part 157 (including any tank vessel with double sides only or a double bottom only) in United States waters after the above date and that violators will be subject to enforcement. See link

WQIS is a financial guarantor for OPA 90 Certificate of Financial Responsibility (COFR) for single-hull tank vessels. Please be aware, however, that your COFR is not a permit to operate any vessel in US waters in violation of the single-hull tank vessel phase-out deadline. Additionally, any liabilities arising out of the continued operation of  a single-hull tank vessel in violation of the phase out deadline would not be covered under the WQIS Policy.  At renewal, any such vessels that are still on the vessel schedule will be deleted.

Please contact a WQIS underwriter if you have any questions regarding the single-hull tank vessel phase out or wish to advise us of any single-hull tank vessels that need to be removed from your vessel schedule.

Single-hull Tank Vessel Phase-out

Vessel owners and operators should be aware that the Oil Pollution Act of 1990 (OPA 90) phase-out deadline for single-hull tank vessels is January 1, 2015.  This means that it will be unlawful to operate any single-hull tank vessel subject to the double-hull requirements of 33 CFR part 157 (including any tank vessel with double sides only or a double bottom only) in US waters on and after that date and that violators will be subject to enforcement.  (See http://mariners.coastguard.dodlive.mil/2014/12/05/1252014-opa-90-single-hull-tank-vessel-phase-out-finalizing-on-january-1/)

WQIS is a financial guarantor/self-insurer for OPA 90 Certificate of Financial Responsibility (COFR), including single-hull tank vessels.  Please be aware that your COFR is not a permit to operate any vessel in US waters in violation of the single-hull tank vessel phase-out deadline.  Tank vessel operators must, moreover, continue to maintain the evidence of financial responsibility required by 33 U.S.C. 2716 and 33 CFR part 138, subpart A, and responsible parties and their COFR guarantors will continue to be liable in the event of an OPA 90 incident involving any such vessel.

If you have any questions regarding the single-hull phase-out, please contact WQIS.

WQIS Announces Senior Leadership Change As President Richard Hobbie Sets Retirement

New York, NY – November 17, 2014
After four decades as underwriter, claims manager and Board Member, WQIS has announced the retirement of Richard Hobbie III from his position as President & CEO of the Water Quality Insurance Syndicate. The Board of Managers and Mr. Hobbie have agreed upon January 1, 2015 as his official retirement date. Rich will be available as a consultant to WQIS until Dec. 31, 2017 under the agreement.

Read the rest of this entry »

Changes to Alaska Financial Responsibility Requirements

Alaska State law requires vessel operators to demonstrate proof of financial responsibility for claims resulting from an oil spill.  To reflect significant increases in the Consumer Price Index (CPI), Alaska’s Department of Environmental Conservation recently adopted an order which increases the limits of liability for vessels and offshore facilities under Alaska state law by approximately 9% across the board, effective October 1, 2014.

Changes to Liability Limits under OPA 90

To reflect significant increases in the Consumer Price Index (CPI), the United States Coast Guard has published a Notice of Proposed Rulemaking which, when finalized, would increase limits of liability for vessels, deepwater ports and onshore facilities under the Oil Pollution Act of 1990 (OPA 90).
Under the current proposal, which could be finalized by end of year, OPA 90 limits of liability would increase by approximately 9% across the board. Public comments may be submitted by October 20th, 2014.