National Assembly body starts deliberations on Marine Insurance Bill 2010

National Assembly's Standing Committee on Commerce on Thursday started deliberations on the Pakistan Marine Insurance Bill 2010, which would enable the authorities to effectively regulate the marine insurance business and provide protection to the marine insurance companies.
The Ministry of Commerce gave a detailed presentation to the committee here on Thursday regarding Pakistan Marine Insurance Bill 2010. The Bill seeks to provide a national law on maritime insurance business and eliminate disputes in applying the international law. The draft legislation will provide protection to the policyholders as well as insurers of the country.
The proposed legislation will protect the policyholders against loss or damage arising out of or in connection with use of means of transport including motor vehicles, railways, rolling stock used on land, vessels used on the sea or on inland waters and aircraft, machinery, tackle, furniture or equipment of these means of transport including third party risk and carrier's liability and loss of or damage to merchandise, baggage and all other goods in transit, irrespective of the form of transport.
The committee met here at the parliament house with Eng. Khurram Dastgir Khan MNA in the meeting. A brief submitted to the NA Committee stated that the existing statute for the insurance sector in Pakistan, (ie the Insurance Ordinance 2000) excludes the application of Pakistani laws to marine insurance policies in terms of substantive and jurisdictional issues.
Therefore, adequate protection is not available to Marine Insurance Companies, their claimants or principal debtors in a marine insurance claim. Such laws are required to insure goods shipped all around the world through sea liners. In the absence of a specific body of legislation for marine insurance, Pakistan has since independence relied upon the British Marine Insurance Act 1906 (British MIA).
Pakistani courts have been constrained to use this Act of 1906 for adjudication of marine insurance cases. However, it has been observed that this application some times leads to problems of jurisprudence because of the non-binding nature and piecemeal application of the British MIA 1906. Most countries of the world have a national statute. It is time for Pakistan to enact its own marine insurance law and remove contradictions and overlaps with other laws.
In view of the problems faced by the insurance industry due to lack of Marine Insurance Laws for Pakistan, the Ministry of Commerce under the World Bank assisted "National Trade and Transport Facilitation Project," has had the proposed Marine Insurance Bill drafted by UNCTAD consultants, and accordingly got approval of the Cabinet for enactment of the Bill by the Parliament.
Highlights of the Marine Insurance Bill: Marine insurance insures ships/ hulls; goods/cargo; earnings (such as freight, passage money, commissions or profits); and liability (protection and indemnity). Through a contract of marine insurance the insurer undertakes to indemnify the insured in a mariner and to the extent thereby agreed, against marine losses incidental to marine adventures in which ships, goods or other movable property are exposed to maritime perils.
The Draft Bill comprising 92 sections shall apply to every contract of Marine Insurance written in Pakistan. The various chapters of the proposed Bill are detailed under the following headings: Marine insurance, define various terms and the mixed sea and land risks that may be covered by Marine Insurance.
Insurable interest, explain what interests can or cannot be covered by Marine Insurance. Insurable value, explains how insurable value is to be ascertained. Disclosure and representation, explain the facts to be disclosed when concluding a contract of Marine insurance. The policy: stipulate that every contract must be embedded in a policy; what such a policy must specify, and the types of policy.
Double insurance: - explains how the claims are to be handled in case an adventure is covered by two or more policies. Warranties - explain the nature of warranties that may be expressed or implied and must be complied with. The voyage - explain how the policy would apply in case of changed conditions of the voyage. Assignment of policy - explain when and how policy is assignable and who cannot assign policy.
The premium - explain the time for payment of premium. Loss and abandonment - explain the type of losses covered by insurance and how such losses, abandonment and salvage charges are to be dealt with. Partial losses including salvage, general average and particular charges - explain the various types of partial losses to the assured. Measures of indemnity - explain the sum which an assured can recover under various situations of loss.
Rights of insurer on payment - deal with the rights of the insurer on payment of claim to the assured. Returns of premium - explain the conditions in which the premium may be returned by the insurer to the assured. Mutual insurance - explains how the Act is to be applied to mutual insurance. Supplemental - deal with miscellaneous matters related to the Act. The schedule attached to the Act lays down the Rules for construction of policy.
The stakeholders in the insurance industry ie Insurance Association of Pakistan, (a representative body of the Insurance Companies in the private sector), Ministry of Law, Justice and Human Rights Division, Ministry of Ports & Shipping, Pakistan National Shipping Corporation, National Insurance Company Limited and all the four provincial governments have been consulted in the matter and they have agreed to the proposed draft, Pakistan Marine Insurance Bill 2010. The Marine Insurance Bill, 2010 has already been moved on 22-02-2010, through Ministry of Law & Justice in the National Assembly.