The Indian National Shipowners Association (INSA) has made a representation to the Authority against the circular no. GEN/CIR/21/JUN-04 dated June 8, 2004. The representation has brought out number of issues on the subject including their assertion that the presence of a tariff regime in Marine Hull portfolio of insurance business has deprived them of getting the most competitive rates, terms and conditions which are available to their competitors in the international markets. INSA has further represented that the special discount of 5 percent is the only way that they can be compensated for remaining competitive in a free pricing regime.

INSA indicated that they did not make a special representation before the Expert Committee appointed by the Authority to look into the aspects of remuneration to insurance agents and insurance brokers as they believed that the dispensation of 5 percent special discount in lieu of agency commission/broker’s remuneration was applicable to all tariff business of which Marine Hull has always remained a part, and not merely restricted to fire and engineering classes of tariff business. Consequently whatever dispensation is available to fire and engineering should apply to Marine Hull also.

In view of the above representation and in suppression of circular No.GEN/CIR/21/JUN-04 dated June 8, 2004 the Authority hereby directs that in addition to owner’s discount of 10 percent wherever applicable the shipowners will also be eligible for 5 percent special discount in lieu of agency commission/brokers’ remuneration until further order if the business is placed with the insurance companies directly without utilizing the services of either agents or brokers.

All the shipowners and INSA are now given another opportunity to represent their case before the Authority within three months of the issue of this circular, to enable it to consider their views and take a final decision.

The above orders come into force from immediate effect.



Sd/-
(C.S. Rao)
Chairman