Rule 32 Cesser of Insurance

CESSER OF INSURANCE

1. A Member shall cease to be insured by the Association in respect of any and all ships entered by him or on his behalf upon the happening of any of the following events:
   1. if a Member is an individual
      1. upon his death;
      2. if a receiving order is made against him;
      3. if a petition in bankruptcy is presented in respect of him or any analogous proceedings are commenced against him in any jurisdiction outside the United Kingdom, or he makes any compromise, scheme or arrangement with his creditors generally in order to avoid or prevent the presentation of such a petition or such analogous proceedings;
      4. if he shall become bankrupt or make any composition or arrangement with his creditors;
      5. if he shall become incapable by reason of mental disorder of managing and administering his property and affairs;

      or if an event having as similar effect under any system of law shall occur in relation to that individual;

   2. if a Member is a corporation,
      1. upon the passing of any resolution for voluntary winding up;
      2. upon its commencing proceedings under any bankruptcy or insolvency laws to seek protection from its creditors or to reorganise its affairs;
      3. upon its making any compromise, scheme or voluntary arrangement with its creditors or upon its commencing proceedings under any bankruptcy or insolvency laws to seek protection from its creditors or to reconstruct or readjust its debts or to reorangise its affairs;
      4. upon a Receiver, Administrator or Manager of all or part of the corporation’s business or undertaking being appointed;
      5. upon an order being made for the appointment of an Administrator, Receiver or Liquidator or for compulsory winding up;
      6. upon dissolution;

      or if an event having similar effect under any system of law shall occur in relation to that corporation,

   3. if the Member’s insurance is cancelled under General Rule 34.2
2. Unless otherwise agreed in writing by the Managers, a Member shall cease forthwith to be insured by the Association in respect of a ship entered by him or on his behalf upon the happening of any of the following events in relation to such ship:
   1. if the Member shall part with or assign the whole or any part of his interest in the ship, whether by Bill of Sale or other formal document or agreement or shall cease to have an interest in the ship or shall part with or transfer the entire control or possession of the ship, whether by demise charter or by any other way whatsoever,
   2. if the ship is mortgaged or otherwise hypothecated without an undertaking or guarantee approved by the Managers being given to pay all contributions due or to become due in respect of the entered ship, unless the Managers exercise their discretion in any particular case to dispense with such an undertaking or guarantee,
   3. if any person having given an undertaking or guarantee under the preceding paragraph fails to discharge his liability thereunder upon demand by the Managers.
   4. in the case of any entry by a time charterer, if the time charter ends or is terminated,
   5. if the entry of the ship is terminated in accordance with any Class Rule,
   6. if the management of the ship is transferred or the flag of the ship is changed, where a ship is entered for insurance through an agent (not being an insurance broker), such agent shall for the purposes of this paragraph in this Rule be deemed to be the manager of the entered ship unless at the time of the ship’s entry for insurance the Managers were furnished with the name of the management of the ship to be insured.
   7. if the Member fails to provide a Bank Guarantee required to be furnished under General Rule 12.1 within 14 days of being called upon to do so.
   8. if the ship or the Member including, if the Member is a corporation, the officers and beneficial owners or any one of them shall be appear on the United Nations Security Council Sanctions List, the United States Department of the Treasury Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons List, the European Union Consolidated Financial Sanctions List or any other national or international sanctions list such that by continuing with the entry of the ship the Association or the Managers might be exposed to the risk of being or becoming subject to any sanction, prohibition or adverse action in any form whatsoever by any state, international organization or other competent authority.
3. Unless otherwise agreed in writing by the Managers and subject to Rule 34, a Member shall cease to be insured by the Association in respect of a ship entered by him or on his behalf upon the happening of whichever shall be earliest of the following events:
   1.  the ship shall be missing for ten days from the date she was last heard of or from her being posted at Lloyd’s as missing,
   2. if the ship shall become an actual total loss or shall be agreed by the Hull Underwriters (whether of marine or war risks) as constituting a constructive total loss or a compromised total loss or shall become a commercial total loss,
   3. if the Hull Underwriters (whether of marine or war risks) make a payment without commitment to a Member in respect of an unrepaired damage claim which exceeds the market value of the ship immediately prior to the casualty which gave rise to such claim,
   4. if the Managers in their discretion conclude that the ship is to be considered or deemed to be an actual or constructive total loss or otherwise commercially lost.
4. The Managers may, as condition of agreement that the insurance of the ship continue after the occurrence of any of the events or circumstances listed in this Rule impose such terms and conditions as they think fit for the continuation of the insurance.