Earlier loss of hire insurance conditions

As mentioned in 1.3.1 above, loss of hire insurance developed out of the Suez crisis in 1956. The development originated in the London market and the Norwegian market followed suit, initially using the conditions adopted by the London market. Later on, each of the insurers introduced their own conditions, to a large extent based on the conditions used by the competing foreign markets, with the US emerging as a third alternative market to London and Norway.

In connection with the 1964 revision of the Norwegian Marine Insurance Plan, new loss of hire insurance conditions were introduced in Chapter 20 of this Plan. This was the first attempt to create common loss of hire conditions for the Norwegian market based on the Norwegian tradition of using the framework of the Plan. However, the new conditions were never used by the Norwegian market because the insurers engaged in this type of insurance still preferred their individual conditions, and the market was not prepared to adopt some of the solutions introduced in Chapter 20 of the 1964 Plan. § 261 of the 1964 Plan regarding simultaneous repairs in particular was at the time considered unsuitable by the market, see the 1972 Commentary, page 13.

In 1972, another attempt was made to create common Norwegian conditions on loss of hire insurance, this time successfully. The 1972 conditions were initiated and published by four insurance companies:  Vesta and three other companies that merged into the previous Storebrand Property Insurance Company. Substantial restructuring has occurred within the Vesta and Storebrand Groups, the gist of which, for the purpose of loss of hire insurance, is that the ocean marine portfolio was transferred to Gard Marine and Energy.

The 1972 conditions were prepared by an expert group. The leader of the expert group was the late Professor dr. jur. Sjur Brækhus.  The three average adjusters practicing in Norway at the time constituted the other members of the expert group. These were the late Henrik Ameln and the late Leif Strøm-Olsen and Jan Frøystein Halvorsen, who was later appointed Supreme Court Judge (now retired).  Sjur Brækhus wrote extensive commentaries to the 1972 conditions in co-operation with the other members of the expert group. Furthermore, the four insurance companies that originally published the 1972 conditions had appointed a committee of six representatives from their own staff, which closely examined and commented on the proposals of the expert group.

Amendments to §§ 6 and 8 of the 1972 conditions were introduced in 1977 and were generally accepted and used by the market. They came to be known as "Amendments 1977".

As late as 1993, there was a general overhaul of the loss of hire insurance conditions by market people with assistance from the average adjuster Ragnar Svarstad (now retired). The 1993 revision was published by the then Mutual Marine Insurers' Committee (GSK)[1] and was entitled General Conditions for Loss of Charter Hire insurance (1972) (Revised 1993). The company market published the same conditions as CEFOR form No. 237.

By this time, the committee entrusted with the task of revising the Norwegian Plan itself was already appointed and had commenced its work. Part of its mandate was to incorporate the loss of hire conditions into the new Plan. This mandate was not restricted to merely incorporating the 1993 revision, but extended also to reviewing the conditions anew. This review resulted in the new Chapter 16 of the Norwegian 1996 Plan. Chapter 16 was amended in the 2003, 2007 and 2010 versions of the Norwegian Plan and maintained with one amendment in the Nordic Plan of 2013.  One further amendment was made in the 2016 version which, as explained under 1.4.1 above, now comprises the current loss of hire conditions used by the Nordic market.



[1] GSK was dissolved with effect from 1 January 2001. The members of GSK, including NHC, joined The Central Union of Marine Underwriters (CEFOR) from the same date, which changed name to the Nordic Association of Marine Insurers (Cefor) in 2009.