Volume 2 - ElectricCanadian.com

APPENDIX III.MARINE INSURANCE DURING THE GREAT WAR.MEMORANDUM REGARDING THE MARINE AND WAR RISKINSURANCE PLAN OF THE BRITISH GOVERNMENT.(Drawn up by Mr. J. W. Flavelle 1 in August, 1914)Neither Lloyds nor any of the marine insurance companiesat any time issue policies covering war risks upon the hulls ofships, but do issue policies covering war risk upon the cargoescontained in the hulls. Because such war risks on hulls cannotbe written, there have grown up among shipowners powerfulmutual syndicates and it isfrom these that insurance againstwar risks has been secured for many years. When the BritishGovernment, therefore, was considering the whole problem,it entered into conference, and afterwards into a workingarrangement, with these powerful mutual organizations as faras insurance upon hulls is concerned.The arrangements as completed are:1. The Government and the mutual syndicates assumewar risk and issue a policy covering ships' hulls, the Governmentbeing responsible for eighty per cent, and the mutualassociation for twenty per cent., the premium being dividedbetween the two bodies pro rota to the insurance. I do notknow whose policy issues upon the hulls, but the Government'sresponsibility for eighty per cent, is assured.2. The Government assumes the full underwriting of thecargoes, and the Government's policyis issued covering theinsurance.3. Under the arrangement the maximum rate is fixed atfive guineas per cent, and the minimum rate at one 'guinea percent., as far as cargoes are concerned. What the rate is on theWow Sir Joseph Flavelle, Bart.