'ËĘ ÁflÁŸĸĘ∑§ •ı⁄U Áfl∑§Ę‚ Ž˝ĘÁœ∑§⁄UáĘ - IRDA

vantage pointNeed for the Eagle’s Eye- Marine Insurance‘While insurance profession, in general, calls for a high degree of care in order to thwart the designsof unscrupulous elements; there are additionally sensitive areas of operation like Marine insurancethat demand their best attention’ says U. Jawaharlal.Insurable interest is a strong pedestalon which the edifice of insurancestands; and thus it is essential thatbefore an insurance contract is concluded,the validity of insurable interest isestablished. In the normal course of aninsurance transaction, it does not pose agreat problem as the ownership of anasset can be verified without greatdifficulty. However, in the case of suchgoods where the transfer of ownershipoccurs seamlessly, insurers have to becareful as to who exactly holds insurableinterest. Marine insurance is one area inwhich this aspect has to be consideredwith a high degree of precision.Further, the terms or conditions oftransport of the goods that are beingforwarded through ocean liners/seavoyages also decide the ownershipthereof at different times of transport.Thus the underwriters have to be verycareful while underwriting the risk; andneed to specify the terms of acceptancemore accurately. As has been emphasizedfrom time to time, the point that thebankers of exporters and importers,however reputed they are, have beenundertaking the totality of the transactionis not a sufficient factor for the cleanlinessof the deal. Uniform Customs and Practicefor Documentary Credits (UCPDC) issuedby the International Chamber ofCommerce specifically and manifestlydeclares that bankers deal in documentsalone and that their responsibility doesnot go beyond the verification ofdocuments.Apart from exercising the diligenceassociated with verification of thedocuments and goods, Marine insurersshould be doubly conscious of the factthat the line of activity is additionallyvulnerable to frauds and dubioustransactions. Taking advantage of a fewunscrupulous elements in the domain ofinternational trade, fraudsters mayparade inferior or spurious goods thatmay not deserve to be part of crossbordertrade; and project the entireepisode as a genuine merchanttransaction. Especially, when the vesselsare very old and not highly sea-worthy,underwriters have to be very careful inensuring that the interest of the shippersis really in completing the formalities of agenuine trade deal. There is enoughevidence to prove that most of theabandoned adventures indicate theinvolvement of vessels and ships thathave outlived their lifetime; and that theentire transaction was only a ‘make-up’for a hidden fraud.Inland transportation of goods is also acomponent of Marine insurance anddemands the best attention of insuranceprofessionals. While the vulnerabilitiesassociated with marine adventures maynot be directly applicable in the case ofroad transport, underwriters, all the same,have to be careful about the genuinenessof the transported commodity; and haveto be guided by the reputation that thetransport operators carry.‘Marine insurance’ will once again be thefocus of the next issue of the Journal. Wewill get to see a fresh set of articlesfocusing on various aspects associatedwith the challenges of the subject.‘Marine Insurance'in the next issue...irda journal October 201221