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The Government gazetted today (April 22) the Merchant Shipping (Local Vessels) (Amount of Insurance Cover) (Amendment) Notice 2016 to increase the minimum amounts of liability cover for the compulsory third party risks insurance of local vessels.
It is mandatory for a local vessel to be insured against third party risks in respect of deaths or personal injuries up to a specified minimum amount of liability cover. "The Amendment Notice increases the statutory minimum amount of liability cover, which has not been adjusted since 2007, to accord better protection to passengers," a spokesman for the Marine Department said.
The minimum liability cover for different types of vessels is to be increased as follows:
* From $5 million to $10 million for local vessels permitted to carry more than 12 passengers, except Class I primitive vessels and Class IV vessels not let for hire or reward; and
* From $1 million to $5 million for local vessels permitted to carry 12 or less than 12 passengers, Class I primitive vessels and Class IV vessels not let for hire or reward.
For local vessels with their policies of insurance made and in force immediately before September 1, 2016, the current statutory minimum amount of liability cover will continue to be applicable until (a) the date of expiry of the policy; (b) the expiry of one year beginning on September 1, 2016; or (c) the terms or conditions of the policy are altered in any way that would cause the policy to cease to be in compliance with the current statutory requirements, whichever is the earliest.
The spokesman said the amendments were made after reviewing factors including claims statistics, insurance companies' indicated risk capacity, and affordability within the trade.
"The department has consulted and received support from the Local Vessels Advisory Committee and the Legislative Council Panel on Economic Development in May 2015 on the amendments. While the proposed increase in the minimum amount of compulsory third party risks insurance liability cover would incur extra costs to the operators of local vessels, it could provide better protection for the passengers. The amount of extra costs is also acceptable to the industry," the spokesman added.
The Amendment Notice will be tabled in the Legislative Council on April 27 for negative vetting. Subject to negative vetting by the Legislative Council, it will come into operation on September 1.
Ends/Friday, April 22, 2016
Issued at HKT 12:06
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