Common use of Release Calls Clause in Contracts

Release Calls. 8.1 The purpose of a release call is to provide an Operator who transfers a vessel from a Holding Club with the option of crystallising his liabilities to the Holding Club at the point of transfer, rather than being subject during the period prior to closure of the relevant open policy years to an on-going liability to cover his share of the total liabilities incurred by the Holding Club in respect of the period the vessel was insured by the Holding Club. Each Club shall publish at least annually a statement of its release call percentages for each open policy year or as frequently as release call percentages are reviewed and/or changed each year. The statement shall include an explanation of the factors that the Board of Directors or Committee of the Club has taken into account in setting the release call percentages which shall reflect its assessment of the risk that the published levels of expected premiums may be exceeded and, in making such assessment the Club shall take account of objective actuarial information regarding: (a) premium risk (the risk that the premiums to be charged by a Club in respect of the current policy year are insufficient to cover the claims that arise in respect of that policy year); (b) reserve risk (the risk that the claims reserves (technical provisions) established by a Club in respect of past policy years prove to be insufficient to cover the ultimate cost of the claims, for example resulting from a significant unexpected increase in the normal pattern of frequency of claims and/or in the severity of claims in relation to those past years); (c) catastrophe risk (the risk of one or more claims running into hundreds of millions of dollars or more); (d) market risk (the risk of losses on investments, liquidity risk, and currency risk); (e) counterparty default risk (the risk that a Club is unable to recover amounts due from a member, a deposit-taker such as a bank, or a reinsurer, including in relation to reinsured retained risks, failure to recover from other Clubs through the pool mechanism, or failure to recover from one or more participants in the Group reinsurance programme); and (f) operational risk (the risk of losses arising from inadequate or failed internal processes, people or systems or from external events. It includes losses arising, for example, by computer failure, loss of premises through fire or terrorism, etc. or other operational failure, such as negligence by management); in each case in relation to the liabilities of the Club for the relevant open policy year. One statement annually shall include the Club's release call percentages for the five preceding policy years. For the avoidance of doubt, nothing in this subclause shall prevent a Club from setting a release call percentage of zero. 8.2 When an Operator transfers any vessel from a Holding Club and a release call is required by the Holding Club, the Holding Club shall: (a) if the Operator so requests accept in lieu of a release call a guarantee given or confirmed by a bank acceptable to the Holding Club for the Operator’s liability to pay future calls provided that the Operator shall not be required to provide a guarantee for an amount that exceeds the amount of the release call required; (b) allow the Operator, within 20 working days of the amount of the release call being notified to the Operator or his representative, to request the Committee to determine in relation to that release call: (i) whether the release call required is calculated by reference to the release call percentage fixed by the Board of Directors or Committee of the Holding Club in accordance with subclause 1 and applicable to all members of the Holding Club in similar circumstances and, if not, to require it to be so calculated promptly by the Holding Club; and (ii) where part of the Operator's fleet remains entered with the Holding Club, whether or not it was reasonable for the Holding Club to require a release call in relation to the transferring vessel or vessels concerned, PROVIDED THAT the Operator shall agree to make his request in the form of a reference to arbitration incorporating in his agreement the provisions of Schedule 2. 8.3 If the Holding Club so requires, it shall be a condition of the Operator's right to request a determination under subclause 2(b) that the Operator deposits in escrow the amount of the release call required by the Holding Club or provides a bank guarantee as aforesaid for that amount. If the Committee requires the Holding Club under subclause 2(b)(i) to recalculate the release call, as soon as practicable after the Holding Club has made the required calculation of the release call, it shall arrange for the deposit or guarantee to be refunded or released to the extent of the difference, together (in the case of a deposit) with interest earned on the principal sum released. If the Committee determines under subclause 2(b)(ii) that a release call was not reasonably required, as soon as practicable after the Holding Club is notified of the determination of the Committee, the Holding Club shall arrange for the deposit or guarantee to be refunded or released, together (in the case of a deposit) with interest earned on the principal.

Release Calls. 8.1 The purpose of a release call is to provide an Operator who transfers a vessel from a Holding Club with the option of crystallising his liabilities to the Holding Club at the point of transfer, rather than being subject during the period prior to closure of the relevant open policy years to an on-going liability to cover his share of the total liabilities incurred by the Holding Club in respect of the period the vessel was insured by the Holding Club. Each Club shall publish at least annually a statement of its release call percentages for each open policy year or as frequently as release call percentages are reviewed and/or changed each year. The statement shall include an explanation of the factors that the Board of Directors or Committee of the Club has taken into account in setting the release call percentages which shall reflect its assessment of the risk that the published levels of expected premiums may be exceeded and, in making such assessment the Club shall take account of objective actuarial information regarding: (a) premium risk (the risk that the premiums to be charged by a Club in respect of the current policy year are insufficient to cover the claims that arise in respect of that policy year); (b) reserve risk (the risk that the claims reserves (technical provisions) established by a Club in respect of past policy years prove to be insufficient to cover the ultimate cost of the claims, for example resulting from a significant unexpected increase in the normal pattern of frequency of claims and/or in the severity of claims in relation to those past years); (c) catastrophe risk (the risk of one or more claims running into hundreds of millions of dollars or more); (d) market risk (the risk of losses on investments, liquidity risk, and currency risk); (e) counterparty default risk (the risk that a Club is unable to recover amounts due from a member, a deposit-taker such as a bank, or a reinsurer, including in relation to reinsured retained risks, failure to recover from other Clubs through the pool mechanism, or failure to recover from one or more participants in the Group reinsurance programme); and (f) operational risk (the risk of losses arising from inadequate or failed internal processes, people or systems or from external events. It includes losses arising, for example, by computer failure, loss of premises through fire or terrorism, etc. or other operational failure, such as negligence by management); in each case in relation to the liabilities of the Club for the relevant open policy year. One statement annually shall include the Club's release call percentages for the five preceding policy years. For the avoidance of doubt, nothing in this subclause shall prevent a Club from setting a release call percentage of zero. 8.2 When an Operator transfers any vessel from a Holding Club and a release call is required by the Holding Club, the Holding Club shall: (a) if the Operator so requests accept in lieu of a release call a guarantee given or confirmed by a bank acceptable to the Holding Club for the Operator’s liability to pay future calls provided that the Operator shall not be required to provide a guarantee for an amount that exceeds the amount of the release call required; (b) allow the Operator, within 20 working days of the amount of the release call being notified to the Operator or his representative, to request the Committee to determine in relation to that release call: (i) whether the release call required is calculated by reference to the release call percentage fixed by the Board of Directors or Committee of the Holding Club in accordance with subclause 1 and applicable to all members of the Holding Club in similar circumstances and, if not, to require it to be so calculated promptly by the Holding Club; andthe (ii) where part of the Operator's fleet remains entered with the Holding Club, whether or not it was reasonable for the Holding Club to require a release call in relation to the transferring vessel or vessels concerned, PROVIDED THAT the Operator shall agree to make his request in the form of a reference to arbitration incorporating in his agreement the provisions of Schedule 2. 8.3 If the Holding Club so requires, it shall be a condition of the Operator's right to request a determination under subclause 2(b) that the Operator deposits in escrow the amount of the release call required by the Holding Club or provides a bank guarantee as aforesaid for that amount. If the Committee requires the Holding Club under subclause 2(b)(i) to recalculate the release call, as soon as practicable after the Holding Club has made the required calculation of the release call, it shall arrange for the deposit or guarantee to be refunded or released to the extent of the difference, together (in the case of a deposit) with interest earned on the principal sum released. If the Committee determines under subclause 2(b)(ii) that a release call was not reasonably required, as soon as practicable after the Holding Club is notified of the determination of the Committee, the Holding Club shall arrange for the deposit or guarantee to be refunded or released, together (in the case of a deposit) with interest earned on the principal.

Release Calls. 8.1 The purpose of a release call is to provide an Operator who transfers a vessel from a Holding Club with the option of crystallising his liabilities to the Holding Club at the point of transfer, rather than being subject during the period prior to closure of the relevant open policy years to an on-going liability to cover his share of the total liabilities incurred by the Holding Club in respect of the period the vessel was insured by the Holding Club. Each Club shall publish at least annually a statement of its release call percentages for each open policy year or as frequently as release call percentages are reviewed and/or changed each year. The statement shall include an explanation of the factors that the Board of Directors or Committee of the Club has taken into account in setting the release call percentages which shall reflect its assessment of the risk that the published levels of expected premiums may be exceeded and, in making such assessment the Club shall take account of objective actuarial information regarding: (a) premium risk (the risk that the premiums to be charged by a Club in respect of the current policy year are insufficient to cover the claims that arise in respect of that policy year); (b) reserve risk (the risk that the claims reserves (technical provisions) established by a Club in respect of past policy years prove to be insufficient to cover the ultimate cost of the claims, for example resulting from a significant unexpected increase in the normal pattern of frequency of claims and/or in the severity of claims in relation to those past years); (c) catastrophe risk (the risk of one or more claims running into hundreds of millions of dollars or more); (d) market risk (the risk of losses on investments, liquidity risk, and currency risk); (e) counterparty default risk (the risk that a Club is unable to recover amounts due from a member, a deposit-taker such as a bank, or a reinsurer, including in relation to reinsured retained risks, failure to recover from other Clubs through the pool mechanism, or failure to recover from one or more participants in the Group reinsurance programme); and (f) operational risk (the risk of losses arising from inadequate or failed internal processes, people or systems or from external events. It includes losses arising, for example, by computer failure, loss of premises through fire or terrorism, etc. or other operational failure, such as negligence by management); in each case in relation to the liabilities of the Club for the relevant open policy year. One statement annually shall include the Club's release call percentages for the five preceding policy years. For the avoidance of doubt, nothing in this subclause shall prevent a Club from setting a release call percentage of zero. 8.2 When an Operator transfers any vessel from a Holding Club and a release call is required by the Holding Club, the Holding Club shall: (a) if the Operator so requests requests, accept in lieu of a release call a guarantee given or confirmed by a bank acceptable to the Holding Club for the Operator’s 's liability to pay future calls provided that the Operator shall not be required to provide a guarantee for an amount that exceeds the amount of the release call required; (b) allow the Operator, within 20 working days of the amount of the release call being notified to the Operator or his representative, to request the Committee to determine in relation to that release call: (i) whether the release call required is calculated by reference to the release call percentage fixed by the Board of Directors or Committee of the Holding Club in accordance with subclause 1 and applicable to all members of the Holding Club in similar circumstances and, if not, to require it to be so calculated promptly by the Holding Club; and (ii) where part of the Operator's fleet remains entered with the Holding Club, whether or not it was reasonable for the Holding Club to require a release call in relation to the transferring vessel or vessels concerned, PROVIDED THAT the Operator shall agree to make his request in the form of a reference to arbitration incorporating in his agreement the provisions of Schedule 2. 8.3 If the Holding Club so requires, it shall be a condition of the Operator's right to request a determination under subclause 2(b) that the Operator deposits in escrow the amount of the release call required by the Holding Club or provides a bank guarantee as aforesaid for that amount. If the Committee requires the Holding Club under subclause 2(b)(i) to recalculate the release call, as soon as practicable after the Holding Club has made the required calculation of the release call, it shall arrange for the deposit or guarantee to be refunded or released to the extent of the difference, together (in the case of a deposit) with interest earned on the principal sum released. If the Committee determines under subclause 2(b)(ii) that a release call was not reasonably required, as soon as practicable after the Holding Club is notified of the determination of the Committee, the Holding Club shall arrange for the deposit or guarantee to be refunded or released, together (in the case of a deposit) with interest earned on the principal.

Release Calls. 8.1 The purpose of a release call is to provide an Operator who transfers a vessel from a Holding Club with the option of crystallising his liabilities to the Holding Club at the point of transfer, rather than being subject during the period prior to closure of the relevant open policy years to an on-going liability to cover his share of the total liabilities incurred by the Holding Club in respect of the period the vessel was insured by the Holding Club. Each Club shall publish at least annually a statement of its release call percentages for each open policy year or as frequently as release call percentages are reviewed and/or changed each year. The statement shall include an explanation of the factors that the Board of Directors or Committee of the Club has taken into account in setting the release call percentages which shall reflect its assessment of the risk that the published levels of expected premiums may be exceeded and, in making such assessment the Club shall take account of objective actuarial information regarding: (a) premium risk (the risk that the premiums to be charged by a Club in respect of the current policy year are insufficient to cover the claims that arise in respect of that policy year); (b) reserve risk (the risk that the claims reserves (technical provisions) established by a Club in respect of past policy years prove to be insufficient to cover the ultimate cost of the claims, for example resulting from a significant unexpected increase in the normal pattern of frequency of claims and/or in the severity of claims in relation to those past years); (c) catastrophe risk (the risk of one or more claims running into hundreds of millions of dollars or more); (d) market risk (the risk of losses on investments, liquidity risk, and currency risk); (e) counterparty default risk (the risk that a Club is unable to recover amounts due from a member, a deposit-taker such as a bank, or a reinsurer, including in relation to reinsured retained risks, failure to recover from other Clubs through the pool mechanism, or failure to recover from one or more participants in the Group reinsurance programme); and (f) operational risk (the risk of losses arising from inadequate or failed internal processes, people or systems or from external events. It includes losses arising, for example, by computer failure, loss of premises through fire or terrorism, etc. or other operational failure, such as negligence by management); in each case in relation to the liabilities of the Club for the relevant open policy year. One statement annually shall include the Club's release call percentages for the five preceding policy years. For the avoidance of doubt, nothing in this subclause shall prevent a Club from setting a release call percentage of zero. 8.2 When an Operator transfers any vessel from a Holding Club and a release call is required by the Holding Club, the Holding Club shall: (a) if the Operator so requests accept in lieu of a release call a guarantee given or confirmed by a bank acceptable to the Holding Club for the Operator’s liability to pay future calls provided that the Operator shall not be required to provide a guarantee for an amount that exceeds the amount of the release call required; (b) allow the Operator, within 20 working days of the amount of the release call being notified to the Operator or his representative, to request the Committee ; to determine in relation to that release call: (i) whether the release call required is calculated by reference to the release call percentage fixed by the Board of Directors or Committee of the Holding Club in accordance with subclause 1 and applicable to all members of the Holding Club in similar circumstances and, if not, to require it to be so calculated promptly by the Holding Club; and (ii) where part of the Operator's fleet remains entered with the Holding Club, whether or not it was reasonable for the Holding Club to require a release call in relation to the transferring vessel or vessels concerned, PROVIDED THAT the Operator shall agree to make his request in the form of a reference to arbitration incorporating in his agreement the provisions of Schedule 2. 8.3 If the Holding Club so requires, it shall be a condition of the Operator's right to request a determination under subclause 2(b) that the Operator deposits in escrow the amount of the release call required by the Holding Club or provides a bank guarantee as aforesaid for that amount. If the Committee requires the Holding Club under subclause 2(b)(i) to recalculate the release call, as soon as practicable after the Holding Club has made the required calculation of the release call, it shall arrange for the deposit or guarantee to be refunded or released to the extent of the difference, together (in the case of a deposit) with interest earned on the principal sum released. If the Committee determines under subclause 2(b)(ii) that a release call was not reasonably required, as soon as practicable after the Holding Club is notified of the determination of the Committee, the Holding Club shall arrange for the deposit or guarantee to be refunded or released, together (in the case of a deposit) with interest earned on the principal.