Insurers May Deposit Insurance Payments Under The Nordic Plan

• Published date: 02 August 2023
• Subject Matter: Insurance, Litigation, Mediation & Arbitration, Transport, Marine/ Shipping, Insurance Laws and Products, Arbitration & Dispute Resolution
• Law Firm: Wikborg Rein
• Author: Oddbj'rn Slinning and Halvard Saue

In the first arbitration award known to have been rendered under the new procedural rules of the Nordic Offshore and Maritime Arbitration Association (NOMA), the tribunal clarified that the insurers' right under Norwegian insurance law to deposit insurance payments with liberating effect, also applies to co-insurance pursuant to the Nordic Marine Insurance Plan (Nordic Plan).

Wikborg Rein successfully defended insurers against a co-insured bareboat charterer's claim for direct payment.

The award assessed the applicability of the Norwegian Insurance Contracts Act of 1989 (NICA), and also examined the co-insureds' rights pursuant to:

• Barecon 2001, as amended
• Loss Payable Clauses, as agreed, and
• The Nordic Plan, Chapter 8

The arbitration award, which was issued on 19 December 2022, is the first award known to have been rendered under NOMA rules, since their implementation with clause 1-4B of the 2019 version of the Nordic Plan.

NICA section 7-4

According to section 7-4 of the NICA, a co-insured will not be able to object to the insurer placing the insurance payment in a bank account where it will be held at the joint disposal of the policyholder and the co-insured. By making the deposit, the insurer is considered to have satisfied its payment obligations under the relevant policy regardless of the...