MarIus

5.4 Separate war risk insurance: The Norwegian War risk association

In the period after 1930, there was political unrest in different parts of the world. National unrest in Greece resulted in the Aegean Sea being closed to passage, and China had experienced political unrest since the abdication of the emperor in 1912. In 1935 this developed into civil war, with the right wing Chiang Kai-shek against the left wing Mao Tse-tung. Japan used this unrest to attack Manchuria and engaged in a military conflict with China that would last until 1945. Added to this was Adolf Hitler coming into power in Germany which caused a lot of concern, as well as increasing problems in Italy and Spain.^{(1) Towsen pp. 66–67.}

This political instability took place in a period which saw extensive growth of Norway as a shipping nation. The cheap and old multipurpose steam vessels were exchanged for costly motor driven liners and tank vessels. This growth and the structural changes were partly financed by borrowed capital, mostly credit given by foreign building yards.^{(2) Towsen p. 69.} The combination of political unrest and the vast Norwegian investments resulted in the establishment of the Norwegian War Risk Association in 1935 to cater for the ship owners and creditors needing to protect their new investments against the war risk.^{(3) Towsen pp. 71 ff.} The Association was modelled on the UK mutual war risk associations that continued to offer war risk insurance after World War I with no premium, except a low fee per ton for administration and dividing the war losses when they occurred.^{(4) Towsen p. 71.}

War risk insurance for Norwegian registered ships was almost without exception effected by the War Risk Association.^{(5)Commentary to Norwegian Marine Insurance Plan 1996 Version 1999, Det Norske Veritas 1999 (Commentary 1996 Version 1999), p. 348, Sjur Brækhus and Alex Rein, Håndbok i kaskoforsikring, 1993 (Brækhus/Rein) p. 56.} The Association used their own conditions – the War policy or Wpol. These conditions were not included in the 1930 or 1964 Plan, but were instead built on the Plan’s definition of war risk. The Wpol was however included as part of the 1996 Plan in chapter 15. The conditions conformed substantially to what was offered in the commercial market, but with better cover for ships registered in Norway on certain points.^{(6) Commentary 1996 Version 1999 p. 348. The added protection was in particular cover for requisition for ownership or use by a foreign state power, § 2-9 sub-clause 3 letter a, and losses which are a direct and immediate consequence of an explosion caused by the use of nuclear arms for war purposes, provided that the ship has not proceeded beyond the ordinary trading limit, cf. § 3-15, sub-paragraph 1. Damage caused by radiation or radioactive fall-out is nonetheless not covered (letter b). In later revisions, the special conditions for the Norwegian War Risk Association was included in chapter 15 section 9.} However, when the Plan was adopted for Nordic use in 2013, the special provisions for ships registered in Norway was removed from the Plan. The War Risk Association today effects insurance based on the Plan, but with better protection in several areas.^{(7) The conditions today are Insurance Conditions (01.02.2023).}