- the Mid Atlantic Mariners Club

Mid Atlantic Mariners Club
Newsletter
Spring 2008 Volume 4, Issue 1
Inside this issue
1.
Opening Article
1.
Skipper’s Corner
3.
Upcoming Events
4.
What’s Shakin
6.
Legal Article: Uberrimae Fidei
7.
Around the Marketplace
7.
A Current Thought
11.
Contact Info/Acknowledgements
12.
Membership Applications
The Skipper’s
Corner
Charlie Simmons
Gorman and Williams
It was a summer day in 2003 and my
office phone was ringing. On the other
end was a prominent face in the
Maryland marine insurance industry.
He said a move was afoot to start a MidAtlantic chapter of a mariner’s club
dedicated to the interests and needs of
the marine insurance industry.
Promising only the briefest of time
commitments, he asked that I sit on the
board of this newly formed entity. Never
one to watch, I decided to attend a
business meeting or two.
I missed the first business meeting for
the birth of my daughter. Little did I
Continued on next page
“Passing of the Paddle” Complete,
Excellent Attendance for Philly
Event, Upcoming Events
The “Passing of the Paddle” is complete.
Former Skipper and now Executive
Committee Member Damon Hostetter (left) of
ACE Recreational Marine welcomed our new
Skipper, Charlie Simmons of Gorman and
Williams into the role aboard “Moshulu” at the
Club Holiday event.
The Holiday meeting and party aboard the
“Moshulu” in Philadelphia resulted in
attendance that was filled to capacity (see
pictures from the event in this newsletter).
Attendees learned about commercial Ocean
Marine insurance and the nautical side of Philly
history, courtesy of speakers from Travelers
Ocean Marine and Ace Recreational and
Commercial Insurance. The Club’s journey
north was a success, and we are even looking
into the possibility of next year’s Holiday event
venturing into the Big Apple!
Upcoming events will be in more fun and
interesting locales (some familiar and some
new) such as our April event in Fells Point
Baltimore and our Summer Crab Feast in
Maryland at the Kent Island Yacht Club. See
“Upcoming Events” for details. We hope to see
you there!
Mid Atlantic Mariners Club
know at the time that Damon Hostetter, Lindy
Sloan, Helen Dierker, Totch Hartge, and
Alicia Shaffer had brainstormed a simple but
brilliant concept at that first meeting: bring
together all varieties of marine insurance
professionals, teach them something useful for
their daily work lives, and allow them to
network.
The next four years witnessed over sixteen
professionally presented seminars on the
widest range of marine topics, from the
sinking of the original Pride of Baltimore to
CAT response to Hurricane Katrina claims.
While the time commitment has been a bit
more than originally promised, the results
have been well worth the effort.
In December 2007 Damon Hostetter,
MAMC’s founding Skipper, elected to step
down and assume a seat on MAMC’s board of
directors. Damon’s leadership, commitment,
and wisdom will be missed. Damon’s shoes
will never completely be filled but I am
honored that the nominating committee
selected me as “next in line.”
I close this Skipper’s Corner with a heartfelt
thank you to the individuals who continue to
toil to make the Club a success: Helen
Dierker, Alicia Shaffer, Christine Wilson,
Damon Hostetter, Derek Rhymes, Alex
Kripetz, Sue Bonner, and Dirk Schwenk.
There would be no MAMC without the hard
work and commitment by these individuals.
Here’s to a prosperous 2008 and, to the sailing
crew, a good stiff breeze.
PAGE 2
Holiday Meeting/Party
Mid Atlantic Mariners Club
PAGE 3
Thursday 4/10/2008: Spring Program*
Meeting and Cocktail Reception at the Admiral Fell Inn (Fells Point,
Baltimore, Maryland)
1:00PM-7:00PM
$85 Members/$135 Non-Members
Topic:
“Our Changing Economy’s Affect on the Recreational Boating
Marketplace”
Repossession: Panel discussion including a repo
operator, lender, and maritime attorney.
Valuation: History, processes, and challenges of
determining market value, presented by Steve Knox of
Knox Marine Consultants.
*Pre-registration required; if you have not received a registration form via e-mail and
would like to attend please contact Alicia Shaffer of Zurich Global Energy at
[email protected]
July 2008: Summer Program and Crab Feast
Kent Island Yacht Club, Chester, Maryland
Details to follow in upcoming months via e-mail to our mailing list, don’t
miss this popular event!
Interested in getting on our e-mail mailing list for upcoming events,
newsletters, etc.? Send an e-mail to [email protected] with a simple
request and we will be happy to add you on!
Mid Atlantic Mariners Club
PAGE 4
Damon Hostetter has accepted the Senior Vice President position at ACE Recreational
Marine.
Rick Salway of Travelers Luxury Yacht has been appointed Chairman of the American
Institute of Marine Underwriters (AIMU) Pleasurecraft Committee.
Bob Ellis of Windsor Mount Joy Mutual Insurance Company has retired effective
12/31/07. Sandi Davidson, who had been with the company more than 30 years, has
assumed the role of Marine Manager.
Peter J Meshin has departed the Loomis Company after 22 years to establish a marine
insurance department for Berkley Mid Atlantic Group. Peter has also co-founded the
newly formed American Center Console and Sport Fish Society (ACC&SS).
Certified Sales (Yachtsalvage.com) has started a new website called
www.boathelpers.com
Markel recently released a new High-Performance program and they will soon be
introducing new coverage and rating methods for the Yacht marketplace.
Ann Brown retired from ACE Recreational Marine on January 25th, after 17 years with
the company. She was a very well-liked Senior Underwriting Assistant in the MidAtlantic region.
Changes in the Mid-Atlantic Mariners Club:
Charlie Simmons of Gorman and Williams is the new Skipper
Damon Hostetter of ACE Recreational Marine is now on the Executive Committee
Alex Kripetz of Travelers Luxury Yacht has assumed the Newsletter Committee
Chairman position and will remain Editing Director. The former Chair, Helen
Dierker of International Marine Insurance Services has moved into the First Mate
position.
We have a new mailing address:
Mid Atlantic Mariners Club
P.O. Box 4851
Baltimore, MD 21211
PAGE 5
Mid Atlantic Mariners Club
www.sealimited.com
Mid Atlantic Mariners Club
PAGE 6
Uberrimae Fidei –
Established Federal Maritime Law – Reaffirmed!
By: Robert M. Cavalier, Esquire
Lucas and Cavalier, LLC
The doctrine of uberrimae fidei “utmost good faith” is well recognized and rooted in English law – and
fully embraced in federal maritime law. Uberrimae Fidei requires a marine insurance applicant, even if
not asked, to reveal every fact within his/her knowledge which is material to the risk. An insurer may
rescind a policy if it can show either intentional misrepresentation of a fact, regardless of materiality, or
non-disclosure of a fact material to the risk, regardless of intent. The principle rests on disclosure, not
solicitation. Even if the insurer does not ask the specific question, if the insured is in possession of
material information, it must be disclosed.
Uberrimae fidei is particularly relevant to marine insurance where historically the insurer’s access to
information relevant to the risk involved was limited. The insurer traditionally lacked the practical means
to verify the accuracy or sufficiency of facts provided by the putative insured to form a basis for the
contractual terms.
Following the United States Supreme Court’s decision in Wilburn Boat the law became rather settled: if
extant federal admiralty law does not contain an applicable rule, courts are instructed to look to state
law, rather than fashioning a new federal admiralty rule or adopting one from British law. However, it is
clear the initial inquiry of the court in interpreting a policy of marine insurance is to determine whether
there is an established federal maritime law rule.
In 1991 the Fifth Circuit in Albany Ins. v. Anh Thi Kieu failed to follow long established precedent and
concluded uberrimae fidei is no longer “entrenched federal precedent” and opted to apply Texas law.
Most recently, the Ninth Circuit issued an opinion on February 11, 2008 which provided an all
encompassing analysis of the doctrine of uberrimae fidei and harshly criticized the holding of the Fifth
Circuit. Specifically, in Certain Underwriters at Lloyds, London v. Inlet Fisheries, the Alaska based
insured misrepresented information on an application concerning “pollution loss history.” Moreover, the
insured did not supply and the application did not request, information concerning the condition of the
insured’s vessels, its financial status or the fact of, or the reason for, the prior insurer’s cancellation for
failing to conduct required surveys and making premium payments. Lloyds filed a declaratory judgment
action seeking to void the policy ab inito based on uberrimae fidei. The insured argued Alaska state law
applied and pointed out Lloyds never asked for the allegedly material information. The District Court
granted Lloyds’ motion for summary judgment, which was affirmed by the Ninth Circuit.
The Ninth Circuit critically stated the Fifth Circuit’s analysis is not “persuasive” and is indeed more than
“troublesome”. The Ninth Circuit held the longstanding federal maritime doctrine of uberrimae fidei,
rather than state law, applies to marine insurance contracts. The Ninth Circuit noted the doctrine
contains reciprocal obligations to act with the utmost good faith toward one another. In this connection,
the court applauded Lloyds for refraining from refusing to renew the policy based upon unsubstantiated
rumors. Rather, Lloyds engaged in a prompt investigation which ultimately led to learning of
undisclosed material facts which warranted voiding the insurance.
For all of us involved in any aspect of marine insurance, there should be no doubt the doctrine of
uberrimae fidei is alive and well and represents established federal maritime law. However, when
handling transactions occurring within the reach of the Fifth Circuit (both state and federal) one needs to
be cognizant of the aberration demonstrated by those courts.
PAGE 7
Mid Atlantic Mariners Club
Around the Marketplace
The Miami International Yacht/Boat Shows recently wrapped up in February. The rumor mill is
swirling with reports of slow sales coming off of the Show this year (particularly 40’+), of which
the upcoming months should tell the tale. In addition to the Show, Ashmead & White
Consulting teamed up with the International Superyacht Society to present a well-attended
seminar in Miami Beach that same week. Topics included the current state of the megayacht
industry, and multiple speakers spoke on the different roles of this segment including yacht
management/repair facilities/maritime attorneys/brokers/vessel recovery groups/insurance
brokers/gender roles/innovation. –Alex Kripetz, Travelers Luxury Yacht
A Current Thought
*This issue’s submission comes from a marine surveyor.
Marine Surveying…What Needs to be Done to Restore
Professionalism
By an Anonymous Frustrated Surveyor
Lately I have been wondering how many members of the Mid-Atlantic Mariners Club who have
the opportunity to review marine survey reports (both C&V and Damage) are reaching the
conclusion that the reports they are receiving are not worth the paper (or the pixels on their
computer screen!) they are printed on. A recent article in the Jan. 2008 BoatUS Technical
Exchange by Bob Chapman, former president of INAMAR addressed the issue peripherally
and I would commend all to read it. A marine surveyor’s strict adherence to high standards of
professionalism and acquired knowledge (which was a requisite in the past) appears to have
been replaced with a “can I take a course so I can learn to fill out a form, get some business
cards printed, and take a test so I can add some letters after my name and call myself a
marine surveyor” attitude.
The problem with this current situation is that the marine surveyor and his profession are only
partially to blame. In my opinion, the industries that share the greatest responsibility for the
increasing lack of professionalism and knowledge so prevalent in the marine surveying
profession are the banking and insurance industries. They are the industries that rely most
heavily on the Marine Survey/Damage Survey reports and yet they are the ones least likely to
reject a survey report because it is not in conformance with recognized standards. It would be
Continued on next page
Mid Atlantic Mariners Club
PAGE 8
very interesting to take a poll and see how many times members of the MAMC have ever
rejected a survey because it was not adequate for their purposes. It is likely that number
would be very small in comparison with the number received.
Marine surveyors performing routine Condition & Valuation/Pre-Purchase Surveys religiously
state that they employ the standards of the American Boat & Yacht Council, the National Fire
Protection Association, along with the regulations contained in the Code of Federal
Regulations. Yet on more than one occasion well-regarded surveyors were heard to explain
and justify to a group of insurance professionals that in reality they apply their own arbitrary
criteria when deciding how to apply accepted standards to the conditions they find. How many
readers of these surveys would know that? I can assure you that none of these surveyors
state in the preamble to their survey report, “I use the USCG, ABYC, & NFPA regulations and
standards as I deem appropriate, but I’m not going to tell you where.”
Example: How many agents and underwriters would reject a survey because there isn’t a fixed
fire extinguishing system on the boat, but no recommendation to install one? As far back as
1968 and probably before that, the NFPA 302 standard required a fixed fire extinguishing
system on all boats, both recreational and commercial with an enclosed machinery space.
(Smaller boats can actually get away with the alternative of a fire port and a portable gaseous
extinguisher.) If it is in the standards, it is the obligatory responsibility of the surveyor to note
its presence or lack thereof. If one is present, he should note whether it is installed in
accordance with the manufacturer’s instructions and attendant Coast Guard regulation for
servicing. If one is not present, the surveyor MUST issue a recommendation that one be
installed. It is not and can not be within his purview to do otherwise, and any surveyor who
overlooks this vital piece of safety equipment is derelict in his duties meaning his survey does
not conform with acceptable parameters of surveying and should not be accepted. I would
dare say that if he is overlooking such a major item of safety, where else is he applying his
own arbitrary standards? And this is just one example. Underwriters and agents have to be
conversant in the regulations and standards, so they can then reject surveys that do not
represent the highest levels of professionalism and knowledge.
Another example, I reviewed a recent survey report on a refurbished older sportfishing boat
that read like a personal love affair with the boat. The preamble was loaded with superlatives
and verbiage that probably came from his word-processor Thesaurus. It should not be
necessary for the reader of such a report to go any further in order to realize that the surveyor
had so prejudiced himself and pre-judged the conditions found as to make the report
worthless. While he had no recommendations and reported the boat as “Bristol”, by simply
reading the report and having knowledge of the standards I generated eight recommendations.
In all likelihood, a physical survey by a competent surveyor would generate a lot more.
The real question then becomes, why aren’t more insurance company and bank underwriters
rejecting surveys from less than competent individuals who just happen to call themselves
marine surveyors? Why aren’t these companies requiring certifications from NAMS, SAMS
and other organizations that purportedly certify their members to continually monitor and
maintain at a minimum and hopefully raise the standards of their membership? Unless and
until it becomes impossible for surveyors to have inept work accepted by the two organizations
that rely on them most heavily, the banking and insurance industries, there is no impetus to
change the continually deteriorating level of professionalism within the profession.
Continued on next page
Mid Atlantic Mariners Club
PAGE 9
It would be refreshing if every member of the MAMC who receives and reviews condition/
valuation & pre-purchase survey reports did so with the idea that the sole intention of the writer
of that report was to deceive them into believing a worthless piece of junk is a boat they should
consider underwriting as a “good marine risk.” Believe it or not, that is what more and more
surveyors every day are doing and have been doing for at least the last 10-15 years. A large
number of surveyors have no concern for the boat buyer/owner, the agent, the bank, or the
insurance company. Their sole objective is to ensure that they do not upset the broker who
provides them with referrals and from whom most of their income is derived. If you read
survey reports critically and look carefully at what is being said and compare that with what
should have been said, it is likely MAMC members will quickly develop a list of surveyors
whose reports they will not accept. The more underwriters and claims people who do that, the
better it is going to be for the insurance and banking industries, and ultimately, the surveying
profession.
Although in this article I have primarily focused on reports received by underwriters, the
damage surveys being submitted are even of poorer quality in most instances. A claims
adjuster was heard to remark, “We deny claims for excellent reasons yet we ultimately wind up
paying them, so why bother?” Obviously the claim was not denied “for excellent reasons”,
because many times when confronted with the reasons why the claim should be paid under
the policy (reasons overlooked by the “surveyor” assigned to handle the investigation), it
becomes obvious the “surveyor” did not do as expected and gather the pertinent facts
necessary to withstand a challenge. A surveyor’s sole responsibility on a damage survey is to
gather all of the facts necessary to determine the “Cause, Nature, and Extent of the Damage.”
In most instances, they fail in the most basic of all claims investigation prerequisites; they
never definitively determine the proximate cause of loss! It is not a part of their assignment to
try and develop theories around which they know a claim may be denied such as wear and
tear, gradual deterioration, latent defect, manufacturing defect, etc. It is instead their
responsibility to the boat owner and their client, the insurance company, to look at every
possible reason why a policy should respond! And only after they can’t find any reason for
response should it be assessed that a claim denial will withstand a court challenge.
Only when banks, insurance company underwriters/claims adjusters and their agents take a
more pro-active role in the review and rejection of survey reports will the overall quality of
marine survey reports and damage survey reports return to a level commensurate with the
value of the risks being evaluated.
We’re always looking for a “Current Thought” from you, the marine
insurance industry for upcoming issues of this newsletter. If there is
something on your mind, positive or negative that you would like to
share with your colleagues please submit an article for review by the
newsletter committee. As always, anonymity is not a problem. Articles
can be submitted for consideration by e-mailing:
[email protected].
PAGE 10
Mid Atlantic Mariners Club
This fourth edition of our MAMC newsletter will be
distributed to all of our Club members, numerous nonmembers, and marine-related businesses. For those
interested in advertising in an upcoming issue, we will be
offering the following space on a per-issue basis:
FULL PAGE AD: $250
QUARTER-PAGE AD: $125
BUSINESS CARD SIZE AD: $75
Interested parties please send a request via e-mail to
[email protected]
PAGE 11
Mid Atlantic Mariners Club
Mid-Atlantic Mariners Club Contact Information:
Regular Mail (new address):
MAMC
PO BOX 4851
Baltimore MD 21211
Website: www.marinersclub.net
E-Mail:
[email protected]
Acknowledgements
MAMC Officers
Skipper:
First Mate:
Program Director:
Purser:
Yeoman:
Charlie Simmons
Helen Dierker
Derek Rhymes
Alicia Shaffer
Christine Wilson
Gorman and Williams
International Marine Insurance Services
All Boat & Yacht Inspections
Zurich Global Energy
Hartge Insurance Associates
Program/Facility Management:
Assistant Program Director
Activities Director:
Sue Bonner
Vacant Position
AIG Private Client Group
Newsletter Committee:
Committee Chair/Editing Director Alex Kripetz
Legal Editor and Advisor
Charlie Simmons
Distribution Director/Editing
Christine Wilson
Travelers Luxury Yacht
Gorman & Williams
Hartge Insurance Associates
We would also like to thank the following individuals for their ongoing support of our club:
Randy Renn
Accredited Marine Surveyor AMS®
Dirk Schwenk
Lochner and Schwenk, LLC
PAGE 12
Mid Atlantic Mariners Club
Mid-Atlantic Mariners Club
APPLICATION FOR INDIVIDUAL MEMBERSHIP
Mid-Atlantic Mariners Club members in good standing must sponsor your application. Membership dues of $100
must accompany this application. Please mail back application and payment made out to “Mid-Atlantic
Mariners Club” to: MAMC, PO BOX 4851, Baltimore MD 21211. You will then be contacted regarding
membership.
Name: ________________________________________________________________
Company Name: ________________________________________________________
Mailing Address: ________________________________________________________
City, State, Zip: _________________________________________________________
Phone: ____________________________ Fax: ______________________________
E-mail Address: _____________________ Web Address: _______________________
Job Title or Description: __________________________________________________
Describe your involvement in the Marine Industry: _____________________________
_______________________________________________________________________
Why do you want to be a member of the Mariners Club? ________________________
_______________________________________________________________________
What name would you like on your badge? ___________________________________
Would you be interested in serving on committees or the leadership of the club? ______
1st Sponsor Name: ______________________
Signature: ____________________
2nd Sponsor Name: ______________________
Signature: ____________________
Applicant Signature: _________________________ Date: ________________
Approved by: ____________________________________ Date: _________________
Dues Paid: _____________________
Check No. _________________________
PAGE 13
Mid Atlantic Mariners Club
Mid-Atlantic Mariners Club
APPLICATION FOR CORPORATE MEMBERSHIP
Mid-Atlantic Mariners Club members in good standing must sponsor your application. Membership dues
of $_____ must accompany this application. ($500 for 10 or less employees, $1,000 for over 10 employees).
Please mail back application and payment made out to “Mid-Atlantic Mariners Club” to MAMC, PO BOX
4851, Baltimore MD 21211. You will then be contacted regarding membership.
Company Name: ____________________________ Contact Person: ____________
Mailing Address: ______________________________________________________________________
Phone: __________________________
Fax: ______________________________
E-mail Address: _____________________________ Web Address: _____________________________
Job Title or Description: __________________________________________________
Describe your involvement in the Marine Industry: ___________________________________________
_____________________________________________________________________________________
Why do you want to be a member of the Mariners Club? _____________________________________
Initial list of your employees:
Name: ________________________________ e-mail:________________________________________
Name: ________________________________ e-mail:________________________________________
Name: ________________________________ e-mail:________________________________________
Name: ________________________________ e-mail:________________________________________
Name: ________________________________ e-mail:________________________________________
What name would you like on your badges? ________________________________________________
Would anyone in your firm be interested in serving on committees or the leadership of the club?
_____________________________
1st Sponsor Name: _________________________
Signature: _____________________________
2nd Sponsor Name: _________________________
Signature: _____________________________
Signature of contact person: ____________________________ Date: ________________
Approved by: ____________________________________ Date: _________________
Dues Paid: _____________________
Check No. _________________________