The Pooling Agreement

Although the Group clubs compete with each other for business, it is to the benefit of all shipowners insured by Group clubs for the clubs to pool their larger risks. Pooling is regulated by the Pooling Agreement which defines the risks that can be pooled and how losses are to be shared between the participating clubs. The Pool provides a mechanism for sharing all claims in excess of US$ 8 million up to, currently, approximately US$ 6.9 billion.

The Pooling Agreement is an agreement between the clubs to mutually reinsure each other by sharing claims between themselves. There is no premium paid between the clubs under the agreement, and claims are simply shared in agreed proportions according to formulae.

Because Group clubs share claims through the pooling system, they have a common interest in loss prevention and control, and in the maintenance of quality standards throughout the membership.

The Pooling Agreement sets out:

• the principles on which claims can be pooled
• the types of claim which can be pooled
• the types of claim which are excluded from pooling
• the method by which claims are calculated for pooling purposes
• the contribution formulae
• provision for new applications to the pool