Release calls are a percentage of the advance call proportion of the estimated total call for the relevant policy years and are in addition to any uncollected part of the deferred call levied for the relevant policy year.
In determining those release calls, and in accordance with Clause 8 of the 2013 International Group Agreement, an actuarial assessment was undertaken of (i) premium risk, (ii) reserve risk, (iii) catastrophe risk, (iv) market risk, (v) counterparty risk and (vi) operational risk.
Release calls are usually levied in the following circumstances:
- When a ship is sold and the Managers are concerned about the Member’s ability to pay future deferred calls;
- At the request of a Member when a ship is sold. This is typical when a single-ship Member wishes to wind up its affairs;
- When a Member withdraws or sells all ships that have been entered in the Association;
- When part of a fleet is withdrawn by a Member at renewal owing to an adverse claims record.
Given the capital strength of the Association and with reference to the factors relevant when setting release calls the Board decided at its meeting on 16 October 2018 that, for present, release calls be set at nil for all open years and the 2019/20 policy year. In summary, the Board set the following release call percentages:
- 2016/17 NIL
- 2017/18 NIL
- 2018/19 NIL
- 2019/20 NIL
These percentages will be reviewed further in 12 months’ time.