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Rule 23 Termination by a Member

A Member may terminate the entry with effect from the end of the Policy Year in respect of one or more Ships by giving written notice thereof prior to 20 January. Except with the agreement of the Association, a Ship may not be withdrawn nor may notice of termination be given with effect from any other date.  


(A) A Member may terminate… (Rule 23)
Unless an entry is terminated in accordance with the Rules, the cover provided by the Association continues automatically from Policy Year to Policy Year.1 Rule 23 provides the only circumstances in which a Member may unilaterally terminate the entry. However, provided that he complies with the formal requirements of the Rule, the Member can terminate for any reason whatsoever and need not give reasons for the termination. The effect of termination of cover is described in Rule 26. 

(B) ...with effect from the end of the Policy Year... (Rule 23)
Provided written notice is given prior to 20 January, the termination will take effect from the end of the Policy Year, i.e. from noon GMT on 20 February. The Member can give notice at any time prior to the 20 January but the entry will not terminate before noon GMT on 20 February unless the Association so agrees.2 

(C) ...written notice…prior to 20 January... (Rule 23)
In order to exercise his right to terminate an entry unilaterally, a Member must give notice in writing before the end of the Policy Year, that is, prior to 20 January. Such notice of termination has legal effect when it is received by the Association or its designated manager Gard AS in Arendal, Norway or any subsidiary office of Gard AS or branch office of the Association. Normally, the Member should submit such notice to the underwriter or underwriting unit assigned to the Member. However, service of the notice on a broker is not sufficient to constitute service on the Association as a broker is deemed to be the agent of the Member.3 

(D) ...in respect of one or more Ships... (Rule 23)
A Member that has entered more than one Ship may terminate the entry of one or all of his Ships by one single written notice to the Association. 

(E) ...a Ship may not be withdrawn…with effect from any other date. (Rule 23)
The reason why a Ship may not be withdrawn or why a notice of termination cannot take effect at any time other than at the end of the Policy Year is because the Association will have entered into commitments, such as reinsurance arrangements, on the premise that entries will continue for the full Policy Year. However, if this provision is shown to cause material hardship or prejudice to the Member, the Association may agree that the termination of the entry can take effect from an earlier date on specific terms to be agreed with the Member.


1 See the Guidance to Rule 4.
2 See (E) below.
3 See the Guidance to Rule 3.