Under the new regulations of the Directorate General of Maritime Affairs, P&I insurance companies wishing to be included in the list of LYBS registered P&I insurance organizations must complete their applications by February 20, 2025. Companies that do not meet the required conditions by this date will be removed from the LYBS system, and the P&I policies issued by these companies will be considered invalid. This means that vessels with such insurance will not be able to enter and exit ports, or even dock. A detailed examination of the matter is as follows.
Regulation and Legal Obligations
P&I insurance is mandatory for certain types of vessels in accordance with international standards, and it is required for all ships with a gross tonnage (GT) of 300 or more that enter or exit Turkish maritime jurisdiction. Additionally, a valid P&I policy is required for vessels passing through the Turkish Straits. The Directorate General of Mari.me Affairs has announced that all ships covered by a valid policy from insurance companies listed in the annual updated "List of Recognized P&I Insurers" meet this requirement. However, for ships insured by companies not included in this list, the insurance company must register with the LYBS to ensure compliance with the passage conditions. Please visit the following link to access the list published by the General Directorate of Maritime Affairs: https://denizcilik.uab.gov.tr/muteber-p-ve-i-kuruluslari. Recent mari.me accidents have demonstrated that some insurance companies have failed to fulfil their obligations, leading to serious operational and legal issues. Therefore, it is of utmost importance for ship operators and cargo owners to diligently verify the validity of their insurance policies.
Application Criteria and Inspections
The conditions that insurance organizations must meet to register in the LYBS system are as follows:
- They must collaborate with a correspondent firm in Turkey that has appointed and valid authorities.
- They must submit a letter of intent to the authorities, including full company information and a valid P&I policy.
- They must provide financial reliability reports obtained from credit rating agencies.
- They must offer an online inquiry option on their websites to verify the validity of P&I policies.
- The insurance coverage must meet international standards and not be less than 100 million USD.
- They must provide financial and compensation payment reports for the last three years.
Companies meeting these criteria will be registered in the LYBS system and announced on the relevant list. Additionally, insurance organizations registered in the LYBS will continue to be audited, and the registrations of companies that do not meet the required conditions will be cancelled.
Operational and Legal Consequences
Transactions carried out without verifying the validity of insurance may result in vessels being unable to enter or exit ports, operational disruptions, and significant financial losses. Additionally, transactions conducted with invalid policies will increase the risk of facing high fines and legal sanctions. Therefore, cargo owners, carriers, and industry representatives must diligently verify the validity of insurance policies in all operational processes in advance and take the necessary precautions to prevent any inconvenience.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
