Insurance clause exlcusions

[Judith]

A letter of credit requires presentation of an insurance document to cover ICC(A), SRCC and War Clauses and states that no exclusions to these clauses are allowed.

The insurance document presented states "Risks covered: ICC(A), SRCC and War Clauses".
It also states that it is subject to "Institute war cancellation clause".

I looked up this clause and found this:

INSTITUTE WAR CANCELLATION CLAUSE (CARGO)
The cover against war risks (as defined in the relevant Institute War
Clauses) may be cancelled by either the Underwriters or the Assured
except in respect of any insurance which shall have attached in
accordance with the conditions of the Institute War Clauses before the
cancellation becomes effective. Such cancellation shall however only
become effective on the expiry of 7 days from midnight of the day on
which notice of the cancellation is issued by or to the Underwriters.

Is this an exclusion clause within the meaning of UCP?
Therefore, is the document discrepant?

[picant]

Hi Pal,

IMHO such clause is not an excllusion. Insurance must enter in a risk, not in certainty that an incident already occurred. So it must declare that no war is in place within place of receipt and place of destination, moreover if in 7 days this occurs , the insurance Company can cancel the contract, so the insurer if the reimbursemet is less that the probable damage.
So , in my opinion, document is acceptable.

Ciao

[cristiand969]

'Subject to.... ' means that something is conditional upon an event or the like.
'War cancellation clause means that war clause ceases to be covered under a specified condition.
.
Even if I refrain from quoting something in what Judith looked up as a definition, I can't help to say that this confirms me more that is a form of exclusion or if you like a form where a clause in LC ceases to be covered upon a specified condition.
Take care!

[picant]

Hi Pals,

I am not so expert but this clause states that the insurance company has no knowledge that war is in act in the Countries where the goods pass. If the goods will start the transport after 7 days, and war is in act, insurance and insurer will reconsider the situation and decide no to carry on. If the goods already en route, insurance is valid.
It is a market condition, than I think, as transport clauses, a bank has not a proper knowledge on "How it works".

Other comments appreciated
Ciao

[Judith]

Thank you all for your comments.

A trade advisor has confirmed that it is not a discrepancy. Apparently cancellation clauses are different from exclusion clauses.

In any case, banks are not expected to be experts on insurance clauses. So, as long as the document covers all risks as per the LC and (in this case), no risk appears to be excluded explicitly, the document ought to be acceptable.

(PS. There’s another clause called “INSTITUTE WAR, ATOMIC AND NUCLEAR EXCLUSION
(CARGO REINSURANCE)” clause. If the document was subject to it, it would probably have been a discrepancy.)

[cristiand969]

Thanks for sharing such info with us!