Insurance for Solar 1 Hits Snag

Owners of the M/T Solar 1 oil tanker could face problems in paying off claimants of the Guimaras oil spill due to possible rejection of their insurance claims, TV Patrol World reported Wednesday. Stronghold Insurance Company Inc. (SICI) cancelled the hull and machineries insurance policy of Solar 1 after the tanker's owners, Sunshine Maritime Development Corp. (SMDC), failed to settle the premium. Another insurance firm based in Luxembourg could also refuse insurance worth $300 million after the ship's owners allowed an unlicensed captain to man the vessel.

SICI executive vice-president Romulo de los Reyes said SMDC took a hull and machineries policy worth P20 million for the Solar 1 last February. He added that SMDC failed to settle its premium worth P211,990. "We have to have payment for the policy so it will be in effect," he said, adding that SICI had already informed the Insurance Commission about the rejection of the claim. SMDC president Clemente Cancio said the company will file charges against the insurance firm. "We used to be late in paying the premium but it was never a problem until now," he said.

Another insurance claim worth $301 million at the Shipowners’ Mutual Protection and Indemnity Association in Luxembourg could also be rejected after SMDC violated one of the insurance company's rules on exclusions. The rule states that "there shall be no right of recovery of any claim from the Association if it arises out of willful misconduct on the part of the insured."

SMDC earlier admitted before a Special Marine Board of Inquiry that it allowed Captain Norberto Aguro to man the Solar 1 despite failing to renew his license. SMDC, however, rejected the report, saying that the insurance company had already sent representatives to Guimaras to assess the possible amount of damages.

President Arroyo on Wednesday ordered the Department of Justice to build an "air-tight" case against the captain of the sunken M/T Solar 1 and officials of Petron Corp. and SMDC. "No one culpable in this national tragedy shall walk away scot-free," Press Secretary Ignacio Bunye said in a statement. He said that the filing of cases against people allegedly responsible for the oil spill should be a reminder to oil companies and firms engaged in oil and chemical transport to cooperate with government agencies and institutions about their operations.

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