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Recommendations on Regulations on Compulsory
Passenger Insurance Pursuant to Marine Liability Act
(Part 4, Section 39)

Prepared by The Mariport Group LTD.
for

TRANSPORT CANADA
MARINE POLICY

FINAL REPORT

***

This report, received by Transport Canada in November 2002, reflects the views of the authors and are not necessarily those of Transport Canada

THE MARIPORT GROUP LTD
Specialized advisory services for ports & the shipping industry

Regulations on Compulsory Passenger Insurance
Pursuant to Marine Liability Act

(Part 4, Section 39)

TRANSPORT CANADA
MARINE POLICY

FINAL REPORT

***

October 2002

The Mariport Group Ltd.

41 Parkhill Road East
P.O. Box 1758
Cambridge, Ontario
Canada N1R 7G8

CONTENTS

1. Summary

1.1 Assumptions
1.2 Highlights
1.3 Recommendations
1.4 Impacts

2. MLA Vessels

2.1 Overnight cruise ships
2.2 Canadian and US Flag Ferries
2.3 Day cruise
2.4 Adventure tourism
2.5 Charter fishing
2.6 General utility craft
2.7 Permanently moored craft
2.8 Other vessels

3. Insurance Market

3.1 State of the market
3.2 Current market capacity
3.3 Limitations of Canadian insurers
3.4 Current practices
3.5 Impact of regulation on marine passenger insurance
3.6 Insurance trade and competition
3.7 Premium outflow to foreign markets
3.8 Current and future premium costs
3.9 Quality of insurance carriers
3.10 Uninsured and uninsurable operators
3.11 Tracking of insurance requirements
3.12 Scope of application

4. Monitoring

4.1 The designated authority - the gatekeeper
4.2 Party to provide evidence of insurance
4.3 Compliance enforcement

5. Filters

· Dragon boats
· Sail training ships
· Charter yachts
· Small boat rental operators & outfitters
· Canoes & kayaks

6. Data Base

6.1 Estimated coverage by sector
6.2 Original data resources
6.3 Communication with operators

7. Other Maritime Environments with Compulsory

Passenger Liability Insurance

7.1 Australia
7.2 China
7.3 Croatia
7.4 Hong Kong
7.5 Philippines
7.6 Sweden
7.7 United Kingdom
7.8 USA
7.9 I.M.O. Activities
7.10 European Union

8. Annexes

8.1 Communications

8.1.1 - Web material and downloads
8.1.2 - Workshop text
8.1.3 - Insurance industry contacts
8.1.4 - Insurance requirements for marine adventure tourism operators

8.2 Marine safety bulletins

GLOSSARY OF ABBREVIATIONS

AB Able Seaman
CBMU Canadian Board of Marine Underwriters
CCRA Canada Customs & Revenue Agency
CD-ROM Compact Disc - Read Only Memory
CFOA Canadian Ferry Operators Association
CGL Commercial General Liability
CPVA Canadian Passenger Vessel Association
CSA Canada Shipping Act
CVLP Commercial Vessel Licencing Programme
DFO Department of Fisheries and Oceans
GRP Glass Reinforced Plastic
IBC Insurance Bureau of Canada
IMO International Maritime Organization
MIA Marine Insurance Act
MLA Marine Liability Act
OSFG Ontario Sport Fishing Guides Association
PAI Personal Accident Insurance
P&I Protection and Indemnity
PFD Personal Flotation Device
SCALA Standard Compensation Act Liability Association
TC Transport Canada
US United States
VTZ Vessel Traffic Services Zone

REGISTRATION & SAFETY REGULATIONS OF
CANADIAN PASSENGER VESELS

At various points in this report, reference is made to the Canadian Ship Register and the Commercial Vessel Licencing Programme. The following provides an explanation of these terms.

Ship Registry

All Canadian vessels of 15grt and above are required to be registered. Canadian vessels under 15 GRT may be registered voluntarily. This service is provided by Transport Canada. The Ship Registry is a system of international identification of, and title to, Canadian vessels. It is a public record of the identity of vessels and their owners and mortgage holders, as well as being a record of Authorized Representatives for commercial registered vessels. The Authorized Representative of each commercial registered vessel is responsible for regulatory compliance with the Canada Shipping Act.

Commercial Vessel Licencing Programme

Formerly all Canadian vessels with engines above 9.9 horsepower, if not registered, were required to be licenced under a Programme administered by Revenue Canada. Recent government reorganization has given regulatory responsibility for pleasure craft to the Department of Fisheries and Oceans and for commercial vessels to Transport Canada. For the time being, DFO is continuing to require that powered pleasure craft be licensed through the Canada Customs and Revenue Agency. Pleasure craft licensing will continue, but may be run differently in the future.

All commercial vessels which are not registered are required to have a commercial vessel licence. The Marine Safety Guideline 14/2000, which is also referenced in this report, is a part of the ongoing dialogue between industry and Transport Canada Ship Safety to distinguish between pleasure craft, which are regulated by DFO, and commercial craft, which are regulated by Transport Canada. Mariport has been advised that this guideline will be modified by early 2003 to clarify a number of grey areas, and will be incorporated into the regulations for CSA 2001.

Although the Commercial Vessel Licencing Programme (CVLP) is run by the same branch of Transport Canada as the ship registry, the CVLP is not a registration system in the sense that large vessel ship registries are understood internationally. Unlike a vessel registry for larger vessels, the CVLP is not evidence of title, does not permit the registration of ship mortgages and the information in the licensing program about licenced vessel owners who are individual persons is not accessible to the public. The CVLP is intended to identify the owners of all commercial vessels that are not registered, for regulatory purposes. This programme is being phased in and will not become fully operational until 5 years following the completion of the regulatory process for the entry into force of the new Canada Shipping Act, 2001. This time delay is in recognition of the very large number of such craft in Canada, and the need to communicate with all owners.

Safety Regulation

The TC Ship Registry and the CVLP are not concerned with safety regulation such as hull construction, equipment and passenger capacity. Passenger capacity is regulated by TC Ship Safety, who inspect and issue the appropriate annual certificates to all vessels carrying 12 or more passengers. TC Ship Safety also has established a system for initial inspection and approval of the construction and equipment of small vessels at the time they are built or converted for commercial passenger use, with requirements that the owners follow standards and regulations in the future. This safety inspection and regulatory system covers both small passenger vessels whose owners voluntarily chose to register in the ship registry, and all other Canadian small commercial passenger vessels, which are required to have a commercial vessel licence.

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