Short Title. Section 94.-This Act may be cited as the Marine Insurance Act, 1906. Schedule I consists of the S.G. Policy Form, together with Rules for Construction thereof. This is treated later. CHAPTER VIII. THE PRACTICE OF MARINE JNSURANCE. THE relationship of marine insurance to trade must always be borne in mind. While trade would be very much hampered were it not for the protection offered by the existence of marine insurance, it would not cease to function were this form of protection not available. On the other hand, none but the most venturesome of merchants would engage in trade to the full extent of his capacity. Trade itself has sufficient element of risk to satisfy the desires of the most romantic and adventurous, and it is for this reason that marine insurance is so popular. There is another reason why marine insurance is so freely resorted to by merchants. The whole structure of mercantile activities is built upon the foundation of the credit system. The trader has perforce to look to banking houses to advance him money against the shipments which he effects, as business would be but tediously conducted if a shipper had to wait until a remittance against each consignment was received from the consignee before he could utilise his capital in the initiation and conduct of fresh operations. Banks are therefore willing to finance trading operations. A buyer abroad forwards to the seller or a buying agent in this country a letter of credit drawn on a banking house, authorising him to draw through the bank on the buyer a bill against the value of goods forwarded. The bank will then be prepared to discount the bills if these are accompanied by documents of title in the consignments. The bill of exchange when accompanied by these papers is known as a documentary bill. The annexed papers consist of: An Export Invoice showing the marks, description, quality, quantity, price, etc., of the goods, also indicating the amount of trade discount, if any. Bill(s) of Lading evidencing shipment of the consign ment. A Consular Invoice and/or a Certificate of Origin if the tariff requirements of the destined country render these necessary or desirable. The Policy of Marine Insurance. The bank may also require a Letter of Hypothecation, empowering it to sell the goods if the draft be not duly honoured, and to have recourse against the shipper for any deficit arising. The bank will always insist on production of a policy on marine insurance and will usually require the risks of war to be covered. Thus it is apparent that marine insurance forms an essential part of the credit system. In connection with the import trade a similar process is observed. The consignee after paying to the bank the amount due on the draft becomes entitled to take possession of the documents of title. The Bill of Lading is detached and is presented, together with a cheque for any freight which may be payable, to the shipowner or his agent. A ship's clearance will then be given by the shipowner, which may consist of a separate document or be endorsed on the Bill of Lading. The consignee may be required before receiving such clearance to subscribe to a general average bond and/or produce a general average deposit should a general average act have occurred during the voyage. The consignee will then be enabled on presentation of the release to the ship, or to any warehouseman, etc., into whose care the goods have been delivered, to take possession of the consignment. If he does not require immediate delivery he may leave them in the charge of the warehouseman, and dock warrants may be issued against the consignment. Dock warrants bear an impressed stamp of threepence, and are negotiable instruments. They may be pledged against an overdraft. If the warrants remain lodged with the warehouseman, the goods may be delivered against a delivery order, which is also a negotiable instrument. Warehousemen will undertake many duties in connection with the delivery of merchandise and will arrange for its transit to any destination by rail, road or water. Effecting an Insurance.-The process of insuring goods is usually negotiated, as previously indicated, through the medium of an insurance broker. On being cognisant of the particulars of a consignment the overseas transit of which is projected, the merchant instructs the broker to arrange the appropriate insurance. His letter would be worded on the following lines. Kindly insure for our account the undermentioned goods and forward us cover note in due course. Marks: 1/10-10 bales Cotton Goods, valued £1,500. per Nore, from London to Bombay and thirty Conditions: Institute Clauses, average irrespective Awaiting receipt of your advices, We are, dear Sirs, Yours faithfully, ALFRED DIXON & COMPANY. On receipt of these instructions the broker would prepare a long slip, more usually known in the business as an original slip," which would appear as follows: 10 bales Cotton Goods, valued at £1,500. oil, non-delivery and other cargo damage. The broker would then place this slip in his case together with other similar slips made out on the instructions of other clients. He would then visit various Lloyd's and company underwriters to place the business. Each slip would be submitted in turn to underwriters likely to accept the risk at favourable rates. The broker is mostly empowered to place the business within certain limits as to rates. After the |