The American Club has taken action to limit the exposure of its current and future members to occupational illness claims arising from closed policy years prior to 1989.
At a special meeting, the club adopted resolutions ending a discretionary practice of reimbursing unknown and unreserved claims arising in policy years before 1989.
The club said the practice was instituted over 20 years ago to deal with asbestosis and has, until now, provided for reimbursement of claims for occupational disease from the club's general reserves.
It said many of these claims go back as far as the 1940s, and they impact years long since closed for the purpose of raising extra mutual premium.
The club said under New York law, where the club is based, there is no legal obligation to pay such claims.
The club's said there was no justification for continuing a practice which threatened the erosion of current members' funds for the benefit of those who, historically, made negligible, if any, contribution to the claims they are seeking to recover. It said many of those members who were still trading were no longer members of the club.
The club will continue to respond to occupational disease claims arising in the 1989 policy year and subsequent policy years.
The club joined the International Group of P&I Clubs in 1989, and said it would continue to conform its practice to the expectations of the pooling agreement from that date.
