A New Legislative Proposal Ensuring War Insurance for Danish Merchant Fleet

A new legislative proposal has been introduced in Denmark to address the issue of war insurance for the Danish merchant fleet. The proposal aims to ensure that the fleet remains insured and operational in the event of war, even if the commercial insurance market collapses.

Background

In times of war or conflict, the Danish merchant fleet plays a crucial role in ensuring the country’s economic stability and security. However, if the commercial insurance market is unable to provide coverage for the fleet during such times, it could pose a significant risk to both Denmark and the shipping companies.

To address this potential risk, the Danish government has put forward a proposal to activate the War Insurance Institute, which would guarantee insurance coverage for the Danish merchant fleet in the event of war.

Key Points of the Proposal

One of the key components of the proposal is the provision of a state loan guarantee of six billion kroner upon activation of the War Insurance Institute. This guarantee aims to ensure that the Institute has sufficient liquidity to provide insurance coverage for the fleet.

Minister for Industry, Business and Financial Affairs, Morten Bødskov, emphasized the importance of being prepared for uncertain times and ensuring the continued operation of the Danish merchant fleet in the event of war. The six billion kroner allocation is seen as a strategic move to safeguard Danish jobs and economic growth.

The loan facility will be repaid through contributions from shipping companies when the Institute is activated. This funding model ensures that the scheme is supported by the shipping industry and backed by a state credit line.

Next Steps

The legislative proposal will undergo a consultation process and is expected to be formally presented in October. If approved, the proposal will provide a safety net for the Danish merchant fleet in times of war, ensuring that it can continue to operate and contribute to the country’s maritime strength.

Overall, the activation of the War Insurance Institute represents a proactive step towards safeguarding the Danish merchant fleet and protecting the interests of both Denmark and the shipping industry.