Approximately 90% of all the world's merchant tonnage is entered with the 13 P&I Clubs and their affiliates who make up the International Group of P&I Clubs.These Clubs are based variously in England, Bermuda, Scandinavia, Luxembourg, the United States and Japan. There are in addition a number of small independent Clubs, as well as some P&I facilities in the commercial market. The International Group of P&I Clubs is a "Club of Clubs" which exists to provide a forum for discussion of legal and technical issues affecting the member Clubs, to provide a mutual reinsurance scheme for the member Clubs through the International Group Pool and its associated Excess Loss Reinsurance contracts, and to monitor the transfer of business between member Clubs under the terms of the International Group Agreement. It also acts from time to time as a lobbying organisation in relation to the development of maritime law and practice internationally.
The structure of the modern day P&I Club is far more complex than that of the original hull Clubs, but the basic characteristics of economy through mutuality, and control by the shipowner Members, are still fundamental. The Clubs today are typically organised in the following manner:
The Directors
Club Membership is composed of ship owners and charterers. Each Member has a voice in the formation of policy at Annual General Meeting, rather like the shareholders of a limited company. Because of the large number of Members which make up a modern P&I Club, the Membership as a whole has entrusted the direction of the Club to a Board of Directors which is elected from the Membership. The Membership of the larger Clubs is international and can vary from the small coastal owners to the largest international operators. The Boards of Directors consist principally of shipowners who reflect a cross-section of the Membership of the individual Club.
The Board is responsible for formulating the underwriting policy of the Club, its high level financial planning, and the extent of the cover provided. They decide from time to time on amendments to the cover set out in the Rules which are required to ensure that the Membership is provided with cover which develops as the liabilities which they face worldwide change and increase. Under some of the aspects of cover, discretion is given to the Board to reject or admit claims, depending on the circumstances in which they arise. On these occasions the Directors exercise a quasi-judicial role on behalf of the Club Membership. Meetings of the Boards of most of the major Clubs take place on a quarterly basis.
Managers
Members of Club Boards, being themselves busy shipowners, cannot devote themselves full time to the day to day affairs of the Club. As previously indicated, they delegate the day to day management to professional Managers and, in the case of a number of the larger Clubs which are based outside the United Kingdom, the Managers have in turn delegated a substantial part of their day to day operations to representatives in London and elsewhere. The Managers and their representatives are responsible for the day to day underwriting of risks, the handling of claims, and the administration of the Club's funds in accordance with the policies laid down by the Board of Directors. They are also responsible for the supervision of the services that the Clubs provide outside the role of pure insurance, which are an important part of the present day function of a mutual Club.
The Managers and their representatives employ a staff of underwriters, analysts, lawyers and claims' adjusters who provide the very wide breadth of expertise required to deal with P&I claims on the Members' behalf.
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