Cosco Firms Sign Insurance Agreement
By Aiswarya Lakshmi
June 29, 2017
Cosco Shipping Energy Transportation has entered into insurance services framework agreement with Cosco Shipping Insurance pursuant to which the latter will provide vessel-related insurance services to the Group.
Cosco Shipping Insurance is a wholly-owned subsidiary of Cosco Shipping , the Company’s indirect controlling shareholder. Accordingly, Cosco Shipping Insurance is a connected person of the Company, and the Insurance Services Framework Agreement and the transactions thereunder constitute continuing connected transactions of the Company.
As the applicable percentage ratios under the Listing Rules for the Insurance Services Framework Agreement are more than 0.1% but less than 5%, the transactions under the Insurance Services Framework Agreement are subject to the reporting, announcement and annual review requirements but are exempted from circular (including independent financial advice) and shareholders’ approval requirements under Chapter 14A of the Listing Rules.
The transactions contemplated under the Insurance Services Framework Agreement constitutes continuing connected transactions of the Company and further details of the agreement are set out.
As an internal control policy, the Company will, before the purchase of insurance services from Cosco Shipping Insurance or any adjustment of insurance premium, obtain quotations from at least two independent third party insurance companies to ensure that the terms and prices quoted by Cosco Shipping Insurance are no less favourable than those of independent third party insurance companies.
Considering the pricing policy and the internal control policy as outlined above and that the transactions contemplated under the Insurance Services Framework Agreement will be subject to annual review by the independent non-executive Directors and the auditors of the Company, the Directors (including the independent non-executive Directors) believe that the pricing determination procedures outlined above are sufficient to ensure that the transactions contemplated under the Insurance Services Framework Agreement will be conducted on normal commercial terms or better and in the interests of the Company and its shareholders as a whole.
