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1. The EMFF may contribute to mutual funds which pay financial compensation to fishermen for economic losses caused by public health crises, adverse climatic events or by environmental incidents or for the rescue costs for fishermen or fishing vessels in the case of accidents at sea during their fishing activities.

2. For the purpose of paragraph 1, the term ‘mutual fund’ means a scheme accredited by the Member State, in accordance with its national law, which enables affiliated fishermen to insure themselves, whereby compensation payments are made to affiliated fishermen for economic losses caused by the events set out in paragraph 1.

3. Member States shall ensure that overcompensation as a result of the combination of the support under this Article with other Union or national instruments or private insurance schemes is avoided.

4. In order to be eligible for support under this Article, the mutual fund concerned shall:

(a) be accredited by the competent authority of the Member State, in accordance with national law;

(b) have a transparent policy towards payments into and withdrawals from the fund; and (c) have clear rules attributing responsibility for any debts incurred.

5. Member States shall define the rules for the establishment and management of the mutual funds, in particular for the granting of compensation payments and the eligibility of fishermen for such compensation in the event of public health crises, adverse climatic events, environmental incidents or accidents at sea as referred to in paragraph 1, as well as for the administration and monitoring of compliance with those rules. Member States shall ensure that the fund arrangements provide for penalties in the case of negligence on the part of the fisherman.

6. Public health crises, adverse climatic events, environmental incidents or accidents at sea as referred to in paragraph 1 shall be those that are formally recognised by the competent authority of the Member State concerned as having occurred.

7. The contributions referred to in paragraph 1 shall only relate to the amounts paid by the mutual fund as financial compensation to fishermen. The administrative costs of setting-up the mutual funds shall not be eligible for support. Member States may limit the costs that are eligible for support by applying ceilings per mutual fund.

8. The contributions referred to in paragraph 1 shall only be granted to cover losses caused by public health crises, adverse climatic events, environmental incidents or accidents at sea which amount to more than 30 % of the annual turnover of the business concerned, calculated on the basis of the average turnover of that business over the preceding three calendar years.

9. No contribution from the EMFF shall be made to the initial capital stock.

10. Where Member States decide to limit the costs that are eligible for support by applying ceilings per mutual fund, they shall provide details and justifications in their operational programmes on those ceilings.