03/2004: Special War Risks Cover for owners' and charterers' entries; Notice of cancellation in respect of vessels employed as accommodation vessels in Greece in respect of the Olympic Games ...

Circular No. 3/2004 May 2004

TO THE MEMBERS OFASSURANCEFORENINGEN GARD - gjensidig –

Dear Sirs,

Special War Risks P&I Cover for owners' and charterers' entries reinsured under the Pooling Agreement and the Group's Excess Loss Reinsurance Contract - 2004Notice of cancellation in respect of vessels employed as accommodation vessels in Greece in respect of the Olympic Games in Athens and associated sporting events

Introduction

We refer to our previous Circular of February 2004 (Circular No. 6/2003) where we outlined the terms of the special war risks P&I cover for the 2004 policy year. The Association is reinsured for these liabilities under a market cover.

As set out in our Circular No. 6/2003 the special war risks P&I cover is subject to the Institute Notice of Cancellation, Automatic Termination of Cover and War and Nuclear Exclusions Clause - Hulls, which means that the insurance can be terminated upon the giving of 7 (seven) days’ notice. However, the special war risks P&I cover may be reinstated subject to agreement between the individual Member and the Association, and may be subject to additional premium and conditions.

Notice of cancellation – Olympic Games in Athens In respect of vessels employed as accommodation vessels in Greece in relation to the Olympic Games in Athens and associated sporting events the reinsurance market has assessed the risks attached to such employment and decided to restrict the war risks cover to USD 50 million any one event each vessel as opposed to the current limit of USD 400 million.

In light of this change in insurance limit, the Association is obliged to issue a general notice of cancellation in respect of Owners’ and Charterers’ vessels employed in Greece as accommodation vessels in relation to the Olympic Games in Athens and associated sporting events. The Association therefore advises that this Circular constitutes Notice of Cancellation of the special war risks P&I cover in accordance with the Standard War Risks Conditions clause relating to termination of cover, as attached. This notice shall run from 2400 hours GMT on 25 July 2004. The cancellation will become effective at 2400 hours GMT on 1 August 2004.

Upon expiry of the notice at 2400 hours GMT on 1 August 2004, the special war risks P&I cover will be reinstated automatically both for Owners’ and Charterers’ entries on the same terms as set out in our Circular No. 6/2003 except for the important change that the limit on the special war risks P&I cover is reduced from the current limit of USD 400 million to USD 50 million any one event each vessel.

This Notice of Cancellation applies only for vessels that are employed as accommodation vessels in Greece in relation to the Olympic Games in Athens and associated sporting events and that are entered for P&I cover in the Association under Owners’ or Charterers’ entries reinsured under the International Group’s Pooling Agreement. This Notice of Cancellation does not apply to covers where the Association as risk carrier has arranged its own reinsurance outside the International Group’s pooling system, such as the Comprehensive Charterers’ Cover, the P&I cover for Mobile Offshore Units and the additional insurances provided or facilitated by the Association, which are subject to their own war risk cancellation provisions.

If you have any questions, please contact the P&I underwriting department.

Yours faithfully, GARD AS as agent only for Assuranceforeningen Gard –gjensidig-

Claes Isacson Chief Executive Officer

APPENDIX TO CIRCULAR NO 3/2004Institute Notice of Cancellation, Automatic Termination of Cover and War and nuclear exclusions clause - Hulls

This clause shall be paramount and shall override anything contained in this insurance inconsistent therewith

1. CancellationCover hereunder in respect of the risks of war, etc. may be cancelled by either the Underwriters or the Assured giving 7 days notice (such cancellation becoming effective on the expiry of 7 days from midnight of the day on which notice of cancellation is issued by or to the Underwriters). The Underwriters agree however to reinstate cover subject to agreement between the Underwriters and the Assured prior to the expiry of such notice of cancellation as to new rate of premium and/or conditions and/warranties.

2. Automatic Termination of Cover Whether or not such notice of cancellation has been given cover hereunder in respect of the risks of war, etc, shall TERMINATE AUTOMATICALLY

   1. upon the outbreak of war (whether there be a declaration of war or not) between any of the following:United Kingdom, United States of America, France, the Russian Federation, the People’s Republic of China;

   2. in respect of any vessel, in connection with which cover is granted hereunder, in the event of such vessel being requisitioned either for title or use.

3. Five Powers War and Nuclear Exclusions This insurance excludes

   1. loss damage liability or expense arising from

      1. the outbreak of war, whether there be a declaration of war or not between any of the following: United Kingdom, United States of America, France, the Russian Federation, the People’s Republic of China;

      2. requisition either for title or use

   2. loss damage liability or expense directly or indirectly caused by or arising from

      1. ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel

      2. the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof

      3. any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter.

4. Law and Practice This clause is subject to English law and practice.