Oil pollution facility - 1998 policy year - USD 200 million excess of USD 500 million - USD 250 million excess of USD 500 million, California requirements ( 9th February 1998)

Circular No. 12/97 9 February 1998

TO THE MEMBERS

Dear Sirs,

OIL POLLUTION FACILITY - 1998 POLICY YEAR USD 200 MILLION EXCESS OF USD 500 MILLION USD 250 MILLION EXCESS OF USD 500 MILLION, CALIFORNIA REQUIREMENTS

We refer to our Circular of 5 February 1997 with respect to excess oil pollution cover of USD 200 million for the current insurance year. We have been advised that facilities offered by London market underwriters are also available for the 1998 insurance year for a USD 200 million tranche of protection in excess of the limit for oil pollution cover provided by the Association. The limit of cover provided by the Association for the 1998 policy year will remain at USD 500 million.

The Association, acting as intermediary only, is prepared to also assist Members wishing to take out the above excess cover for the 1998 year. This facility is not a club cover, but a direct insurance between market insurers and Members. The Club has not been involved in the placing of the cover and has therefore had no involvement in the renewal terms offered. However, for the first time, the cover has been placed at the instruction of a negotiating committee set up by the International Chamber of Shipping.

The attention of Members is drawn to certain aspects by comparison with the structure for the 1997 policy year:

12 Months at Noon GMT 20 February 1998 EXCESS OIL POLLUTION LIABILITY USD 200,000,000 excess USD 500,000,000

Conditions/rates are as follows (all rates gross):

The standard radioactive exclusion clause has been amended and M.M. Clause No. 1083 (c) will be included with each cover note. The clause mirrors the exclusion in the International Group Pooling Agreement.

California COFR requirements, USD 250 million excess of USD 500 million

With regard to the coverage of USD 750 million required by the Californian Authorities, the extra coverage of USD 50 million can be effected by endorsing the existing USD 200 million cover upon special request by the Members. The following conditions will apply:

It is hereby understood and agreed to increase the limit of liability for tankers by USD 50 million to USD 250 million arising out of any one event whilst in Californian waters only.

Subject to a further additional premium of:

All other terms and conditions and features of the underlying premium calculations to apply. All other terms and conditions remain unaltered.

Cover will not attach unless the Association, acting as an intermediary, has received clear written instructions to effect cover prior to 20 February 1998.

Attached is a declaration form which Members who wish to effect the excess oil pollution cover should complete and return to the Association prior to 20 February 1998.

If you have further inquiries, please contact the Underwriting Department.

Yours faithfully, ASSURANCEFORENINGEN GARD -gjensidig-

John G. Bernander Managing Director

DECLARATION FORM EXCESS OIL POLLUTION COVER USD 200 MILL. EXCESS OF USD 500 MILL. USD 250 MILL. EXCESS OF USD 500 MILL., Californian requirements 20 FEBRUARY 1998 - 20 FEBRUARY 1999

Kindly effect on our behalf excess oil pollution cover for 12 months effective 20 February 1998.

Vessel: _____________________________________GT: ____________

Year built (shown as completed in Lloyd's Register of Shipping): ___________

Vessel to be covered in accordance with definitions, premiums and terms set out in Circular No. 12/97 of February 1998.

Specification of tankers:

This form, or summary for a fleet, should be returned not later than 20 February 1998.

Please note that the Association is acting as an intermediary only.

Signed by Member (if not signed by Member must be signed by authorised signatory of Member) in which case please state name of signatory.