Statutes and Rules 1998 (December 1997)

Circular No. 8/97 December 1997

TO THE MEMBERS

Dear Sirs,

STATUTES AND RULES 1998

This Circular contains details of the alterations to the Association?s Statutes and Rules for the 1998 policy year. The amendments were adopted by the Committee at its meeting on 27 October 1997 and will enter into effect from noon GMT on 20 February 1998.

Statutes

No amendments have been adopted for 1998.

Rules for Ships

Rule 8 - Classification and Certification of the Ship Rule 8.1(f) shall read (the amendment is underlined):

The amendment requires the Member to maintain the validity of statutory required certificates issued by or on behalf of the state of the Ship?s flag in relation to the safe operation and management of the Ship. It means that the Member is obliged to maintain in respect of each entered Ship, valid ISM Code certificates. Valid ISM Code certificates will be deemed to be a condition of the insurance of the Ship like compliance with the requirements of the Ship?s classification society and statutory requirements of the state of the Ship?s flag with regard to the Ship?s hardware are conditions of cover today. Hence, a Member will not be entitled to any recovery from the Association in respect of claims arising from the failure to maintain valid ISM Code certificates.

The amended Rule 8.1(f) reflects the recommended International Group practice on this issue.

Rule 31- Diversion expenses Rule 31 shall read (the amendment is underlined):

It has been suggested by Members that there is a need for Club cover in respect of expenses attributable to a diversion for the purpose of saving persons at sea. The amended Rule 31 widens the cover to include such expenses.

Appendix V, Deductibles, Section 3 - Defence entries

Section 3(a) shall read:

The Committee has reviewed the structure of the Defence cover and found that the individual Member should have a financial incentive to monitor costs and expenses on large and complicated Defence cases. Against this background the Committee decided to remove the existing USD 50,000 ceiling on the Defence deductible. The removal of the ceiling means that the Member will pay 25 per cent of all costs incurred on each individual case as opposed to the current provision whereby the maximum deductible is set at USD 50,000.

Appendix VI - Rules on Catastrophe Claims and Contribution and related matters

Section 5.4 shall read (the amendment is underlined):

This amendment reflects the Committee?s decision to accept a reduction in the limit on Catastrophe Contribution from 20 per cent to 2.5 per cent of the 1976 Limitation Convention?s property funds. The amendment was described in detail in our Circular No. 3/97 (July 1997) to which we refer for further details.

Rules for Mobile Offshore Units

Rule 8 - Classification and Certification of the Vessel Rule 8.1.f. shall read (the amendment is underlined):

We refer to the explanatory note to the amended Rule 8.1(f) in the Rules for Ships above.

Rule 24 - Liability for obstruction and wreck removal Rule 24 (b) shall read:

Last year Rule 40(b) in the Rules for Ships was amended in order to mirror the Club?s practice. A corresponding alteration has now been adopted in the Rules for Mobile Offshore Units. The reason for this amendment is that the cover also shall include any liability the Member may incur as a consequence of the Vessel, as a result of a casualty, causing an obstruction even if the vessel is not a wreck (i.e. a total loss).

Yours faithfully, ASSURANCEFORENINGEN GARD -gjensidig-

John G. Bernander Managing Director