War Risks Cover and US Terrorism Risk Insurance Act ("TRIA") compliance

Special Circular 2002 6 February 2003

To Members of Assuranceforeningen Gard - gjensidige

with the following covers:

• Comprehensive Charterer’s Liability Insurance

• P&I Crew Cover

• Deviation Liability Cover

• Extended Cargo Cover

• Extended Crew Cover

• Comprehensive Carrier’s Cover

• Tour Operator Passenger Liability Cover

Dear Sirs

War Risks Cover and US Terrorism Risk Insurance Act (“TRIA”) compliance

War risks are not excluded from the Gard covers listed above. The cover for war risks is subject to the terms contained in the Member’s Certificate of Entry (in respect of the Comprehensive Charterer’s Cover and P&I Crew Cover) or Cover Note (in respect of the “bolt-on covers”, which are the Deviation Liability Cover, Extended Cargo Cover, Extended Crew Cover, Comprehensive Carriers' Cover and Tour Operator Passenger Liability Cover). This includes the Association’s Statutes and Rules for the 2003 policy year to the extent that they are incorporated by reference in the Certificate of Entry or Cover Note (except that the war risks exclusion in Rule 58 shall not apply), as well as any special terms agreed between the Association and the individual Member. There is no special sub-limit applicable to war risks; the cover is subject to the limit of insurance contained in Part IV of the Certificate of Entry in respect of the Comprehensive Charterer’s Cover, Part 2 of the P&I Crew Cover Certificate of Entry and Part 5 of the Cover Notes for the bolt-on covers.

Notice of Termination and Automatic Termination Clause

The Comprehensive Charterer’s Cover, the P&I Crew Cover and the bolt-on covers are subject to the War Risk Cancellation and Automatic Termination Clause which provides that the war risks cover can be terminated upon the Association giving 7 - seven - days’ notice of its intention to do so, and that in certain circumstances the cover may be terminated automatically. This is set out in Part II, paragraph 2, of the Comprehensive Charterer’s Certificate of Entry, Part 4 of the P&I Crew Cover Certificate of Entry and Part 2 of the Cover Notes for the bolt-on covers.

US Terrorism Risk Insurance Act of 2002 (“TRIA”) – compliance

The war risks cover includes claims arising from acts of terrorism as defined in the US Terrorism Risk Insurance Act of 2002 (“TRIA”). In order to ensure that the Association will be entitled to benefit from the program under which the United States’ federal government will pay 90 percent of terrorism losses exceeding a statutorily established deductible to be paid by the insurer providing coverage, a special Notice of Terrorism Insurance Coverage, as set out below, is included in this letter in order to comply with the policyholder disclosure requirements in TRIA.

Notice of Terrorism Insurance Coverage, US Terrorism Risk Insurance Act of 2002, section 103 (b)

Coverage for acts of terrorism is included in your policy for the 2003 policy year commencing at noon GMT on 20 February 2003. You should know that, effective from 26 November 2002, any losses caused by certified acts of terrorism will be partially reimbursed by the United States under a formula established by federal law. Under this formula, the United States pays 90 percent of covered terrorism losses exceeding the statutorily established deductible paid by the insurance company providing the coverage. The proportion of your annual premium that is attributable to coverage for acts of terrorism is 0.5 percent.

Bolt-on Covers: Primary War Risks Cover for P&I Risks

The bolt-on covers are not intended to replace P&I cover, nor act as primary war risks cover for P&I risks. Accordingly, there is an exclusion for risks which are covered under a P&I entry including risks which would be covered but for the war risks exclusion in Rule 58 (see Clause 3 (a) of the Cover Notes.)

Comprehensive Charterer’s Cover: Damage to the Ship caused by War Risks

In addition to the general provisions relating to war risk, cover for the charterer’s liability for damage to or loss of the chartered ship caused by war risks whilst trading to conditional areas (see the table, below, for the current list of Conditional Areas) is subject to the specific requirements contained in Section II, paragraph 1, of the Certificate of Entry which reads as follows:

”The cover for liability for damage to or loss of the Ship or any part thereof caused by War Risks is conditional upon the Ship being chartered on terms to the effect that:

1. the owners are entitled to refuse to send the Ship to any port or place that is dangerous by reason of war risks (as defined in any current standard war risks insurance policy), and

2. the owners are in any event entitled to insure their interests against such war risks, and

3. the charterers are liable to reimburse the owners in respect of any war risks premium incurred as a result of the Ship being ordered to or employed in such port or place; or alternatively, the Ship is chartered on terms no less favourable to the charterers as regards their liability for loss or damage caused by war risks.”

Cover may be available for Members using charter party terms which do not meet the requirements in Section II, paragraph 1, on terms and/or additional premium to be agreed.

For the time being the ports and places listed in the table below have been identified as dangerous by reason of war risks:

Conditional Areas:

Members with any questions are invited to contact the P&I Insurance Department of Gard Services AS.

Yours faithfully, GARD SERVICES AS As agent only for Assuranceforeningen Gard -gjensidig-   Claes Isacson Chief Executive Officer