TO THE MEMBERS

Dear Sirs,

1998 POLICY YEAR - OIL POLLUTION LIMIT

Oil pollution limit

The Board has determined in accordance with Rule 5(B)(iii) that for the 1998 policy year the sums to which the Association's liability in respect of any and all claims for oil pollution shall be limited are:

US$500 million each accident or occurrence in respect of each ship entered by or on behalf of an Owner not being a charterer other than a charterer by demise or bareboat charterer

or

US$100 million each accident or occurrence in respect of each ship entered by or on behalf of a charterer (other than a charterer by demise or bareboat charterer) or by more than one such charterer as Joint Owners, subject to an aggregate limit in accordance with proviso (c) to Rule 5(B)(iii) of US$300 million.

The terms of Rule 5(B)(iii) govern the application of these limits.

Excess oil pollution cover

Oil pollution cover excess of the Association's cover limit of US$500 million is available for 1998 at rates significantly lower than for 1997. This cover is not provided by the Association itself but is placed directly with market underwriters on behalf of those Members who require it.

Members wishing to avail themselves of the cover should contact either their brokers or the Managers' London agents for details.

Oil pollution risks in the United States - additional premium

Details of the additional premiums for 1998 are set out in the Association's

Advance call instalments

The Board has decided to maintain for a further year the arrangement for payment of the advance call in four instalments. Accordingly debit notes will provide for payment of the 1998 policy year advance call in four instalments on or before the following dates: 20th March, 20th May, 20th August and 20th October.

War risks P & I

This special cover for claims otherwise excluded by the terms of Rule 5(E) has been in place for some years. For 1998 the terms and conditions, including the US$100 million cover limit, are unchanged from the 1997 policy year cover. Members requiring a copy of the Board resolution setting out these terms and conditions in full should contact the Managers' London agents.

OBOs and clean tankers

Details of a change to the method of allocation of reinsurance costs for OBOs and clean oil cargo carrying tankers are set out in the Association's

Yours faithfully,

THOS. R. MILLER & SON (BERMUDA)

circular ref 2/98.circular ref 3/98.