February, 2003
TO THE MEMBERS
Dear Sirs
WAR RISKS P&I COVER AND US TERRORISM RISK INSURANCE ACT 2002
As indicated in our earlier circular (ref. 1/03), the Directors considered at their meeting on 27th January, 2003, the basis on which special war risks P&I cover could be made available to Members in accordance with the proviso to Rule 5E and the extent to which this can include cover arising from acts of terrorism, as defined in the Terrorism Risk Insurance Act 2002 (the Act).
Following the receipt of US legal advice and reinsurance quotations, the Directors have resolved that cover can be provided to Members under the proviso to Rule 5E for the policy year commencing on 20th February, 2003, and that this will include cover arising from acts of terrorism as defined in the Act.
The cover will be provided in accordance with the terms of the resolution of the Directors of 27th January 2003 which is attached. Members will note that the limit has increased to US$400 million but, as before, the cover will only respond to claims in excess of the proper value of the entered ship, as defined in Rule 5D, or whatever sum is recoverable from war risk underwriters, whichever is the greater. The Directors have retained a discretion to pay claims which would fall within the excess. The limit applies on an each ship any one event basis. A premium of US cents 0.25 per entered ton is deemed to be attributable to the US risk in accordance with the terms of the Act.
Yours faithfully
THOMAS MILLER (BERMUDA) LTD.
