TO THE MEMBERS
Dear Sirs
PROPOSED EXCLUSION OF TERRORIST RISKS - SPECIAL GENERAL MEETING
Following the terrorist attacks of 11th September 2001, the Managers have reviewed Rule 5E, which excludes from cover P&I risks arising from war and certain related causes.
As currently drafted, the exclusion is triggered where P&I claims are caused by certain types of political situation (war, civil war, rebellion, etc.), certain types of event (capture, seizure, etc.), and certain types of weapon of war (mines, torpedoes, explosives, etc.). Many of the more likely scenarios for terrorist activity at sea therefore already fall within the scope of the exclusion.
However, the attacks in the United States have drawn attention to the possibility of terrorism carried out in ways which were not imagined when the existing exclusions were drafted. This is a concern for the reinsurance market, whose judgement of capacity to address terrorist risk is dependent on knowing that exposure to the risk only arises under policies designed for that purpose.
In order to respond to those concerns, and to help safeguard the future availability of the Group's excess reinsurance protection, the Managers of all Group Clubs are recommending to their Boards and Members that the current war risk exclusions be amended to include a specific reference to terrorist acts. Papers for a Special General Meeting, to make this Rule amendment, are enclosed accordingly.
Members will recall that the Association provides a special war risks P&I cover in relation to risks otherwise excluded by Rule 5E. The present terms of this cover were the subject of the Association's circular dated 16th October 2001 (ref. 12/01). The Board will consider, at its next meeting in Athens, on 28th January 2002, the terms on which this special cover may be offered from 20th February 2002.
Yours faithfully
THOMAS MILLER (BERMUDA) LTD
