Outline

• The additional premium system for tankers carrying persistent oil to or from the United States will continue for the 2004 policy year.

• Rates have been reduced by approximately five per cent.

TO THE MEMBERS

Dear Sirs

OIL POLLUTION IN THE UNITED STATES
TANKER VOYAGE ADDITIONAL PREMIUM SYSTEM - 2004 POLICY YEAR

The additional premium system for tankers carrying persistent oil to or from the United States will continue for the 2004 policy year. The new rates (set out below), represent a decrease of just under five per cent on the 2003 rates. This reduction is in line with the decrease in cost achieved for the first US$1 billion of cover under the International Group's excess of loss reinsurance arrangements for the 2003 policy year in respect of tankers carrying persistent oil. As reported in circular [<A HREF="ClubCircular0204">ref 2/04</a>] the Pool retention has been increased from US$30 million to US$50 million. A proportion of the US tanker voyage additional premiums will be allocated to this new layer.

The full text of the US Oil Pollution Clause 20/2/2004 will be set out in an Appendix to the Rules and will be incorporated, by reference, in the Certificates of Entry. As before, a lower rate per ton will apply to tankers equipped with segregated ballast tanks (SBT) in accordance with the requirements of Regulation 13 of Annex 1 to MARPOL 73/78.

Yours faithfully

Thomas Miller (Bermuda) Ltd