At its meeting on October 9th 2003 the Board of Directors decided on its policy with regard to premium for the policy year February 20th 2004 to February 20th 2005.

The Board of Directors

noted	that the open policy years have developed according to predictions but that claims over years continue to increase in costs. The current policy year is showing a balanced development through its first six months. The result is however, that premiums are not likely to safely cover all claims that will be made against the Association.
decided	that calls have to be levied to reflect the Association’s exposure. A general increase of 15 % shall be levied and the Association shall aim to maintain a 0 % supplementary call for 2004/2005 and preceding open years.
instructed	the management to contact each Member individually to discuss renewals for 2004/2005. After levying the mandatory general increase, the new call shall include reinsurance cost and any change thereof as well as the exposure for claims pooled in excess of the Association’s retention. The call shall furthermore reflect the exposure of the Association’s retention as well as an assessment of the Member’s records and risk exposure.

The Board decided further to maintain the estimated total call for 2003/2004.

In short:

A 15 % general increase An estimated supplementary call of 0 % A predicted release call of 25 % for 2004/2005 Call to be debited in four instalments

The Board of Directors decided for the insurance year 2004/2005:

Owner’s Protection & Indemnity

General Increase
The 2004/2005 Estimated Total Call (ETC) shall be increased by 15 % prior to any increase for claims records and/or other adjustments of premium. Any increase in reinsurance cost shall be added to the call. The call shall reflect the contribution to Pool claims in excess of the Association’s retention to the pool of currently USD 5 million.

Premiums
All premiums are debited as advance and supplementary calls. It is anticipated that this policy year will be closed in the year 2007. The Board decided that the premium shall be debited in four instalments: at inception, February 20th, May 20th, August 20th and November 20th. For 2004/2005 the calls will be based on Gross Tons (GT) as per the International Convention on Tonnage Measurements of Ships 1969.

Supplementary Call
The supplementary call for this year will initially be decided upon in 2005. The current estimated supplementary call for 2004/2005 is 0 %.

Release Call
The release call for 2004/2005 is predicted to 25 %. Members should be aware that even if a release call has been paid, the Association retains the right to make overspill calls as per the P&I Rules (Rule 23).

Payment of Premium
Premiums are to be paid in accordance with the enclosed “Procedures for Payment of Premium“.

Renewals
The premium for 2004/2005 will be based on the Member’s record for the five year period 1998-2002, including current year if adverse. Records and claims summaries are now available through the Swedish Club extranet, SCOL. The information is updated overnight.

Limit of Liability
The overall liability of the Association for 2004/2005 is, unless otherwise stated in the Policy or in the P&I Rules, limited to a maximum collection of 2.5 % contribution of each entered vessel based on the International Convention on Limitation of Liability for Maritime Claims 1976, property claims Article 6 paragraph 1(b), in excess of reinsurance jointly placed by the International Group. (See also current P&I Rules, “Appendix”.) The limit of liability for Oil Pollution is USD 1,000,000,000.

 

Lay-up Returns
Members are allowed up to 50 % premium returns for vessels laid up in a safe port for more than 30 consecutive days if the vessel has only watchmen and no cargo onboard. The Association, however, will always retain a minimum premium of USD 0.90 per GT.

Return premium is not granted for vessels less than 396 GT, nor for tugs, barges or passenger ships/ferries in coastal trade.

Claim for lay-up returns should be made to the Association as soon as possible, however, latest 12 months after expiry of the policy year. Sufficient information has to be supplied in order for the Association to calculate the return. A lay-up return application form is enclosed.

War Clause
All Swedish flagged vessels are subject to the “The Swedish Club Outbreak of War Clause (P&I)”, (P.9), as enclosed.

U.S. Terrorist Insurance Act of 2002
Reference is made to letter and circular P&I 2413/2002 dated 2002-11-22 and the cover described under the heading “P&I – War Risks”.

Policy Endorsement
All policies and certificates of entry issued by the Association will include the following endorsement:
This certificate policy is evidence only of the contract of indemnity insurance between the above named Member(s) and the Association and shall not be construed as evidence of any undertaking, financial or otherwise, on the part of the Association to any other party.

If a Member tenders this certificate as evidence of insurance under any applicable law relating to financial responsibility, or otherwise shows or offers it to any other party as evidence of insurance, such use of this certificate by the Member is not to be taken as any indication that the Association thereby consents to act as guarantor or to be sued directly in any jurisdiction whatsoever. The Association does not so consent.

Certificate of Financial Responsibility (COFR) – U.S. Trading
Members are reminded that trading to the United States requires a COFR in advance. The Association does not issue such certificates. A COFR may be obtained through specialised institutes issuing such certificates. The Association will provide necessary documents to such approved institutes as may be required for obtaining a COFR.

California and Alaska
All vessels trading to California and/or Alaska are required to have a California COFR. Members are required to provide a Certificate of Entry or a copy of the P&I Policy. Members shall be aware of the increased levels for COFRs for nontank vessels in Alaska and may visit the official website for further information: www.state.ak.us/local/akpages/ENV.CONSERV/dspar/nontank

P&I Rule changes and additions valid from February 20th 2004
Rule 3, section 9 – Diversion expenses; new added wording:
“Cost and expenses for fuel, insurance, wages, stores, provisions and port charges attributable to a diversion, in excess of those which would have been incurred but for the diversion, reasonably undertaken for the purpose of securing treatment of any injured or sick person on board the entered ship, while awaiting a substitute for such person or for the purpose of landing stowaways, refugees or persons saved at sea, provided that such costs and expenses are incurred with the approval of the Association.“

Rule 4, section 1 paragraph 4; new wording:
“For deck cargo, cover is afforded by the Association provided that the vessel, cargo and containers and similar articles of transport are suitable for deck carriage in all circumstances and that the bill of lading, waybill or other document containing or evidencing the contract of carriage contains a valid liberty clause to carry such cargo on deck and either

	a) states that the cargo is being so carried and excludes all liability for loss or damage to such cargo or;
	b) Makes the carriage subject to the Hague Rules or the Hague Visby Rules.”

ISPS –INTERNATIONAL SHIP AND PORT FACILITY SECURITY CODE
The ISPS Code, which has been incorporated into SOLAS 1974, will come into force for most types of ship on July 1st 2004. Members shall have a valid certificate from such date the code becomes mandatory in order not to jeopardise the cover.

 

BOLERO
See circular P.2384/1999. Any member involved in trading using Bolero shall inform the Association before commencing the use of Bolero in order to benefit from the additional cover arranged. Following endorsement deemed to be included in all P&I Policies:

1.	There shall be no recovery from the Association in respect of any liability, cost or expense whatsoever or howsoever arising, whether directly or indirectly, out of or in consequence of:

	(a)	the Member’s participation in or use of any system or contractual arrangement the predominant purpose of which is to replace paper-based documentation in shipping and/or international trade with electronic messages, including, without limitation, the Bolero system (any such system or arrangement being referred to in this endorsement as a “paperless system”), or
	(b)	a document which is created or transmitted under a paperless system which document contains or evidences a contract of carriage, or
	(c)	the carriage of goods pursuant to such a contract of carriage, save to the extent that the Association in its sole discretion may determine that such liability, cost or expense would have arisen and would have been covered by the Association if the Member had not participated in or used a paperless system and any contract of carriage had been contained in or evidenced by a paper document.

2.	For the purpose of this endorsement a “document” shall mean anything in which information of any description is recorded, including, but not limited to, computer or other electronically generated information.

Old Years
The current position on the old years is as follows:

---

Year

Status

Estimated Additional Call

Release Call

---

2000/2001 and earlier	Closed	–	–
2001/2002	Open	0 %	5 %
2002/2003	Open	0 %	25 %
2003/2004	Open	0 %	25 %
2004/2005	Open	0 %	25 %

---

Charterers’ Liability Cover

 

Premiums
The premium for Charterers’ P&I is fixed and thus not subject to any supplementary calls.
The minimum premium for all vessels is USD 1,000 but always minimum two months premium.

 

Payment of Premium
Premiums are to be paid in accordance with the enclosed “Procedures for Payment of Premium“.

 

Renewals
The premium for 2004/2005 will be based on the records for the five year period 1998-2002, including current year if adverse. Records and updated claims summaries are available from the Swedish Club’s extranet, SCOL. Information is updated every night.

 

Limit of Liability
The Association’s maximum liability is limited to USD 300,000,000 for each chartered entry and in addition a separate limit of USD 100,000,000 for Oil Pollution claims each entry, subject to an aggregate in respect of Oil Pollution claims of USD 300,000,000 each vessel, any one accident.
The limit of liability per entry is as per Rule 9 of the Association’s Rules for P&I Insurance.

 

In this circular we have dealt with general terms. When reinsurance and terms for ancillary covers are known for 2004/2005, further information will be circulated to Members. Please do not hesitate to contact your Association should you have any questions.

Yours sincerely,The Swedish ClubFrans Malmros