At the meeting on November 28th 2006 the Board of Directors decided upon its policy with regard to premium for the policy year February 20th 2007 to February 20th 2008.

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 negative development through its first eleven months. The retention for the Association will be USD 7,000,000 for 2007/2008.
decided	that calls have to be levied to reflect the Association’s exposure. A general increase of 7.5% shall be levied and the Association shall aim to maintain a 0% supplementary call for 2007/2008 and preceding open years. The release call for 2007/2008 policy year is set to 25%.
instructed	the management to contact each Member individually to discuss renewals for 2007/2008. After levying the mandatory general increase, the new call shall include reinsurance costs 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.

 

Owner’s Protection & Indemnity

Premiums

All premiums are debited as advance and supplementary calls. It is anticipated that this policy year will be closed in the year 2010. The Board decided that the premium shall be debited in four instalments: at inception on February 20th, May 20th, August 20th and November 20th. For 2007/2008 the premium 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 2008. The current estimated supplementary call for 2007/2008 is 0%.

Release Call

The release call for 2007/2008 is at present set at 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).

Renewals

The premium for 2007/2008 will be based on the Member’s record for the five year period 2001-2005, including current year if adverse. Records and claims summaries are now available through the Swedish Club extranet, SCOL, available on the Association’s website. The information is updated overnight.

Payment of Premium

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

Limit of Liability

The overall liability of the Association for 2007/2008 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. In respect of P&I Excess War Risk Cover the limit is USD 500,000,000 and in respect of war liabilities arising from Bio-Chem etc, the limit is USD 30,000,000.

Lay-up Returns

Members are allowed up to 50% premium returns for vessels laid up in a safe port for more than thirty (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 neither granted for vessels less than 500 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.

Enhanced survey and reporting requirements

As a result of increased focus on sub standard shipping, rigid rules have been adopted for collection of information and surveys on ships entered or entering the Association.

2007 Renewals: Current Members with tankers – ten (10) years or more – built 1997 or earlier.
The Member shall inform the Association if the vessel has carried HFO as cargo during 2006. In the affirmative the vessel will be subject to a condition survey, unless:

i. a condition survey has been carried out during last twelve (12) months;
ii. a Special Survey has been carried out during the last six (6) months;
iii. the vessel has achieved CAP 1 or CAP 2 status

Each vessel carrying HFO as cargo shall be surveyed every three (3) years thereafter.

DEFINITION HFO: By Heavy Fuel Oil is meant a residual fuel with a kinematic viscosity of 380 centipoise when measured at 50 degrees Celsius by test method ISO 3104.

All vessels entering the Club for P&I cover – twelve (12) years or more – built 1995 or earlier. All vessels with an age of twelve (12) years or more will be subject to a condition survey to enter the Club for P&I.

The Club may require, at its own discretion, a condition survey for any ship entering the Club even if the ship is less than twelve years of age.

P&I Rule changes and additions valid from February 20th 2007

Rule 9
Rule 9 – amendments to section 1 and additional section 2

Charterer’s Liability and Consortium vessels

Section 1

Liabilities, costs or expenses under Rules 3-8 incurred by the Member in his capacity of charterer of the entered ship.

However, the liability of the Association is subject to the following exclusions and limitations

(a) all exclusions and limitations applicable to the cover of a Member who has entered his ship for Owner’s risks,

(b) liability in excess of the amount to which the Member should have been able to limit his liability if he had been the registered Owner of the entered ship,

(c) liability in respect of loss of or damage to the entered ship or equipment, spare parts and stores on board,

(d) the Association’s liability for any and all claims in respect of a Charterer’s liability shall be limited to such sum or sums and be subject to such terms and conditions as the Association may from time to time determine.

The Member is not entitled to laid-up returns as provided in Rule 28.

Section 2

1.                                                                                                          Definitions

In this Rule the following expressions shall have the following meanings:

Consortium Agreement	any arrangement under which a Member agrees with other parties to the reciprocal exchange or sharing of cargo space on the entered ship and consortium vessels.
Consortium Vessel	a vessel or space thereon, not being the entered ship, employed to carry cargo under a consortium agreement.
Consortium Claim	a claim as described in paragraph 2 of this section of Rule 9.

2. Consortium Claims

A claim shall be a consortium claim where:

(a) it arises under a P&I entry of an insured ship; and
(b) it arises out of the carriage of cargo on a consortium vessel; and
(c) the Member and the operator of the consortium vessel are parties to a consortium agreement; and
(d) at the time the event giving rise to the claim occurs there is employed by the Member pursuant to the consortium agreement a vessel entered on behalf of the Member in the Association or entered in another association which is a party to the Pooling Agreement.

For the purpose of a consortium claim under this Rule the consortium vessel shall be treated as a ship entered on behalf of the Member under a charterer’s entry.

3. Allocation of Consortium Claims

Where a ship under an Owner’s entry and a ship under a Charterer’s entry are both employed by the Member pursuant to a consortium agreement at the time of the event giving rise to the consortium claim occurs, the consortium claim of the Member shall for all purposes of these Rules be treated as a claim arising in respect of the Owner’s entry of the Member.

4. Aggregation

Where the Member has more than one ship employed pursuant to the consortium agreement at the time the event giving rise to a consortium claim occurs, all such ships shall be deemed to be an entry of one ship.

Where one or more ships of a Member is employed pursuant to the consortium agreement at the time the event giving rise to a consortium claim occurs and the Member has an entry in respect of any of those ships in the Association or any other association which is a party to the Pooling Agreement

(a) each such ship shall be deemed to be a part entry of one ship in the Association and the other association(s) which is party to the Pooling Agreement; and
(b) where consortium claims incurred by the Association and the other association(s) in respect of the ship arising from that event out of the carriage of cargo on one consortium vessel in the aggregate exceed the amount specified in paragraph 5 of this section, the liability of the Association for such consortium claims shall be limited to that proportion of the sum specified in paragraph 5 of this section that the consortium claims recoverable from the Association in respect of each part entry bears to the aggregate of all the consortium claims incurred by the Association and any other association which is a party to the Pooling Agreement.

5. Limit of insurance

The Association’s liability for any and all claims in respect of a consortium claim shall be limited to such sum or sums and be subject to such terms and conditions as the Association may from time to time determine.

Comments:

This provision has been introduced as a result of changes in the Pooling Agreement in respect of liabilities for cargo claims arising on so called consortium vessels. Consortium Agreements are arrangements where two operators agree to use cargo space on each others’ vessels.

Rule 4

Rule 4 section 4
Additional section – Straight Bills of Lading

(c) as regards a non-negotiable bill of lading, waybill or similar document when delivery has been made without production of that bill of lading, waybill or document by the person to whom delivery is made, where such production is required by the express terms of such bill of lading, waybill or document or by operation of law”

Comments:

Following a decision by the English House of Lords (The “Rafaela S”) it has transpired that a carrier may be under an obligation to require production not only of negotiable bills of lading but also non-negotiable bills of lading to effect proper delivery. Such an obligation can derive either from the bill of lading text itself or by the operation of applicable law. As a result, International Group of P&I Clubs has decided to treat failure to deliver cargo without production of a non-negotiable bill of lading, when required, as an excluded risk under the Pooling Agreement. The added section to Rule 4 section 4 is made to reflect this change.

Old Years

The current position on the old years is as follows:

Year	Status	Estimated Additional Call	Release Call
2003/2004 and earlier	Closed	–	–
2004/2005	Open	0%	10%
2005/2006	Open	0%	25%
2006/2007	Open	0%	25%
2007/2008	Open	0%	est 25%

 

Charterers’ Limited Liability Cover

For 2007/2008 the Association also offers a limited cover for Charterers including Charterers’ Liability to Hull. The overall limit is limited but may be arranged up to
USD 300,000,000 any claim or occurrence. For further details, please contact each Team respectively.

The Reinsurance programme for 2007/2008 is still being negotiated by the International Group of P&I Clubs. Further information of reinsurance, special covers, US trading et cetera will be provided prior to the new Policy Year.

Yours sincerely,The Swedish ClubFrans Malmros