At its meeting on November 1st 2002 and January 21st 2003 the Board of Directors decided on its policy with regard to premium and deductibles for the policy year February 20th 2003 to February 20th 2004.

The Board of Directors

noted	that the open policy years have developed according to predictions but that claims continue to increase in both numbers and costs. The result is that premiums will not cover claims and that the poor investment income experienced will not cover the negative balance.
decided	that calls have to be levied to reflect the Association’s exposure. A general increase of 25 % shall be levied and the Association shall aim to maintain a 0 % supplementary call for 2003/2004 and preceding open years.
instructed	the management to contact each Member individually to discuss renewals for 2003/2004. After levying the mandatory general increase, the new call shall include reinsurance cost and reflect 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 2001/2002.

In short:

A 25 % general increase An estimated supplementary call of 0 % A release call of 25 % for 2003/2004 Call to be debited in four instalments

The Board of Directors decided for the insurance year 2003/2004:

Owner’s Protection & Indemnity

General Increase
The 2003/2004 Estimated Total Call (ETC) shall be increased by 25 % prior to any increase for claims records and/or other adjustments of premium. Any increase in reinsurance cost shall be added to the call.

Premiums
All premiums are debited as advance and supplementary calls. It is anticipated that this policy year will be closed in the year 2005. The Board decided that the premium shall be debited in four instalments: at inception, 20th February, 20th May, 20th August and 20th November. For 2003/2004 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 2003. The current estimated supplementary call for 2003/2004 is 0 %.

Release Call
The release call for 2003/2004 is 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 2003/2004 will be based on the Member’s record for the five year period 1997-2001, including current year if adverse. Records and claims summaries are now available through the Swedish Club extranet, SCOL. The information is updated overnight.

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.

Reinsurance – INFORMATION NOT YET AVAILABLE
The Association is participating in the International Group of P&I Clubs’ general reinsurance arrangement in excess of USD 30,000,000. The net cost for this cover is distributed as follows:

	Tankers carrying persistent oil as cargo:	USD TBA per GT
	Tankers carrying non-persistent oil as cargo:	USD TBA per GT
	Passenger vessels:	USD TBA per GT
	Other dry cargo vessels:	USD TBA per GT

The Association has also elected to cover part of the retention below USD 5,000,000 to protect Members’ exposure.

Oil Pollution/United States Oil Pollution Surcharge for Tankers
The oil pollution cover provided by the Association for the Policy year 2003/2004 is as follows:

Limit of Liability	USD 1,000,000,000
Declarations	Members have to declare all voyages by tankers each quarter in arrears. Forms for declarations will be made available to Members prior to the first declaration. The declarations are to be completed by May 20th 2003, August 20th 2003, November 20th 2003 and February 20th 2004 and returned to the Association. Tankers (including OOs and OBOs) carrying persistent oil any voyage will be regarded as carrying persistent oil for any such quarter. Members are advised to inform the Association immediately if a vessel, declared to the Association as not carrying persistent oil as cargo, is carrying a cargo of persistent oil. Members with OOs and OBOs declared as dry cargo vessels are advised to inform the Association immediately if vessels are carrying oil as cargo whether persistent or non-persistent.
Persistent Oil	All hydro-carbon mineral oils other than the non-persistent oils.
Non-persistent Oil	Oil which consists of hydro-carbon fractions:
	a.	at least 50 % of which, by volume, distils at a temperature of 340°C, and
	b.	at least 95 % of which distils at a temperature of 370°C when tested by the ASTM method D 86/87 or any revision thereof.
Trading to the United States	Tankers carrying persistent oil as cargo and calling ports or places within the United States and United States Exclusive Economic Zone (EEZ) as defined by OPA 1990 for loading or discharging are subject to additional premium. The United States/U.S. EEZ includes the District of Columbia, Puerto Rico, Guam, American Samoa, U.S. Virgin Islands and Northern Marianas.
U.S. Voyage	A U.S. voyage is any cargo voyage involving loading or discharging at any port or place in United States/U.S. EEZ as defined above. One cargo voyage involving loading or discharging at more than one U.S. port or place within U.S./U.S. EEZ shall be regarded as a single voyage. Discharging one cargo at a U.S./U.S. EEZ port or place and loading a new cargo at a U.S./U.S. EEZ port or place constitutes two voyages.
Member’s Responsibility	The Member is responsible to report to the Association if any cargo of persistent oil has been loaded, discharged or transhipped in the United States or within the U.S. EEZ. The Member is also responsible to determine whether or not a cargo is persistent. The Association retains its right to ultimately decide whether a cargo is to be considered as persistent.

Additional Premium U.S. – NOT YET AVAILABLE

Limit of Liability
The overall liability of the Association for 2003/2004 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.

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

Certificates
The Association will assist Members to obtain required certificates. It should however be noted that the Association’s undertakings are always limited to the Civil Liability Convention 1969 (CLC). Please contact us for information and for forms of application.

Certificate of Entry
It is recommended that all Members shall keep on board vessels entered in the Association a Certificate of Entry.

U.S. Terrorist Insurance Act of 2002
The scope of cover and rules of entry are under discussions and further information will follow in due course.

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 officila website for further information: www.state.ak.us/local/akpages/ENV.CONSERV/dspar/nontank

 

P&I Rule changes and additions valid from 20th February 2003
Rule 3 section 4:4 – amendment
Rule 11 section 2(h) – amendment
Rule 11 section 5 (a) – amendment
Rule 24 – new rule

 

BOLERO
See circular P.2384/1999. Any member involved in trading using Bolero shall inform the Association before comencing 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

---

1999/2000 and earlier	Closed	–	–
2000/2001	Open	0 %	25 %
2000/2001	Open	0 %	25 %
2002/2003	Open	0 %	25 %
2003/2004		0 %	25 %

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Charterers’ Liability Cover – NOT YET FINALISED

 

Renewals
The premium for 2003/2004 will be based on the records for the five year period 1997-2001, including current year if adverse. Records and updated claims summaries are available from the Swedish Club’s extranet, SCOL. Information is updated every night.

 

Charterers’ Limited Liability Cover – NOT YET FINALISED

 

Renewals
The premium for 2003/2004 will be based on the records for the five year period 1997-2001, including current year if adverse. Records and updated claims summaries are available from the Swedish Club’s extranet, SCOL. Information is updated every night.

 

Additional Covers – NOT YET FINALISED

 

P&I – Deviation cover

 

P&I – War Risks

 

In this circular we have dealt with our general terms. A few items are being negotiated and we will keep our Members informed.

Yours sincerely,The Swedish ClubFrans Malmros