Circular No. 3/99 - Excess Oil Pollution Cover



JANUARY 28, 1999




Dear Member:


$200 million excess of $500 million

As in previous years, an open cover facility has been arranged from Noon GMT, February 20, 1999 for acceptance of declarations by Members or their intermediaries subject to the conditions and rates as described below.

The insurance is to cover the Assured's legal liability for oil pollution claims as per the underlying policy or certificate of entry and to follow settlements of the underlying policies in all respects. The facility is subject to the OPA non-certification clause which reads as follows:


"Notwithstanding any other provision of this policy or of any underlying insurance, this policy of insurance is not evidence of financial responsibility under the Oil Pollution Act of 1990 or any similar Federal or State laws. Any showing or offering of this policy by the Assured as evidence of insurance shall not be taken as any indication that the underwriters consent to act as guarantor or to be sued directly in any jurisdiction whatsoever. The underwriters do not consent to be gurarantors or to be sued directly.

Please note that this is a direct insurance in the commercial market, and is not a reinsurance of the American Club.


Rates and conditions for 1999 are as follows (please note all rates are gross).


(1) Dry cargo vessels and gas carriers (not carrying oil as cargo) and passenger vessels: U.S. $0.020 per G.T. p.a. for worldwide trading, minimum 3,000 G.T.

(2) Clean tankers (defined as carrying other than persistent oil as cargo): U.S. $0.040 per G.T. p.a. for worldwide trading, minimum 3,000 G.T.

(3) Dirty tankers (defined as carrying persistent oil as cargo) other than (4) below: basic premium per G.T. p.a. excluding cargo voyages to the United States as underlying Club entry (minimum 3,000 G.T.).


Year Built Rate per G.T.
1995-99 U.S. $0.053
1990-94 U.S. $0.057
1985-89 U.S. $0.066
1980-84 U.S. $0.075
1975-79 U.S. $0.089
1974 & earlier U.S. $0.104

Vessels are deemed to have been built in the year in which they are shown as completed in Lloyd's Register of Shipping.

Plus: Voyages to the United States at an additional premium of U.S. $0.085 per G.T. per voyage (minimum 3,000 G.T.).

All features of the underlying Club premium calculation apply to this additional voyage premium, including the 20 voyage maximum and 50% tonnage for LOOP and transhipment.


(4) Dirty tankers of 3,000 G.T. and under continuously trading in United States waters will pay a flat premium of U.S. $6,500 in full and those between 3,001 G.T. - 3,999 G.T. will pay a flat premium of U.S. $7,750 in full.

Adjustments in premium may be made as follows:

I. Regardless of short periods, all declarations will be charged at the full annual rate, except for the following:


(a) Vessels for which the underlying certificate of entry is cancelled or endorsed to cancel, may be deleted from cover at pro rata return premium.

(b) Vessels for which a new underlying certificate of entry is issued or a current certificate of entry is endorsed to add, may be added from the date that the request for cover is made to the Association or to Miller Marine, at pro-rata premium from the date of attachment with the Association.

II. Where OBOs change from trading dry to trading with dirty products, or tankers change form trading clean to trading dirty, the change in the basis of declaration advised in the Association's Circular 2/99 dated January 27, 1999 will apply.

This means that if at any time during an applicable quarter a ship trades with dirty products then the full dirty tanker rates shown at basis (3) above will be payable for that quarter only, and the vessel will also become liable for U.S. voyage additional premiums. The applicable quarters are: February 20, 1999 to May 20, 1999; May 20, 1999 to August 20, 1999, August 20, 1999 to November 20, 1999 and November 20, 1999 to February 20, 2000.

III. No cover is available under this facility for charterers other than bareboat charterers and charterers named as Co-Assured on the underlying Owner's entry. Cover is always subject to the limits any one vessel arising out of any one event.

IV. All premium developed under (1), (2), (3) basic premium and (4) above, is payable at inception. Voyage additional premium under (3) is payable quarterly.

V. No laid-up returns.

VI. In respect of the U.S. voyage surcharge for parcel tankers, arrangements to follow the underlying Club entry and charges to be as follows:


(a) parcel tankers carrying 5,000 metric tons or less of persistent oil as cargo: U.S. $0.085 per G.T. per voyage calculated on 3,000 G.T.;

(b) parcel tankers carrying between 5,001 and 10,000 metric tons of persistent oil as cargo: U.S. $0.085 per G.T. per voyage calculated on 7,500 G.T.;

(c) parcel tankers carrying 10,001 metric tons and over of persistent oil as cargo: U.S. $0.085 per G.T. per voyage calculated on actual G.T. of the vessel.

VII. A 12.5% discount will be allowed from the above rates in respect of tankers equipped with segregated ballast tanks in accordance with the requirements of regulation 13 of Annex 1 to MARPOL 73/78.


INFORMATION: A parcel tanker is defined as a ship constructed or adapted primarily to carry cargoes of noxious liquid substances in bulk, and capable of carrying at least 10 grades simultaneously, having been issued with an international certificate of fitness for the carriage of dangerous chemicals in bulk.

VIII. A 17.5% discount is available from all rates.


The limit of U.S. $200,000,000 can be increased to U.S. $250,000,000 in respect of tankers while in Californian waters only, at the following further additional premiums:


U.S. $0.02125 per G.T. per voyage in respect of dirty tankers only.
U.S. $0.00425 per G.T. per voyage in respect of clean tankers.
Dirty tankers 3,999 G.T. and under continuously trading in Californian waters will pay a flat additional premium of U.S. $1,615 in full.


All other terms and conditions and features of underlying premium calculations to apply.

If any Member requires any further detail in regard to the foregoing, the Managers will be pleased to respond.

Yours faithfully,

Joseph E.M. Hughes, Chairman & CEO
Shipowners Claims Bureau, Inc., Managers for