3 February 2015 TO ALL MEMBERS AND ASSUREDS Dear Sirs 2015/2016 - Policy Year arrangements This Circular provides an update and summary of the following arrangements for the 2015/16 Policy Year. Rules As notified in the Association’s Circular dated 14 January 2015, the Class 5 (P&I) and Class 8 (FD&D) Member Meetings were held on 28 January 2015. The proposed amendments to the Rules of the Classes were approved will take effect from noon G.M.T. on 20 February 2015. Members are reminded that the P&I and FD&D Rules (together with the War Risks Rules) can be accessed at http://www.londonpandi.com Corporate Structure As advised in the FAQ document attached to the 14 January Circular, the Association’s restructuring will be accomplished by the Rule changes which were approved at the Meetings referred to above; and by the proposed changes to the Bye Laws and Rules of the Bermuda Club, notified in the Circular to Members dated 21 January 2015. If these latter changes are approved at the Special General Meeting and Class Meetings on 12 February 2015, the restructuring will take effect at noon G.M.T on 20 February 2015. Members are reminded that there will be no impact on membership of and cover from the Association. The restructuring is in order to maintain the optimum corporate organisation from a regulatory and tax perspective and in preparation for the implementation of the Solvency II directive, anticipated in January 2016. International Group (IG) - Pooling and Reinsurance Arrangements Details of the IG’s pooling and reinsurance arrangements for 2015/16 can be accessed here . Class 5 (P&I) Limits on Cover* and Overspill Reinsurance For oil pollution claims, the limit of the Association’s aggregate liability will continue to be US$1 billion for any one occurrence. For Passenger/Seamen claims, its aggregate liability for any one occurrence will continue to be limited to US$2 billion in respect of liability to Passengers; and to US$3 billion in respect of liability to Passengers and Seamen. The overall limit of the IG’s excess of loss contract is US$2 billion (in excess of US$80 million). The IG has once again purchased reinsurance for claims up to US$1 billion in excess of that limit, to protect Members against the risk of overspill calls arising from any catastrophe claims up to US$3.08 billion. Full details are set out in the Class 5 (P&I) Rules including Rules 11 and 33, and as may appear in individual terms of entry. * For entries under Rule 10, Special Cover for Charterers, see overleaf. - 2 Excess War Risks P&I Cover The excess war risks P&I cover provided to Members pursuant to Rule 15.2 will again be provided in 2015/16. The limit of the cover remains at US$500 million, any one accident. Members are reminded that the cover is subject to an excess of the proper value of the entered ship, or of the amount recoverable from war risks underwriters or other interested insurers, whichever is the greater. Members are referred to the excess war risks P&I clause (20 February 2015) for full details of the cover. This includes the termination provisions and exclusions to which the cover is subject, the latter of which contains a minor alteration in respect of bio-chem claims. This serves to clarify that clause 4 (A) (ii) (a computer virus exclusion) does not operate to exclude losses arising from the use of any computer, computer system or computer software programme or any other electronic system in the launch and/or guidance system and/or firi