Cover Limit for Passenger’s and Seamen’s Risks and Overspill Protection Cover 13 February 2007 No.06-010 At its meeting on 6 February 2007, our Club's Board approved the proposal for a limit on Club cover for passengers' and seamen's risks and for a collective overspill protection cover, in the interests of achieving consensus among the International Group of P&I Clubs (Group). This proposal has already been approved by the requisite majority of the Group Clubs and will come into effect on 20 February 2007. 1.Background Members may be aware that there has been a discussion within the Group regarding the level of cover provided for passenger risks. This debate has been highlighted by the fact that the 2002 Protocol to the Athens Convention, which provides for a high liability limit and for direct action against insurers,is likely to enter into force within the next year or two. The debate also recognizes the increasing high number of passengers and seamen on board cruise or other passenger ships. While it has been difficult to balance the interests of the owners of passenger ships with those of other types of vessels, the Group has, by securing appropriate reinsurance, found a solution that provides high levels of cover for passengers' and seamen's risks on board passenger ships, whilst minimising overspill claims exposure - the probability of which is considered, by some markets, to be increasing. 2.Limit on Club Cover for Passengers' and Seamen's Risks For the 2007 Policy Year, Club cover for passengers' and seamen's combined risks shall be limited to US$3 billion, with a sub-limit of US$ 2 billion for passenger claims only, each vessel each accident. The Special Clause "PASSENGERS AND SEAMEN LIABILITY LIMITATION CLAUSE"(please see attached) shall apply to all mutually entered ships which fall within the "Ocean Going Class". The insertion of a Special Clause is similar to that currently used to limit oil pollution liability to US$1 billion. 3.Overspill Protecti