7 February 2020 TO ALL CLASS 7 (WAR RISKS) MEMBERS Dear Sir or Madam WAR RISKS RENEWALS – POLICY YEAR 2020/21 Advance Contribution Rates Advance Contribution rates were set with effect from 20 February 2020 and have been notified to Members individually. A 50% reduction in rates will be granted for Entered Ships trading exclusively in one of the following areas: (i) Europe (but including the Mediterranean and Black Sea); (ii) USA and Canada (excluding Panama Canal transits); (iii) Australasia. Extensions to trading outside of any of these areas will be covered on the basis of a minimum period of three months. Nuclear and Cyber Risks Members will be aware that the current Terms of Entry contain an exclusion of Nuclear and Bio Chem risks, Rule 4.D.3, and Computer Virus (or Cyber) risks, Rule 4.D.7. Members have no cover for the risks excluded by Rules 4.D.3.1 to 4.D.3.5 (other than in Rule 4.D.3.6), or Rule 4.D.7. The Association arranges reinsurance of this War Risks Class through The Combined Group of War Risks Associations (the Group) and is pleased to advise that for the Policy Year commencing Noon GMT on 20 February 2020, the Group's reinsurers have again agreed to provide limited cover for claims which would otherwise have been excluded by each of these Rules 4.D.3 and 4.D.7 subject to a limit of USD 50,000,000 any one event and in the aggregate of all claims by Members of all Associations within the Group occurring during the Policy Year. The USD 50,000,000 aggregate limit will apply separately to claims under 4.D.3 and 4.D.7. - 2 In order to allow for calculation of aggregated claims, it is necessary to limit the time for such claims to be presented – all claims must therefore be notified within 30 days of the end of the Policy Year and, as a consequence, it will only be possible to settle claims after this time. The Member's Terms of Entry continue to include the following additional terms: Nuclear and Bio Chem Risks (a) Rule 4.D.3 shall not apply unless and until claims which would otherwise have been excluded by this Rule have exceeded USD 50,000,000 in the aggregate as below. (b) Subject to (c) below, the Association's liability for claims recoverable by virtue of (a) above arising under any one Entry and under all Entries in Class 7 of the Association during the Policy Year shall not exceed USD 50,000,000. (c) In the event that there is more than one such claim under an Entry in this Association or in any other Association which participates in The Combined Group of War Risks Associations, the aggregate recovery from all associations shall not exceed USD 50,000,000 and the Insured Owner shall be entitled to recover only such proportion as the amount of the claim or claims under his Entry bears to the aggregate of all such claims recoverable pursuant to paragraph (a) above under Entries in this Association and any other Association which participates in The Combined Group of War Risks Associations during the Policy Year. (d) In addition to the Insured Owner's obligation to promptly notify the Association in accordance with rule 4.E.12.1, the Association shall have no liability for any claim or claims arising by virtue of (a) above unless the casualty, event or matter liable to give rise to such a claim is notified to the Association by the Insured Owner within 30 days from the end of the Policy Year, whether or not the Insured Owner is aware of the casualty, event or matter at that time. (e) This extended cover is reinsured by