A merican Club Circular No. 4 6 / 20 1 DECEMBER 22, 2020 CIRCULAR NO. 46/20 TO MEMBERS OF THE ASSOCIATION Dear Member: CHANGES TO THE RULES OF THE ASSOCIATION FOR THE 2021 POLICY YEAR Please note that your Board of Directors has approved the following changes to the Club’s Rules to take effect from February 20, 2021. They derive from the review and amendment of the International Group’s Pooling Agreement in regard to the recoverability of fines for smuggling and the confiscation of vessels in consequence thereof; the continuing review of the language of the existing Rules in light of claims experience and other developments generally; and a desire to maintain good housekeeping in the interests of the clarity and efficacy of the terms on which Members are insured by the Club. The changes are set out in the order in which current Rules appear in the Rule Book. Class I: Protection and Indemnity Insurance Introductory: Interpretation: Membership: General Provisions (Rule 1) Section 4. General Insurance Provisions In order to preserve the Club’s rights, subject to the exercise of the Directors’ discretion in appropriate circumstances, on those occasions where hull and P&I interests intersect in the handling of casualties and the Member has no hull insurance, a new Rule 1, Section 4.14 under the heading of ‘Other Insurances’, will be added as follows: Other Insurances 14 Without prejudice to the provisions of Rule 3, Section 2.5 and Rule I, Section 4.37, every insured vessel shall be deemed to be fully insured without deductible for risks under the terms of a policy written on the American Institute Hull Clauses (June 2, 1977) Form and a policy written on the American Institute Increased Value and Excess Liabilities Clauses (November 3, 1977) Form, or other equally wide form of insurance, whether or not the insured vessel is fully covered under such policies by insurance and excess insurance sufficient in amount to pay in full and without limit all such loss, damage, sacrifice or expense. Unless and to the extent that the Directors in their sole and absolute discretion otherwise decide, there shall be no recovery for any liabilities, costs and expenses for which the insured vessel is deemed to be insured under this Section 4.14 or which the Member is entitled, or would be entitled, to recover under any other insurance or otherwise howsoever. The incorporation of the above new Sub-section to Rule 1, Section 4 will entail the renumbering upward of the current Sub-section 14 et seq. American Club Circular No. 4 6 / 20 2 Risks and Losses Covered (Rule 2) In consequence of the introduction for 2021 of new language in the Pooling Agreement following consultation among all Group clubs on the recoverability of smuggling fines, a change to the Club’s Rule in this respect will be required. In this context, too, the language applying to claims concerning the confiscation of vessels will also be amended to ensure that the recovery of such claims is granted by the Directors as a matter of their sole and exclusive discretion rather than, to any extent or degree, as of right. Accordingly, Class I, Rule 2, Section 9 will be amended to read as follows for the forthcoming policy year: Section 9 FINES AND PENALTIES Liability for fines and penalties imposed by any court, tribunal or authority for: 1. short- or over-delivery of cargo, or failure to comply with regulations concerning the declaration of goods, or documentation of cargo (other than fines or penaltie