American Club Circular No. 43/16 1 DECEMBER 15, 2016 CIRCULAR NO. 43/16 TO MEMBERS OF THE ASSOCIATION Dear Member: CHANGES TO THE RULES OF THE ASSOCIATION FOR THE 2017 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, 2017. They derive from a continuing review of the language of the existing Rules in light of recent developments, 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 Risks and Losses Covered (Rule 2) – STOPIA and TOPIA The IOPC Funds recently confirmed amendments to the Small Tanker Owners Pollution Indemnification Agreement (STOPIA) 2006, as well as to the Tanker Owners Pollution Indemnification Agreement (TOPIA) 2006, most substantively to address the risk of future sanctions legislation which might affect the ability of International Group clubs to reimburse the 1992 Fund/Supplementary Fund under these agreements. To ensure that these amendments are fully incorporated in the basic contractual conditions concerning the recoverability of STOPIA or TOPIA claims, the current wording of Class I, Rule 2, Sections 14.5 and 6 will be amended to read as follows, the changes in question being tracked in red. 5. Liability, costs and expenses of the Member assumed in respect of an insured vessel which is a “Relevant Ship” as defined in the Small Tanker Owners Pollution Indemnification Agreement 2006 (STOPIA) 2006 (as amended) (STOPIA 2006). A Member who has insurance in respect of such vessel shall, by virtue of entry with and through the agency of the Association, and unless the managers otherwise agree in writing, become a party to STOPIA 2006 (as amended) for the period of entry of such vessel in the Association. In the event that the Member exercises his rights under STOPIA 2006 (as amended) to withdraw from that agreement, and unless the Managers have agreed in writing, or unless the Directors otherwise determine, there shall be no cover under this Rule 2, Section 14 in respect of such vessel so long as the Member is not a party to STOPIA 2006 (as amended). 6. Liability, costs and expenses of the Member assumed in respect of an insured vessel which is a “Relevant Ship” as defined in the Tanker Owners Pollution Indemnification Agreement (TOPIA) 2006 (as amended). A Member who has insurance in respect of such vessel shall, by virtue of entry with and through the agency of the Association, and unless the managers otherwise agree in writing, become a party to TOPIA 2006 (as American Club Circular No. 43/16 2 amended) for the period of entry of such vessel in the Association. In the event that the Member exercises his rights under TOPIA 2006 (as amended) to withdraw from that agreement, and unless the Managers have agreed in writing, or unless the Directors otherwise determine, there shall be no cover under this Rule 2, Section 14 in respect of such vessel so long as the Member is not a party to TOPIA 2006 (as amended). War Risks – certified liabilities The proviso to Class I, Rule 3, Section 1.1 requires amendment to take account of the changes in regard to TOPIA and STOPIA to which reference as made above, as well as amplification to take account of Athens Convention/EU PLR and Nairobi ROW Convention certified liabilities. I