THE RUSSIAN P&I POOL

In summer 1996, five Russian Insurance companies formed the Russian P&I Pool in order to accommodate domestic shipowners' liability insurance business in a modern way, comparable to international standards. In June 1998, the Pool Agreement was reviewed. To cope with the growing business and to further strengthen the Pool's financial resources, the number of Pool companies thereafter was increased to presently 12 insurance companies. At the same time, the Pool carefully opened itself up for business from countries which traditionally had enjoyed strong trading and shipping links with Russia. Therefore, the present policy aim of the Pool is to provide shipowners and charterers with a strong liability insurance and hereby not only to serve the well developing Russian shipping industry but also the shipping industries of CIS/neighbouring countries.

The commitment of the Pool member companies to servicing the shipping and transportation industries of the countries mentioned, in both national and international activities, affords them with good connections to and support from authorities and ministries of transport as well as from various shipowners' associations and federations in the region.

The Pool offers insurance protection to general cargo vessels, container vessels, bulk carriers (up to 35.000 GT), reefer vessels, tankers (up to 6.000 GT, not exceeding 20 years of age), fishing vessels and all types of auxiliary vessels like research vessels, tugs, supply vessels, floating cranes, port and river craft, icebreakers etc.

As indicated above, the Pool is mainly designed for small and medium sized tonnage which has not enjoyed any insurance cover so far or does not feel properly attended either by the underwriting approach or by the service of the big international P&I Clubs or other insurance providers. Its cover is available not only to shipowners and charterers but (on the terms of an owner's cover) to managers, operators and bareboat charterers as well.

Offering similar international cover as the traditional P&I Clubs, the Russian P&I Pool offers its cover on the basis of fixed premiums. In contrast to the traditional "Club" system, the advantage of fixed premiums is that the insurance premium figure given to the shipowner or to the charterer at the moment when he buys the insurance represents his full and final insurance cost, allowing the shipowner or the charterer to fully and reliably budget such costs.

The Pool's insurance cover is provided by way of standard and individual insurance conditions which cover all essential aspects of shipowners' liability risks as laid down in the Rules of the Russian P&I Pool. The Pool provides standard cover with a limit of up to US$ 500,000,000 (or its equivalent in other currencies). War cover limits of up to US$ 50,000,000 can also be arranged if necessary.

It is important to point out that the cover of the Russian P&I Pool also comprises the necessary assistance to shipowners as regards providing security or guarantees to avoid a vessel's arrest in claims cases which are covered under the policy.