We refer to Our Special Circular No.10-004 of 14 June 2010 regarding the "Report on the 569th Meeting of the Board of Directors" and No. 10-006 of June 25 regarding the "Special Clause for Iran Sanction Act".

As you know well, our Association has introduced the "Special Clause for Iran Sanction Act" to the insurance contracts of all ocean-going vessels with effect from 25 June 2010. As the results, if a Member has exposed or will expose the Association to a material risk of being or becoming subject to a sanction, prohibition, restriction or other adverse action by a competent authority or government, which may materially affect the Association, the Association may be entitled to cancel the contract of insurance by invoking the Rules 11.3 (3).

To the same effect and for the purpose of defining the condition of application, we will introduce the following amendment to the Rules of the Association with effect from 1 November 2010 while simultaneously terminating the above "Special Clause for Iran Sanction Act".

The extracts of the relevant provisions are shown as below:

RULE 11 CESSATION OF INSURANCE CONTRACT