five years, have approved several major changes to the operating structure of the company.

But they have decided not to go ahead with a retrospective premium call provision, which would have provided OIL with greater short-term financial flexibility.

Mr. Doyle Stephens, OIL's president and CEO, said the scheme was not adopted because of OIL's "considerably improved financial position'', which included capital and surplus of $806 million and total assets of $1.581 billion at June 30.

Mr. Stephens said shareholders, who met on Tuesday at the Southampton Princess Hotel, had approved the following key changes in the area of coverages: Effective January 1, 1994, the basic OIL limits for all members will increase to ten percent of a policyholder's assets up to a maximum of $200 million per occurrence. The Excess Limits Endorsement (currently $50 million) will be eliminated and the annual aggregate percentage will remain at 150 percent of the per occurrence limit.

Replacement cost coverage remains as an optional endorsement, subject to an appropriate premium surcharge.

Restoration and Redrilling coverage will be integrated, at no additional charge, into the basic package of coverages, subject to a $50 million sub-limit.

Several changes have also been approved for incorporation into the company's rating and premium plan.

Mr. Stephens said this will simplify the overall pricing structure and ensure that OIL's future underwriting overall ratio of losses and expenses to premium will be less than 100 percent.

The changes were the result of recommendations developed by the company's board of directors as part of a comprehensive review of OIL's coverages and rating structure.

Mr. Stephens said: "The changes which have been adopted reaffirm OIL's primary objective of maintaining a financially viable, stable and cost-effective facility serving the insurance needs of the members.'' OIL is a mutual insurance company that provides property, well control and pollution liability insurance to its shareholders, who include Philips Petroleum, Mobil, Occidental, Shell, TOTAL and several other large petroleum companies.

The company began operations in Bermuda in 1972 after the commercial markets stopped providing petroleum companies with adequate insurance coverage and limits, particularly for polllution laibility.

The principal aim of OIL is not so much to make money but to ensure acceptable insurance costs for shareholders and to provide policies that meet shareholders' needs.

OIL's only profit over the last five years came in 1990 when it made $27.5 million.

The company was hit by several catastrophes in the industry since the late 1980s, including the Piper Alpha disaster in the North Sea which contributed to a loss of $434.5 million in 1988.

OIL also lost $262 million in 1989, $8.84 million in 1991 and $124 million in 1992. (See chart).

Since 1972, OIL has earned net premiums of $2.3 billion and incurred net losses of $2.6 billion. Investment income from portfolio operations has totalled $1.1 billion during this period.

For the six months to June 30, the company earned $92 million while the equity value of its investment subsidiary increased by $125 million.