fell in 1999 -- but the company said it was pleased with its overall performance.

The company said its operating and financial results reflected "a continuation of record levels of overall performance''.

Consolidated net Income was $351 million. Shareholders' equity reached $2,083 million, the highest level in the company's 29-year history.

Prior to operating expenses, OIL recorded 1999 underwriting and Investment income of $68 million and $291 million respectively.

Total assets were $3,093 million at year-end 1999.

Commenting on 1999 results, Jon R. King, President and Chief Executive Officer, noted that "shareholders' equity at year-end 1999 exceeded $2 billion for the second straight year.

This was a remarkable achievement, he said, considering that OIL paid special cash dividends of $200 and $300 million to shareholders in 1998 and 1999.

Without these dividends, shareholders' equity would have approached $2.6 billion, he said.

Mr. King explained that "the key driver of the Company's overall financial performance in 1999 was investment income. Broadly diversified portfolios were maintained by our two investment subsidiaries -- Oil Investment Corporation Ltd. and Oil Investment (Barbados) Ltd. These portfolios provided a solid platform to fully participate in a surging global investment environment.'' Comparable 1998 results were net income for the year of $488 million and December 31, 1998 shareholders' equity of $2,032 million. Net Income for 1998 included an accounting reclassification of its investment portfolios from "available for sale'' to "trading''.

OIL's net income dips As a result of this change, 1998 net income included a $171 million one-time adjustment for unrealised gains relating to the prior year.

Mr. King advised shareholders at the annual general meeting that OIL's Board of Directors, at a meeting held earlier in the day, declared another extraordinary dividend of $200 million payable on April 14, 2000.

He noted that this action was consistent with OIL's capital management process whereby "to the extent capital resources exceed pre-determined target levels, the Directors will take actions to deploy any excess financial resources for the benefit of its shareholders''.

Discussing 1999 underwriting results, Douglas A. Kline, senior vice president and chief operating officer, noted that OIL recorded seven new losses in 1999 with a total value of $54 million.

He commented that "due to the nature of business operations in the petroleum industry, the year-to-year underwriting results of OIL, as a catastrophe insurer, will be impacted by volatility brought about by uneven patterns of loss frequency and severity experienced by our shareholders. We are pleased, given the enormous financial pressures faced within the petroleum industry, that our 45 shareholders collectively experienced an excellent year in 1999 with respect to overall loss experience.'' Mr. Kline also advised OIL shareholders on the Company's experience with respect to the potential impact to OIL of the Y2K or "Millennium bug''.

"Such impact centred on the potential for losses to arise as a result of the failure of electronic equipment to correctly process the change of year form 1999 to 2000.

"Within the petroleum industry, it is estimated that companies spent in excess of $2 billion to ensure that their computer-based systems would be compliant when clocks rolled over into the year 2000. We are not aware at this time of any occurrences arising within the Company's membership that could result in a Y2K-related claim impacting OIL.'' Roger P. Paschke, Senior Vice President and Chief Financial Officer, reported to shareholders that OIL introduced the use of Extendable Commercial Notes ("ECNs'') which are new financing instruments in the capital markets.

He commented that "ECNs closely resemble standard commercial paper with the additional flexibility of providing the issuer with the option of extending the ultimately maturity of the Notes. These instruments result in greater efficiency in OIL's external financing arrangements. OIL is the first insurance company and the first non-US issuer of ECNs.''