Oil Insurance Limited, a mutual insurance company which serves the energy industry, announced it has reduced its premium payable amount by 7.5 percent.

The company provides a broad form of coverage and insures risks such as physical damage to property, well control, and pollution liability.

This is the second time the company has reduced its premiums this year. Oil's directors decreased the total amount of premium payable from the members by an additional $48.25 million, approximately 7.5 percent of the originally calculated amount at the beginning of the year. In combination with the premium reduction made in April 2008, the board has reduced premium by approximately 12.5 percent for the year.

Members will see this latest premium reduction in their fourth-quarter billings.

Oil also announced a plan to accelerate the 2005 hurricane claim settlements.

The press release stated: "The claims department plans on working vigorously to bring closure to these open claims. In addition, the board authorised the use of unrepaired damage settlements in the cases of Hurricanes Katrina and Rita.

"In conjunction with this decision, management increased scaling factors for the two storms. Katrina is now 40 percent and Rita is 55 percent."

Oil has an aggregation limit that caps exposure of any one event at $1 billion. Estimated claims arising from Katrina totalled $2.1 billion and, based on their scale, 40 percent of each member company's claim will be paid, while 55 percent of claims stemming from Rita will be paid.

The press release continued: "Cumulatively, these scaling factors represent approximately 85 percent of the total reserves on Oil's books. In the next several days, the claims department will release a specific communication to all affected shareholders detailing this accelerated plan and what a shareholder will need to do to take advantage of the unrepaired settlement component of the plan."

The board also approved 2009 per occurrence limits of $250 million.