Weather Derivatives

One of the areas causing us legal heart-burn in the weather derivatives area
here in the States is the insurance and re-insurance company counterparties.
In most states there are different laws applicable to insurance companies -
most of which are regulated - including entirely separate insolvency
regimes. Just another item for your radar screen.
---------------------- Forwarded by Mark - ECT Legal Taylor/HOU/ECT on
02/16/99 11:11 AM ---------------------------

Scott Sefton
02/15/99 04:31 AM
To: Mark E Haedicke/HOU/ECT@ECT, Mark - ECT Legal Taylor/HOU/ECT@ECT, Alan B
Aronowitz/HOU/ECT@ECT, Jeffrey T Hodge/HOU/ECT@ECT
cc:
Subject:

FYI
---------------------- Forwarded by Scott Sefton/LON/ECT on 02/15/99 10:32 AM
---------------------------

John Sherriff on 02/15/99 09:36:16 AM
Sent by: Iris Meunier
To: ECT Europe, Lynda Clemmons/HOU/ECT@ECT
cc:
Subject:

Dear all,

All activities in Europe with regard to Weather Risk Management products have
now formally been amalgamated into a global weather risk management group
managed by Lynda Clemmons in Houston. Having concluded two transactions in
Europe, the first being the first transaction of its type in Europe with
Scottish Hydro-Electric and a second in the Netherlands, we are encouraged
that the product will be as successful in the European market at managing
volume risk due to adverse weather as it has shown to be in the US.

In London, Nick Mooney will be heading the European Weather Risk Management
group reporting into Lynda in Houston. Nick's group will be responsible for
supporting all European Origination groups in the pricing and structuring of
these products. This management structure was put in place to enable all
European origination groups to have the maximum support on strucutring
weather products for their clients, ensure market development information and
intellignece is readily and easily desiminated across Euopean groups and is
designed to maximise the value to Enron of this new and exciting market. In
addition to supporting orignators, the Weather group will be responsible for
developing the hedge market for Weather Derivative Transactions with
non-energy counterparties across Europe - including the Insurance,
Re-Insurance, Finance, Broking and Retail sectors.

This new and exciting development in the risk management arena, is another
example of where Enron again has developed a product to manage a risk, which
was previously not manageable by our customers.

John Sherriff