In this paper, the combination rule for circumferential multiple-cracked pipe assessment is investigated using finite element damage analysis. The FE damage analysis based on the stress-modified fracture strain model is validated against limited fracture test data of two circumferential surface cracked pipes. Then systematic parametric study is performed using FE damage analysis for symmetrical surface cracked pipes. Failure bending stresses are calculated using the combination rule and the net-section collapse load approach for single crack provided in ASME BPV Code. It is found that predicted failure bending stress using the combination rule might be non-conservative when the distance between two cracks is short. To overcome the problem, a new combination criterion based on crack dimensions is proposed and compared with numerical data.