waters.

Bermuda-based Shoreline Mutual (Bermuda) Ltd. is thought to be the leader in the race by a handful of different groups who are trying to provide such cover.

Mr. Hugh Bryant, partner in London law firm, Penningtons, which is Shoreline Mutual's chief legal advisers, said that the company will move to expedite the reinsurance programme quickly.

"We see Bermuda as the world capital for reinsurance,'' he said. "That is why we are here, to address the reinsurance companies directly. They are already involved in supporting protection and indemnity (P&I) clubs.

"Shoreline will retain cover on any one claim of up to $10 million. We have been discussing placing $290 million in cover with reinsurers.

"But it is not all being placed in Bermuda. It is also being offered on the continent, in the Lloyd's market and in New York this week.'' The effort is being coordinated in Bermuda through the firm Park International. Shoreline's directors are also here meeting with major shipping interests. They have just introduced Shoreline to a number of independent ship-owners. Other meetings were planned for this week.

New rules under the United States' Oil Pollution Act 1990, which will arise out of a report prepared by the US Coast Guard for the Department of Transportation, are expected before the summer.

Certain requirements were sought by US officials after the Exxon Valdez and other oil pollution tragedies. Included will be that US-bound ships will be required to have financial responsibility to cover claims,clean up and other financial ramifications of an oil spill.

A New York firm, Hill, Betts and Nash, is to prepare a prospectus for a bond issue to raise $300 million. Potential underwriters are already set to meet with Shoreline representatives. The bond issue will follow almost directly after the US government publishes the new rules in Washington.

Shoreline is keen to foster strong ties with P&I clubs, the founders said.

As a long-term objective, the mutual wants to dovetail its cover with that of the P&I clubs.

Mr. Bryant said: "Right now, we would be covering at the same level in some points. There is some overlapping. We would like to take the first $300 million in cover and let them come on top of us with another level.

"They have cover up to $500 million. We would like to have them place their $500 million on top of our $300 million.''