acquire Shoreline Mutual Management (Bermuda) Ltd., the management company for Shoreline Mutual.

Shoreline operates out of the Mutual Risk Management building on Church Street. And with the new acquisition, it is expected that another three to six staff would be needed.

The surprise announcement came as Shoreline lawyer Mr. Hugh Bryant was leaving the Island to return to his London office at solicitors Penningtons, where he is a partner.

"It's a very fast moving situation,'' he said on the way to the Airport. "It doesn't alter any of the plans for Shoreline. We are still going ahead with the programme. There's nothing more to say at the moment. It still could be another couple of days before the details are worked out.'' Shoreline is a Bermuda Protection and Indemnity (P&I) club formed to provide ship owners with excess pollution liability coverage and evidence of financial responsibility, needed to obtain Certificates of Financial Responsibility (COFRs) from the US Coast Guard.

The COFRs are required, starting December 28 for some ships, under the US Oil Pollution Act 1990 for all vessels entering US waters.

Shoreline has received US Coast Guard approval to furnish guarantees for COFRs up to $395 million, according to yesterday's announcement.

Mr. Bryant and Shoreline Director, Appleby, Spurling & Kempe partner, Mr.

David Doyle, refused to say any more about the deal to acquire the management company.

But Mutual Risk Management vice president and chief financial officer, Mr.

James C. Kelly, said: "The opportunity came along and we decided to go with it. We've been partly instrumental in getting Shoreline this far and also very active in the placing of the reinsurance with Centre Re and the others.

"I think that everybody felt comfortable with us assuming a more active role in the running of the entity.

"We have been involved in the Shoreline project for about six months and the negotiations have lasted a couple of weeks. It's an exciting adventure for us, a little bit of diversification. The actual structure is excellent with Centre Re playing an active role in the reinsurance.

"We seem to have the backing of the P&I Clubs. And Shoreline has had a lot of applications in recent weeks.'' Mutual Risk will be collecting management fees from Shoreline Mutual.

Yestyerday's announcement was the first time it had been acknowledged that Shoreline had permission from the US Coast Guard to be a COFR guarantor at the $395 million level, making it the only independent facility so far that could provide cover for even the largest ships in the world.

The statement said: "The reinsurance supporting Shoreline's programme is provided by Centre Reinsurance (Bermuda) Ltd. in conjunction with Willis Faber North America and Park International Ltd., a Mutual Risk subsidiary.

"The acquisition of Shoreline Management consolidates Mutual Risk's position as the manager of this new, and potentially very large, provider of mutual insurance to major shipping companies entering the US. Terms of the acquisition were not announced.'' Mutual Risk Management Ltd. provides risk management services to clients in the US, Canada and Europe, who are seeking alternatives to traditional commercial insurance for certain of their risk exposures, especially workers' compensation. Mutual Risk Management Ltd. (MM) common shares are listed on the New York and Bermuda Stock Exchanges.