its membership, at no extra cost to members.

The move, now being considered, would mean Lloyd's market reinsurance would be used to cover an exposed 30-day window of potential risk exposure.

Centre Re reinsures Shoreline and has already bought retrocession of themselves for difference in defences. In the event that a P&I Club had a legitimate "policy defence'' against a claim as a result of an unknown pre-spill insolvency, there would be some question as to who would be liable for the clean up expenses.

The issue revolves around the US Coast Guard requirement for financial guarantees to ensure that ship owners would be able to pay for any potential spill in US waters.

Under P&I Club rules, there would be no cover for ship owners who become insolvent. But even in the event that Shoreline became aware of the insolvency, they would have to give 30 days notice to the Coast Guard to cancel the Certificate of Financial Responsibility (CoFR).

No matter how remote, there is a window then for the possibility of a ship's owners being rendered insolvent, just before the ship suffers an oil spill in US waters.

The concern was that in the event of such a claim, with insufficient funds in the mutual to cover it, there could be a supplementary call on the members.

But cover for such an event, which amounts to increased protection for the entire membership, is now being offered by Lloyd's to Shoreline at such an attractive price that they are expected to buy.

It is currently estimated that Shoreline has about 12 million gross tonnage of ships and Shoreline's success has brought the offer from reinsurers for the supplementary call insurance.

Mr. Paul Scope, president of Park International said, "We think that it (the risk) is more perception than anything else. But it is being offered to us at an attractive price. It wasn't offered to us before because we didn't have the mass. Now that there is enough tonnage in there, people are willing to give that cover.'' Park International is an insurance broker, a subsidiary of Mutual Risk Management Ltd. (MRM). MRM purchased Shoreline Mutual Management (Bermuda) Ltd. this year. Park International was the broker that arranged the reinsurance of Shoreline by Centre Re.

Mr. Scope said, "The additional cover is attractive to us, not that we think the exposure isn't remote. But if we can do it at a price where we don't have to add it on to the member's cost, then as a mutual we should do what we can for the members. It improves the product.

"I can't say for sure that we are going to go for it, but it is likely that we will make a decision in the next few days. We're favourably disposed to what we have seen. The managers can recommend a decision to the interim board and then await final word.''