mutuals from Hamilton offices, is gauging oil company interest in a new mutual called Green Ocean that would have provide evidence of financial responsibility under the requirements posted by the US Oil Pollution Act of 1990.

Senior vice president, Mr. Douglas A. Kline said: "We are really in the formative stages on this whole thing. We are currently surveying various oil companies to see if there is enough groundswell of interest to take this thing forward.'' Mr. Kline said that while US oil companies have been concerned to provide a back-up plan for insurance in the event that ship owners have none for voil tankers serving the US, the proposed new company would not provide insurance, only Certificates of Financial Responsibility (COFRs).

And while there is real concern that the flow of oil to the US would substantially slow down because tanker owners may not be able to obtain COFRs required by the US Coast Guard for entry through US waters, Mr. Kline said the new company may be formed whether that threat is realised or not.

Tanker owners are required to gain COFRs by the end of this year under the 1990 Oil Pollution Act.

"The company could be set up even if there is no shut down,'' he said.

"There may be an interest on the part of the industry to go ahead with it anyway. It is not a function of the industry sitting on the sidelines waiting to see if oil trade is threatened and then have this thing set up. It may be set up anyway.

"It would be specifically designed to deal with the financial guarantee requirements under the Oil Pollution Act 1990, which relates to oil movements in US waters.

"It would appeal to people involved in oil trading within the territorial waters of the US. It would be for the cargo owners, if the ship owners are unable to provide the evidence of financial responsibility. We are still surveying the oil companies to see if there is a critical mass of people out there who would be interested in setting up a facility of this manner.

"It is quite likely that the company would be set up in Bermuda.'' The plan would involve letters of credit or other suitable forms of financial guarantees to provide the capital base for the company.

Mr. Kline said: "As to capitalisation, in terms of total resources, the company would probably have to be set up to meet the largest possible COFR out there, which would be in the area of $300 million. That would be the type of structure ... for this facility if it does get off the ground.

"The capitalisation could take the form of a small amount of initial capital just to get the company up and running and say an additional $300 million in commitments from the various members in letters of credit and things like that to form the basis for it.''