The US Coast Guard on Friday approved the First Line scheme for the writing of Oil Pollution Act financial guarantees for up to $300 million.

A week ago, First Line announced it had won approval from the Coast Guard in principle to be the only commercial facility that had the right to provide such guarantees.

Now, they have the backing to provide guarantees for most ship owners.

The rival schemes for obtaining certificates of financial responsibility for trading in US waters, Shoreline Bermuda and Opaclub, are mutuals.

The First Line programme is promoted by Johnson & Higgins, and will be run by J&H Intermediaries in Bermuda.

Johnson & Higgins managing principal and senior vice president, Mr. D. Darby Duryea said, "We have actually issued guarantees and now we have been approved to write guarantees up to $300 million.

"Everybody was concerned about whether we would get the right to go as high as $300 million, but that has now been approved by the Coast Guard.

"Submissions are coming in from ship owners around the world in large quantities. This will answer the needs of the large, large majority of ship owners around the world. They will be able to comply with the CoFR requirements of the Coast Guard, to operate in the United States.

"We're real excited about it, and excited that it is happening here and that the relationships that we're developing with ship owners have been wonderful.

They are really supportive of what we've done.'' Principal and senior vice president, Mr. L. John Goldberg said, "We're not just the promoters of the programme, but also major brokers, or at least the most knowledgeable brokers in this area.'' Mr. Duryea said that First Line, of the three schemes that are being developed, represents the only guaranteed cost facility.

He said,"Ship owners have been telling us all along that they wanted a guaranteed fixed cost facility that did not have any mutual or accessible element to it.

"There has been a lot of activity by all three companies to get up and running. The other two require a certain minimum number of ship owners signed up. We didn't, but just issued our first guarantees on the first ships that simply qualified.'' J&H has been working on the project for some two years, promoting the insurance scheme in a broking and consulting capacity.

Mr. Duryea said he did not see the OPA '90 requirements as unfair.

"Our position has been from the beginning that nobody particularly likes the requirements of the Oil Pollution Act. We empathise with ship owners, and have all along. It is a difficult act.

"Our position hasn't been whether it is good, bad or indifferent. Our position has been that if it is going to be there and they will need a solution, we wanted to be the one to help find those solutions and it seems to be there with First line.''