obligations under the US Oil Pollution Act are preventing a Bermuda-based insurer from offering cover to shipowners.

Lloyd's List has reported that Shoreline Mutual (Bermuda) Ltd. has US authorities warned of "damaging uncertainty'' to establishing new insurance vehicles because of the delay.

Mr. Hugh Bryant, a partner at Pennington's in London, could not be reached yesterday morning for comment on the situation but a spokesman said the rules have not been released.

An official rules announcement was expected before Adm. William Kline retired on May 31.

Shoreline was planning a June 1 startup date but continues to wait for the rules. It cannot accept members or set up reinsurance until the US Coast Guard rules on the guarantees they require to issue certificates of financial responsibility have been finalised.

Mr. Jeffrey Shane, Shoreline's Washington-based counsel, wrote to Frederico Pena, US Secretary of Transportation about the delay.

In that letter, Mr. Shane said the mutual remains ready to meet the final rules.

The major protection and indemnity clubs contend that risks created by the Act are uninsurable but a number of other potential solutions have emerged apart from Shoreline, Lloyd's Line added.

First Line is a proposed special purpose insurance company that would require the support of the US administration for an oil levy and initial borrowing.

Greek, Norwegian and Swedish shipowners as well as Intertanko favour a mandatory Excess Insurance Facility while a type of banking solution has emerged based on surety bonding.

Shoreline also plans to cover clean up expenses; fines and penalties under the Comprehensive Environmental Response Compensation and Liability Act of 1980; provide evidence of financial responsibility required under OPA 90 for all ships calling at US ports; and state liabilities for oil pollution.

The mutual was incorporated in Bermuda in February and said then it would provide coverage up to $300 million pending rules release.

The rules will require all ships entering US waters to have evidence of financial responsibility.

Shoreline was set up by a group of American and British investors, many with years of experience as shipowners in the insurance market and in protection and indemnity.

Shoreline director and local lawyer Mr. David Doyle, could not be reached for comment yesterday.