extendible commercial notes by Bermuda-based Oil Insurance Ltd. as `A-1'.

And the rating agency has affirmed its `single-A-plus' counterparty credit and financial strength ratings on the company. Oil Insurance Ltd. also scored well in the senior debt stakes, earning another `single-A-plus' rating.

S&P granted it an `A-1' commercial paper rating and judged the company's outlook as "stable''. "These affirmations consider Oil's strong operating results and growth in capital, offset by volatile operating results and active capital management in the form of dividends,'' the rating agency wrapped up.

"S&P expects Oil Insurance Ltd. to continue to generate very strong returns on revenue. Even in the wake of high catastrophe activity, OIL's unique retrospective rating will recapture incurred losses in the medium term.

"S&P expects capital adequacy to remain at or above the rating level. In the even of low catastrophe activity and high investment earnings, management will continue to return excess capital to shareholders.'' The $100 million unsecured commercial notes are similar to commercial paper notes except that the initial maturity date can be extended for an extra 390 days from its initial date of issue.

S&P said this feature allowed rollover of the notes at the company's discretion and, in effect, combined the liquidity of commercial paper with the back-up of support lines.

Oil investment subsidiaries, Oil Investment Corp Ltd. and Oil Investment (Barbados) Ltd., will guarantee the privately placed notes.