York bank as the last step in its bid to provide oil pollution cover for ships entering US waters under new Coast Guard-sponsored rules.

The company on Friday and Monday acquired applications for the cover from shipowners representing 12 million tons of shipping, taking a leading role in the race to provide coverage for ships that will require it in seven weeks time.

The money obtained from the bonds, to be sold to institutional investors, is to be used for standing funds for claim contingencies.

Shoreline has revised its type of cover, and will now provide excess cover, instead of its original plan to be a primary insurer.

Shoreline lawyer, Mr. Hugh Bryant said, "In the original concept, we thought that it was unavoidable that there would be double insurance, that Shoreline would be covering ground to $300 million and the existing P&I (Protection and Indemnity) cover, covers ground to $500 million.

"We figured there was no way out, because the P&I clubs wouldn't agree to co-operate or talk about realigning the two things together.'' But as Shoreline wrestled with the problem, Mr. Bryant's wife, a lawyer and director of Shoreline Management, suggested that Shoreline could provide coverage as a top layer of excess cover.

"I got home two weeks ago Friday and said that we really must solve this double insurance problem. Shipowners are obviously going to waste money if they buy cover for the same ground twice. It was also antagonising the P&I clubs who didn't think they would be able to recommend Shoreline to their members.

"My wife said that if the P&I clubs are absolutely committed to remaining primary insurers of pollution, why not put Shoreline on top of the P&I clubs as excess insurers, and still retain the ability to give the COFR guarantee.

"And that's all we've done. The P&I Clubs are happy, because there is no competition at the primary layer, and it means that Shoreline's cover comes in above their $500 million, adding to the aggregate coverage available to shipowners instead of duplicating it.'' The $300 million cover comes above any other available insurances, even if there is a market top-up of $200 million that pushes the existing cover from $500 million to $700 million.

These developments come as a group of US congressman have asked President Bill Clinton to delay the implementation of the Final Rule requiring a certain class of tankers entering US waters to have the COFRs by December 28.

In a letter signed a week ago by Rep. W.J. (Billy) Tauzin, chairman of the sub-committee on Coast Guard navigation, and five other related Congressmen, the plea went out: "We encourage you to delay implementation of this Final Rule until; there are insurance options available, which are both affordable and reliable for US and foreign vessel owners to obtain Certificates of Financial Responsibility from the Coast Guard.

"The consequences to our economy and to the citizens of our country of forcing a premature deadline are simply too great to risk.'' The dramatic letter warned the premature implementation could cause "a serious disruption of our nation's imported oil supply'' because of the required charter arrangements for oil tankers from the Persian Gulf.

Shoreline to float bond From Page 13 The group expressed concern about new rules requiring cargo owners to obtain surety bonds or otherwise enable a tanker owner to obtain a COFR on a voyage-by-voyage basis.

They also complained that some responsible vessel owners, who may be unable to obtain COFRs may have to go out of business.

They continue: "This would concentrate control of oil transportation resources, and have an anti-competitive impact in the world oil market.'' Just yesterday, Lloyd's List devoted a significant amount of space to the COFR issue, even publishing a strongly worded editorial, in an attempt to put the matter in its clearest context.

"Regrettably (in the eyes of some observers),'' the British publication said, "the US can lay hold of sufficient oil company owned and chartered tonnage with COFRs to avoid its imports drying up as the deadline (December 28) approaches. But there will almost certainly be a knock-on effect upon rates, and the emergence of the `two tier' market of tonnage `fitted out for the US' with its precious document (with owners with their hearts in their mouths).

"The requirements for COFRs, on the face of it, would not be totally unreasonable, if the levels of compensation which will be demanded for a US accident were not so ridiculous. It is not unreasonable to demand third party insurance for approaching shipping. But the value must reflect the risk.'' The editorial argues that all the ships will not have the COFRs in time to meet the deadline.

"Once again,'' the shipping and business paper said, "politics and practicalities have gone down different channels on their way to port.''