claims-paying ability ratings to Bermuda-based captive, Kot Insurance Co.

Ltd., the captive insurer of Mexican oil company, Petroleos Mexicanos (Pemex).

S&P said this week the company's outlook is stable.

The rating is based on a guarantee from parent company, Pemex (double-'B' foreign currency issuer credit rating), which is a decentralised public entity of the federal Government of the United Mexican States.

Almost all of the insurance protection for Pemex is placed directly through Kot. The captive assumes no third party risks, with Kot limiting its business to risks of Pemex.

Premium volume is primarily determined by the level of exposure Kot retains on coverage provided to Pemex.

Since Kot's first year of business in 1993, it has written onshore property such as refineries, offshore property like platforms, third party liability, hull and cargo.

Kot's reinsurance programme is divided into two principle areas. They involve Kot's retention, which has been established in accordance with Pemex's statistical loss experience, and, the excess of loss transferred to commercial reinsurance markets.

As an additional protection for Kot's retention, there is a stop loss programme. S&P said that the company's reinsurers are generally of good quality.

The ratings agency said, "Kot's capitalisation of $30 million for the year ending 1996 exceeded Bermuda's minimum solvency margin requirement, but declined substantially from $42 million in the prior year, with poor underwriting results.

"However, higher earned premiums through April 1997 have contributed to restoring capitalisation to $49 million.

"Kot's assets and reserves are managed conservatively through Pemex's investment committee. The portfolio's investments are in keeping with the short-tail property risks of this business.'' FRONT LINE TO PURSUE ICB SHI BUC Frontline to pursue ICB Shipping group Frontline, which is Bermuda registered, on Tuesday pledged to continue its takeover bid of Swedish rival ICB Shipping AB, saying it was now the largest ICB shareholder.

It said it had acquired ten percent of the share capital and 8.2 percent of the votes in ICB, which on Monday rejected its takeover proposal. "Frontline regards its investment in ICB as a long term investment and will through its share holdings actively pursue a merger between the two companies,'' Frontline said in a statement.

The merger of Oslo-listed Frontline, headed by Norwegian shipowner John Fredriksen, and ICB would create one of the world's largest listed tanker operators with 44 ships in its fleet totalling 8.44 million dwt.

Frontline launched a hostile cash and paper bid for ICB on Monday which valued the firm at around 3.12 billion Swedish crowns ($395.2 million).

It offered shareholders three Frontline shares for every one ICB share or 115 Swedish crowns a share up to a maximum of 25 percent of ICB's share capital.

But ICB's board, headed by chairman Clarence Dybeck, rejected the move, saying the offer was too low.

Earlier this year, ICB, rejected an informal merger approach from Frontline.

Frontline, which already claims support of over 35 percent of ICB's shareholders. said it considered its bid of 115 crowns a share was generous.

CRACKDOWN ON TAX CHEATS TAX Crackdown on tax cheats The British government is beginning a crackdown on UK citizens who may be trying to avoid taxes in offshore havens according to a report in Caribbean Week.

The West Indian newspaper quoted Treasury Department officials as stating that a "sweeping review'' of global British taxation policy was underway to try and nab any British expatriate citizens who were attempting to avoid taxes.

The newspaper also stated the review might lead to a decision to end or alter "significantly'' the tax free status of citizens working in dependent territories.

However, according to the Ernst & Young office in London, the first Labour Party budget did not mention any such review of the current policy towards a more US style of taxing citizens no matter where they lived. The Labour Party had stated it would consider altering the policy during the run-up to the election this year.

No mention of implementing such a policy has been mentioned since Labour won the election, an Ernst & Young spokesperson said.