concluded discussions with the US Coast Guard to underwrite a new CoFR programme.

The reinsurer already backs a CoFR (Certificate of Financial Responsibility) scheme, First Line, providing oil pollution financial guaranties required for ships trading in US waters.

Stockton Re director and vice president Mr. Richard Black said that further discussions with ship owners were being conducted before a formal application to the Coast Guard was made.

The new scheme, Second Line, would concentrate on a market comprising more than half of the vessels requiring CoFRs, that are not now covered by financial guaranties from First Line or Bermuda competitor, Shoreline.

Lloyd's List has reported that Second Line could cut the cost of obtaining CoFRs for tankers owned by the oil majors and the largest shipping groups.

A few dozen financial guarantors are in place for such ships, but Second Line proposes a second line of security by underwriting their operations.

The newspaper stated that the significance of the Second Line scheme is that many of the special purpose companies that are providing the financial guaranties are coming up for their first annual audit and solvency test.

They say there are fears that some could find it hard to maintain Coast Guard authorisation.

It is estimated that some 47 percent of tankers requiring the Coast Guard certificates have obtained the required financial guarantees through their own resources.