Shoreline continues to help its members safely navigate US COFR requirements as well as being innovative and responsive to their needs.
It is the first COFR provider to create a fully interactive website where its customers (brokers, managers, shipowning members and P&I cubs) can conduct all aspects of arranging and verifying cover. Shoreline has also arranged a programme for its members to obtain International Carrier Bonds as required by the US Customs and Border Patrol Department.
Approximately 80% of vessels subject to OPA 90 COFR requirements obtain their guarantee through insurance. Shoreline currently provides guarantees for over 25% of all ocean-going vessels and nearly 30% for all tankers according to US Coast Guard statistics. Shoreline has entered tonnage of 115m gt with over 400 managers representing over 1,500 owners.
The make-up of the book has changed drastically with the continuing disappearance of single hulls combined with robust new building growth, So the average age of the book continues to decrease while the number of vessels continues to increase.
There has been a recent adjustment to the limits of liability under OPA 90. The Coast Guard and Maritime Transportation Act of 2006 passed by Congress and signed into law by President Bush significantly increased the limits of liability originally set by OPA In 1990.
Both laws base the liability on a specified amount per gross tonne, with different amounts for vessels that transport oil as cargo (tankers and tank barges) than for vessels that carry oil as fuel (such as cargo, fishing, and passenger vessels),
The 2006 act raised both the per-tonne amount and the required minimum amounts, differentiating between vessels with a double hull and vessels with a single hull which OPA never contemplated.
Originally, in OPA 90, liability limits for tank vessels were only segregated by vessel size. Tank vessels less than or equal to 3,000 tonnes had a liability limit of $1,200 per tonne with a minimum liability of $2m, while tank vessels over 3,000 tonnes also had a liability limit of $1,200 per tonne but had a minimum liability of $1Om.
Under the new legislation, single-hull tank vessels less than or equal to 3,000 tonnes have a liability limit of $3,000 per tonne with a minimum liability of $6m while single-hull tank vessels over 3,000 tonnes also have a liability limit of S3,000 per tonne but with a minimum liability of $22m.
Double-hulled tank vessels' new limit of liability is $1,900 per tonne, with a $4m minimum for vessels less than or equal to 3,000 tonnes and a $16m minimum liability limit for tank vessels over 3,000 tonnes.
The limH of liability for non-tank vessels increased from $600 per tonne to $950 per tonne with the minimum liability increasing from $500,000 to $800,000.
These new liability limtts currently only impact vessel responsible parties (owners and operators). The USCG is in the process of promulgating new regulations to amend COFR requirements which will place these new limits on COFR guarantors such as Shoreline.
Shoreline is in constant communication with the USCG to track these new regulations and has had preliminary discussions with its reinsurers with a view to controlling costs on behalf of its members.
White COFRs and the liability provisions of OPA are shown to be the single most effective tool in decreasing the amount of oil spilt by ships In US waters, it is probable that the liability limits will be adjusted more frequently going forward to reflect the ever increasing costs of clean up.
As a result of changes made to Bermuda company law by the Companies Amendment Act of 2006, the opportunity was taken to amend the rules of Shoreline. These changes were unanimously approved at the company's annual meeting in Copenhagen earlier this month. The revisions will make the rules more consistent with the company's current business model.
Thnee new directors joined board at the annual meeting - Carolyn Webster of Disney Cruise Line, Tapas Icot of Great Eastern Shipping and Josef Schoning of Intersee Schiffahrts GmbH. The new directors will serve for a four-year term and they replace Eukor Car Carriers, Carnival and Sanko.
This year has seen celebration of Arvak's 10th anniversary under Shoneline's management. This involved a reception and dinner in Copenhagen hosted by Douglas Jacobsohn of Skuld and attended by Danish members of Arvak.
The Arvak board comprises Interpid Shipping, Interlake Shipping, the Clipper Group and Chianti Asset Management.
Marilyn Feldman Is president of Shoreline Mutual Management and Jeff Fredel is US consultant, previously with the USCG.