Shoreline takes pride in an unblemished record

It continues to deliver a fixed cost COFR guarantee and also continues its policy of delivering guarantees at a charge based solely on the combination of risk premium and cost of administering the programme.

In the decade since it was established Shoreline has become one of the leading providers of COFRs to the shipping industry.

Its performance prompted these words from chairman, Mark Filanowski, in the 2004 annual report: "I join the other members of the board of directors in thanking all of those who have worked so diligently to create a lasting solution to a seemingly insurmountable problem at that time, and for their continued and effective stewardship in uncharted waters.

"Time has proved the success of their efforts, which can be summarised as quality of membership and quality of service through responsible and responsive management."

However, the "steady as she goes" scenario could face a challenge, as Shoreline Mutual president Marilyn Feldman told Lloyd's List.

"OPA limits of liability have not been adjusted for inflation, which the statute allows for, or any other reason since OPA was enacted in 1990," Ms Feldman said.

"There have been at least 19 Incidents involving vessels since 1992 where the costs of the incident are known to have exceeded the limit of liability.

Also, with the decrease in the number of vessel-related spills response costs have increased. The effect of an Increase in limits would require the shipowner to obtain insurance with the new higher limits.

"Of course, this would mean that the cost to obtain these higher coverage limits would increase the shipowner's premiums. Additional reinsurance capacity would need to be found and any premium increase to the shipowner would be based on that cost of additional reinsurance capacity."

A report earlier this year by the US Coast Guard indicated that, based on past spending trends and present forecasts, the Oil Spill Liability Trust Fund was expected lo be depleted by fiscal year 2009.

"Basically the fund's expenses are outpacing its income" Ms Feldman said.

"The main sources of the fund's income - the tax on oil and transfers from other funds it has replaced - have expired.

"At present the fund's income sources include interest on fund balances, civil penalties and recovery of costs from responsible parties.

"Fund expenses include federal removal costs, natural resource damage assessments and restorations, payments of claims for uncompensated removal costs and damages, and federal administrative costs and expenses necessary to implement, administer and enforce OPA 90.

"The current balance of the fund is approximately $842m. Unless something is done to address the shortfalls federal responses will have to be terminated or funded from other sources.

"Persons incurring removal costs or damages as a result of a spill may not be compensated, states and local governments may be deprived of important compensation for their oil spill response efforts and federal government operations will have to be funded from other sources.

However, recent legislation has been proposed in the US Senate which would reinstate the 5c-a-barrel oil tax and increase and sustain the Oil Spill Liability Trust Fund at $3bn."