Circular No. 2/98 - OPA '90 - Certificates of Financial Responsibility



JANUARY 27, 1998




Dear Member:


International Sureties Limited (ISL)

You may be interested to know that another COFR facility has recently become available. It is intended to assist, in the first instance, dry cargo operators only.

International Sureties Limited (ISL), a U.S. registered bonding agent, has launched a new scheme supported by a number of bonding companies here in the United States. The facility, which has recently been approved by the United States Coast Guard, offers a bond as evidence of financial responsibility under OPA 1990 for up to U.S. $70 million at a cost of US $1,000 per annum. This cost applies irrespective of a vessel's tonnage, but is subject to a maximum US $70 million COFR cover as mentioned above. It is also understood that ISL are able to offer the facility in a limited way to small tankers, defined as those which are of a tonnage which require a COFR of not more than US $21 million in value - equivalent to a maximum ship size of about 14,000 gross tons.

The following documentary requirements apply to the obtaining of a COFR under the new scheme:

. the completion of a Surety Bond Guarantee Form (D.O.T. U.S. Coast Guard CG-5586-2) together with a schedule of vessels to be covered;

. the completion of a letter of indemnity in favor of the bonding companies;

. the provision of a check payable to International Sureties Ltd. for the bond premium of US $1,000 per vessel as mentioned above as well as a check payable to the U.S. Coast Guard for the COFR fee (US $80 per vessel) together with a completed CG-5585 form on behalf of the operator.

It should be noted that the letter of indemnity required is in broad terms which, in common with those required under other COFR schemes, may entail liabilities not covered under a Club entry. Nevertheless, Members who subscribe to the new facility - and as again is the case in regard to other COFR schemes - will not thereby prejudice their existing Club cover for U.S. oil pollution liabilities.

Members who wish to take advantage of the new scheme can obtain further details, and all relevant documentation, by contacting ISL as follows:

International Sureties Limited
210 Baronne Street,Suite 1700
New Orleans, Louisiana 70112
Tel.: (+1) 504.581.6404 
The documentation required of the Club in relation to this new facility comprises two letters in the same format as those used to subscribe to other COFR facilities. The Club will be able to issue these documents on request as required.

ARVAK Limited

Details of this COFR scheme were originally supplied to Members in Circular 11/96 of December 31, 1996.

It is now understood that ARVAK's Board of Directors have recently appointed Shoreline Mutual Management (Bermuda) Limited to manage their scheme. This company currently manages Shoreline Mutual (Bermuda) Limited, a COFR facility which has been operating for several years.

It is further understood that ARVAK and Shoreline Mutual will continue to operate as separate and independent facilities notwithstanding a common management. Both are established in Bermuda and have the following contact details:

Shoreline Mutual 
Tel.: (+1) 441.296.2324
Fax: (+1) 441.296.2327

Tel.: (+1) 441.295.2220 
Fax: (+1) 441.295.4805

If any Member has any questions in regard to the foregoing, the Managers will of course be pleased to respond.

Yours faithfully,

Joseph E.M. Hughes
Chairman & CEO 
Shipowners Claims Bureau, Inc. 

Back to Index of Circulars