Royal issued its determination cancel Maryland's policy on Oct. 25, 2001, noting the "possibility of a substantial reduction in the capacity, terms and conditions of our reinsurance." Documents made available to MIA include a Sept. 25, 2001 internal e-mail from Royal account executive Naznin Hossain, detailing the decision. "Given the current events that are happening and the fact that many insurance companies and reinsurance companies have blown out their treaties, there is no way that Royal will be able to commit to holding the line on this account's 2/1/02 renewal," Hossain writes. "There are too many unknowns in the marketplace and in the world."

Royal has been an authorized insurer in Maryland since 1972, and has provided a Blanket Excess Property and Casualty policy on the state since 1990. Buildings covered under the policy are valued at $14.9 billion, according to the property values report submitted to SunAlliance in June 2001. Among the structures in that group are the Baltimore-Washington International Airport, valued at $1.3 billion, and the stadiums at Camden Yards.

In the 75-page MIA ruling, insurance commissioner Stephen B. Larsen surmises that Royal failed to supply appropriate notice and reasons for its refusal to renew the policy, thereby violating three sections of the state Insurance Article. Larsen's ruling concludes with an order for Royal to provide evidence of Maryland's coverage to the Division of Insurance of the State Treasurer. "Failure to issue such evidence of insurance coverage and premium invoice by Sept. 3, 2002," Larsen writes, "shall result in an additional administrative penalty of $5,000 per day until such evidence of insurance coverage and premium invoice is tendered to the State Treasurer." MIA is also fining Royal $125,000. Royal spokesperson Kedar Bryan was unavailable for comment at press time, as was state director of insurance Thomas C. Kelley. Karen Barrow of MIA's office of communications tells GlobeSt.com that the agency is "not making any further comment on that decision at this time."