State's Insurer Forced to Reinstate $500M Policy

BALTIMORE, MD-The Maryland Insurance Administration has issued a ruling calling on London-based Royal & SunAlliance Insurance Group to reinstate the State of Maryland’s $500-million insurance policy, which it decided not to renew through its domestic subsidiary Royal & SunAlliance USA Inc. last fall. Royal’s decision technically leaves a bevy of high-profile properties without coverage as of the policy’s expiration last February. However, given the state’s challenging of the decision, those properties have remained covered under the previous policy.

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.”