Markel International has given notice to cancel marine, energy and property contracts following the loss of its reinsurance contract.

The move will affect hull, energy, liability, cargo, specie, property and excess of loss reinsurance policies covering periods from January 1, 2002. The policies have a cancellation clause.

In a letter to brokers, active underwriter for syndicate 1009 Paul Jenks said: "Please find enclosed notice of cancellation on the marine, energy and property book of syndicate 1009, as discussed between Jeremy Cooke, president of Markel International, and yourself.

"You will note that notice is given in accordance with the provisions of the individual policies."

The letter enclosed a schedule of risks that expire after December 31, which were placed through intermediaries. Policies placed under line slips will also be cancelled.

It added: "This notice is provided with effect from September 28, 2001, and coverage will expire at the end of the shortest period as may be specified within the policy conditions.

"In the absence of general cancellation provisions, we tender notice

of cancellation, where applicable, resulting from a fundamental change in, and/or loss of the reinsurance arrangements for syndicate 1009."

Cooke said: "Syndicate 1009 is the only syndicate at Markel sending out notices. We are sending them out where we have the contractual legal right to do so in accordance with policy terms. We have a reinsurance programme that will not be in effect from January 1 and will need to see what is available in the meantime."

Cooke said he did not know how many policies would be affected, but added each would be dealt with on its own merits.

"We are trying to work with the brokers on this," he said. "The steps we have taken constitute a sound commercial response to the exceptional circumstances of the past three weeks. Once the re-organisation of our insurance programme is complete, our marine underwriting operations will continue with our full support.

"Markel has submitted a business plan in the past few days to Lloyd's confirming its intentions to write its existing lines of business under its new composite Syndicate 3000 for the year 2002."

One senior director of an eminent Lloyd's broking house who received the letter said: "I am appalled and astonished that any syndicate would take such action without taking more considerate consultation with all interested."