NEW YORK—The New York State Supreme Court has awarded Travelers Cos. Inc. $262.3 million plus interest from several reinsurers in asbestos litigation stemming from policies written as long ago as 1948, but at least one of the reinsurers said it plans to appeal.

Princeton, N.J.-based Munich Re America Inc., which is slated to pay the biggest portion of the award, said it plans to appeal the Aug. 20 ruling, which is the latest development in the long-running case.

According to the ruling, USF&G Corp. wrote a number of liability insurance policies for Western Asbestos Co. between 1948 and 1960 for losses arising from hazards related to its products and business operations. St. Paul Cos. acquired USF&G in 1998, and St. Paul merged with Travelers Cos. in 2004.

In 1956, USF&G entered into one reinsurance treaty with American Re-Insurance Co., which now is Munich Re America, and another with a pool, the Excess Casualty Reinsurance Assn., which then consisted of 20 member companies. Both treaties contained a “follow the fortunes” clause, which bound the reinsurers to any claims paid by USF&G.

In 1993, Western MacArthur Co., which had purchased most of Western Asbestos' operating assets, sued USF&G and two other Western Asbestos insurers. In a 2002 settlement of the suit, USF&G agreed to pay $975 million plus interest, with $940 million to be placed into a bankruptcy trust for current and future claims.

USF&G subsequently filed litigation seeking to recover a part of its losses under reinsurance treaties issued by the defendants. In addition to American Re and the pool, the remaining constituent pool members also were named as defendants: ACE Property & Casualty Co., Century Indemnity Co., OneBeacon American Insurance Co., American International Group Inc. unit American Home Assurance Co., and American Re, which was also a pool member in addition to having the separate policy.

In a complex, 28-page ruling in United States Fidelity & Guaranty Co. et al. vs. American Re-Insurance Co. et al., New York State Supreme Court Justice Richard Lowe III rejected several arguments by the defending reinsurers and ordered American Re—now Munich Re America—to pay $202.5 million plus interest and the ECRA pool to pay $59.8 million plus interest.

A Travelers spokesman praised the ruling. “We are pleased with the New York Supreme Court's ruling that reinsurers must pay the full amount of their obligation to Travelers plus interest,” he said in a statement.

However, a Munich Re America spokeswoman said an appeal is planned. “We are currently evaluating the ruling to assess all of the issues which will form the substance of an appeal,” she said in a statement.

AIG and OneBeacon declined to comment. Spokesmen for the remaining defendants could not be reached.