limits and expanded terms of coverage for policies that the company underwrites.

Sovereign, which is in the third year of operation, stated that the per-project capacity limit will rise to $125 million from $100 million within existing country limits.

The maximum term of coverage will rise to 15 from 10 years.

"These increases come in response to the rapidly growing demand for Sovereign's political risk insurance products from banks, multinational corporations, national export credit agencies and international infrastructure sponsors,'' the company stated in a press release.

Sovereign was formed in April 1997 as a joint venture of Bermuda-based ACE Ltd. and XL Capital Ltd. to underwrite political risks.