Reflections on the 2013 PLUS D&O Symposium – Day One


    The first day of the 2013 PLUS D&O Symposium featured panel discussions on regulatory and securities litigation trends, D&O claims in the context of private companies and non-profits, coverage “wish lists,” and current issues in underwriting for financial institutions.  There was also a luncheon keynote address on the general convergence of reinsurance and specialty insurance.

    The day’s panels examined a number of claim trends in the D&O world.  Among the most significant were what some panelists identified as a newly-energized SEC, which seems to have adopted a stronger focus on penalties and sanctions, and the trend toward judicial inquiries into private settlements.  Several panelists said that some courts’ recent refusals to approve settlements that do not include admissions of fault has pushed more cases closer to trial, while others maintained that judicial inquiry into the terms of a proposed settlement could be what is needed to give better effect to the securities laws and tamp down on the multi-forum litigation (typically, Delaware, the Southern District of New York, and at least one or two other forums) that seems to be launched against a corporation for even the most seemingly innocuous proxy disclosures and proposed mergers.

    Private corporations and non-profits have presented their share of challenges this year.  Private corporations, panelists noted, tend to face emotionally-charged claims that arise out of family bankruptcies, freeze-out mergers, and theft of information from prior employment, among many others.  And while most private corporations have D&O insurance for the entity coverage, it can come as a rude shock to those corporations that defense costs deplete the indemnity limits.  For non-profits, the largest challenges that the panels identified were regulatory compliance (e.g., audits), donor claims, and discrimination claims.

    Financial institutions, too, have had a challenging year.  Significant exposures include anticipated lawsuits about the LIBOR scandal and the potential of a Eurozone collapse, to say nothing of the increasingly challenging US and European regulatory environments.

    There was broad consensus that every risk is insurable, for a price; and that that price is likely to increase in the short and medium term.  Among the policy provisions that might be bargained over are bump-up exclusions, investigations coverage (both formal and informal), subrogation and recoupment clauses, and traditional policies as opposed to ones that offer only Side A coverage.

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