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Sarbanes-Oxley News & Developments
D&O Insurance - The Heat Is OnThe fate of D&O insurance has become a national pastime in 2003.
> > Discussing the fate of directors and officers insurance has become a national pastime in 2003 as the inner workings of companies and institutions head towards ever increasing scrutiny.
Trevor Davies, founder and senior partner at law firm Davies Lavery said - The product has been around for some time and not everyone took it up so the scandals of recent years have not been the best advert. The premium increases have been made because of a general hardening of the market, and demand is now high simply because more cases are being brought against directors, both civil and criminal.
The root problem.
The exposures of companies listed on exchanges in the US have also been well documented, and the root cause of massive increases in premiums for D&O coverage is blamed largely on claims inflation outstripping premium income.
Lance Dalzell-Piper, D&O underwriter at Hiscox, explains - There has been a significant increase in the frequency of securities class actions brought against non US companies with US securities exposure over the past two to three years. Some high profile defendants, include Aegon, Alstom, Bayer, ICI and Ahold in 2003 and Alcatel, Allied Irish Bank, Cable and Wireless, Flag Telecom, Hugh Boss, Tyco, Vodafone and Vivendi in 2003.
Research from Pricewaterhouse Coopers shows 36% of cases in 2000 were accounting-related.
Source: Hoovers
Published:2003-10-29
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