1. B A NK INS URA NCE UPDATE
FDIC Confirms that Fully
Understanding the Limitations
of D&O Coverage Is Critical
On October 10, 2013, the FDIC issued an Advisory Statement (FIL-47-2013)
regarding Director and Officer Liability Insurance Policies, Exclusions, and
Indemnification for Civil Money Penalties.
In summary, the advisory discusses the importance of thoroughly reviewing
and understanding the risks associated with coverage exclusions contained in
D&O liability insurance policies. (The full statement can be viewed here.)
HIGHLIGHTS FROM THE STATEMENT
“In recent years, the FDIC has noted an increase in exclusionary terms or provisions contained in depository institutions’
D&O insurance policies that may adversely affect the recruitment and retention of well-qualified individuals. When such
exclusions apply, directors and officers may not have insurance coverage and may be personally liable for damages arising
out of civil suits relating to their decisions and actions.”
“D&O liability insurance is an important risk mitigation tool for financial institutions, and it is vital for directors and senior
executives to fully understand the protections and limitations provided by such policies.”
SO, WHAT IS THE BEST COURSE OF ACTION
YOU CAN TAKE TODAY?
© Copyright 2013. CBIZ, Inc. NYSE Listed: CBZ. All rights reserved.
“The FDIC urges each board member and executive officer
to fully understand the answers to the following questions
regarding D&O insurance coverage, especially when
considering renewals and amendments of existing policies:
• hat protections do I want from my institution’s
W
DO policy?
• hat exclusions exist in my institution’s DO policy?
W
• re any of the exclusions new, and if so, how do they
A
change my coverage?
• hat is my potential personal financial exposure
W
arising from each policy exclusion?”
CBIZ AIA
CBIZ AiA can help! We are offering our proprietary,
comprehensive Policy Analysis to any community bank
for FREE until January 15, 2014. Normally reserved for
clients, the Policy Analysis incorporates a review of all
language in the bank’s current policies – not just a review
of endorsements. Language embedded within a policy
can expose a bank to under-insured or uninsured risk, so
we carefully review this language with an emphasis on
inclusions, exclusions and definitions. The bank’s policy
limits will also be compared against banking industry
benchmarks.
When you partner with CBIZ AiA’s unparalleled team of
professionals, you benefit from a unique combination of
expertise – ex-bankers with nearly 70 years of banking
experience and bank insurance specialists with over
20 years of experience insuring all sizes of financial
institutions.
Confused about Civil Money
Penalties and insurance coverage?
Are they the same as a regulatory lawsuit?
We’re happy to answer any
questions you have.
Contact Kris St. Martin today to get your FREE Policy Review started. 763.549.2267 • kstmartin@cbiz.com