What You Need To Know About Your Bank’s D&O Policy

Here is the link to the video of yesterday's session. I covered the banker's D&O policy, indemnification, the bank insurance marketplace, and took a few questions. My next Webinar is on 9/21, Bank Insurance 101.  To join that session register here. … [Read more...]

Remember the Pollution Exclusion

Remember the Pollution Exclusion Over the past twenty years, the insurance industry has been hammered by the courts on pollution claims. Now, most standard insurance policies have pollution exclusions so broad that the industry calls them “absolute pollution exclusions.” Liability arising out of pollution is excluded by most general liability … [Read more...]

Supervisory Insights From FDIC for Banks

The FDIC issued a special edition of "Supervisory Insights" recently providing guidance on community banks guidance on governance. Preventing D&O claims means your board and leadership are attuned to regulation and regulator's stance on running your bank. This is required reading for anyone looking to meet their fiduciary obligations as … [Read more...]

CEOs Signing Insurance Applications

A bank client is in the final stages of changing insurance companies. The insurer wants a signed application. The CEO looks over the app. He is busy and trusts his CFO. He signs the document and moves on. Six months later a claim comes up. The insurer turns the claim down because there is a pertinent question on the application that was answered … [Read more...]

Your Bank Is Buying Another Bank…

I got a call today from the CFO of a client bank.  They are 80% of the way to buying a small bank.  Relatively speaking, the bank they are buying is very, very small. It's so small that, in all likelihood, the acquisition will have no impact on my client's fraud-bond or management liability insurance policies.  I told the CFO to give their … [Read more...]

Bank Director Gross Negligence vs Ordinary Negligence and FDIC

When a bank fails, the FDIC wants to get its money back.  There is a common pattern of the FDIC going after the directors of failed banks.  Currently the FDIC has to show "Gross Negligence" before doing this. They want to lower the bar to "Ordinary Negligence." Bank associations and bankers are mostly against this change.  The American Bankers … [Read more...]

More (Though Not New) Thoughts on Bank Civil Money Penalties Insurance

A client asked about my knowledge of the history of civil money penalties against bank board members. The question was prompted by a note I sent about AmTrust's CMP insurance policy. My Reply: CMP against banks seems to be mostly for issues of lack of flood insurance on loan collateral that is in flood areas. CMP against directors is exceedingly … [Read more...]

AmTrust Offers FDIC-Friendly Civil Money Penalties Cover For Banks

I got word yesterday that AmTrust is now offering a stand-alone Civil Money Penalty (CMP) insurance policy for banks. -Coverage is applied for by the individual director or officer. -Coverage is paid for by the director or officer. -Bank is referenced on the policy but only to define the activities covered for the individual.  The bank is … [Read more...]

End of the World Insurance

I call excess side A coverage on directors' and officers' insurance policies, "end of the world insurance." Your company's by-laws includes an indemnification agreement that says that the company will pay for any litigation against a director or an officer over their service as a Director or Officer. (Note: There are legal restrictions on what … [Read more...]

Civil Money Penalty Insurance

Since the FDIC came out with their October 2013 letter clarifying/trashing the use of insurance to protect bank directors and officers from civil money penalties there has been a great deal of heat generated by discussion.  Not much light - lots of heat. About two years ago I saw the whole thing coming and started telling my bank clients to … [Read more...]