Check-Kiting Scheme Costs Millions

Frankly, I thought check kiting was a thing of the past with current technology and holds put on funds. I guess not... TOPEKA, KAN. - The owners of the Plainville Livestock Commission in Rooks County are charged with carrying out a check-kiting scheme that cost banks millions of dollars, U.S. Attorney Stephen McAllister said ...   (Full Article) … [Read more...]

Fraud-Bond – Money In Transit Coverage

Your bank’s fraud-bond includes protection for transportation of cash when the cash is in the possession of an armored car company or an employee.  You are not covered for contracted messengers, taxis or other delivery services when cash is lost, stolen or misplaced. Of course, your messenger service may offer coverage or agree to protect you. … [Read more...]

Employee Dishonesty/Fidelity Insurance – The Fraud Bond

The employee dishonesty section of the financial institution fraud-bond is often called “Coverage A,” as it was designated as such in the original “Form 24” bond used in the early part of the 1900s. Coverage is provided for dishonest or fraudulent acts committed by employees acting alone or in collusion with others—such as embezzlement. The … [Read more...]

Bank Breach – Debit Card – Update

In August I put out a post on my take of the VA bank $2.4m debit-card/hack event.  (See that post here.) Over the past three months, I have more information and have changed my thinking slightly. First, I have no more info on the actual event or the claim with ABA/Everest. As I said before, the bank is not a client and ABAIS is obviously not … [Read more...]

How Much Insurance Should Your Bank Buy

The eleventh edition of my recommended minimum limits of insurance for banks is available now for download. Several changes in approach this time. New limits for bankers to consider as well as a different approach to publicly traded banks. Go to www.HowMuchBankInsurance.com for your copy. Directors and Officers Insurance Lender Liability … [Read more...]

Debit Card / ATM Cashout Losses and Attacks

Here are some new questions being asked by insurance company underwriters when I ask for higher debit card limits.  Not bad questions for every bank to ask themselves. These questions are mainly driven by recent FBI guidance regarding ATM Cashout schemes. For more info about ATM Cashouts: … [Read more...]

Bond – Funds Transfer Coverage

What procedures are required by your financial institution bond for fund transfer callbacks? Some policies require you to perform a callback. Some require that you make an audio recording of the callback. Failure to meet the required standards could result in a claim being turned down. … [Read more...]

Client Question – The People You Hire…

From a Client: One question: When hiring applicants – what is the insurance view on hiring individuals that have had some credit issues in the past, i.e. delinquency, foreclosure, and charge-offs, if they are in a non-cash handling position?   My Reply: If your regulators are OK with them the insurers are OK. The only issue … [Read more...]

Fracas Over Insurance on $2.4m Bank Breach – My Take

In the last several weeks I heard from many of you about a Virginia bank breach and the response from their insurer, ABA/Everest. The concerns are real. Let's see if we can add some light to the heat. Here is the original post. I have done some research. I have looked at policy forms by ABA/Everest and other insurers. I have talked with a few … [Read more...]

Fraud-Bond: Fraudulent Loan Collateral

There is no coverage in a financial institution fraud-bond for a fraud loss where the fraud is in the determination of the value of the collateral. You take a loan secured by inventory, and it turns out there is no inventory. No coverage. Example: ABC Bank and Trust loans money to an electrical parts supplier. They take inventory in a warehouse as … [Read more...]