Bank Underwriters Underwrite for COVID-19

I’m in the final stages of a renewal of a $1b bank in the Northeast.  The current limit on lender liability and bankers professional liability is low, I think.  I asked the agent to get the underwriter to quote higher limits.  Travelers quoted the new limit but requested a COVID-19 supplemental application before they would make the increase.

Questions include:

1. Describe your response plan for working with borrowers and customers impacted by COVID-19.

2. Describe your response plan for maintaining business continuity including employee and branch availability while COVID-19 persists?

3. Provide an estimate of requests for credit as a result of COVID-19, including:

Expected amount of emergency credit (in the form of new loans)

Expected amount of credit line drawdowns

Amount of loan modifications and forbearance expected, that are eligible under section 4013 of the CARES Act (Temporary Relief from Troubled Debt Restructurings, section 4013)

Describe any other fee, foreclosure or forbearance programs in place or planned, including the total amount of credit exposure expected with such programs.

4. Provide your total credit exposure (including outstanding and committed) for the following industry sectors:

Oil & gas / energy

Transportation

Retail Trade (including property)

Hospitality (including property)

Recreation (including property)

5. Are there any other industry sectors are you monitoring for adverse impacts due to COVID-19? If so, provide a list of such sectors and the total credit exposure.

6. Describe how you are managing capital at this time – for example have you suspended capital distributions (dividends, share buybacks)? Do you anticipate taking any actions that would change your capital position during the next 12 months?

7. Describe any stress testing results that would be informative in the current risk environment, including key assumptions used in stress testing process (macroeconomic variables, etc.).

I think this gives some insight into what insurers (or at least one insurer) are thinking about relative to liability claims for the Pandemic.