Bank Insurance – Civil Money Penalties Insurance

I have talked about the directors’ and officers’ insurance issue of civil money penalties coverage several times over the past two years.

My position: the FDIC and other bank regulators don’t want you to have insurance against the fines and penalties they assess. Their regulations say you should not have fines and penalties insurance – also called civil money penalties insurance. I recommend against the coverage. I don’t want to see you getting a fine for having insurance against fines and penalties on your D&O insurance.

Today’s edition of the Banc Investment Daily newsletter includes commentary by Steve Brown. He ends with, “This new focus in reviewing bank insurance, though, has brought to the forefront a rule that may have been overlooked before. Bankers should know this and check with their insurance carrier as well as the policies directly to be sure they don’t carry prohibited Civil Money Penalty Endorsements.”

Right on, Steve.

Yep. Make sure you don’t have civil money penalties on your bank’s directors’ and officers’ insurance coverage. If you have it, remove it.

If you are not sure if you have it, send me your D&O insurance policy. I’ll review and let you know – no fee.

UPDATE: Go Here To See My Video On Civil Money Penalties / CMP Issues for Banks.