Early signs of trouble at American International Group–which drove the holding company to near bankruptcy this month–were behind the design of at least one type of D&O coverage response, long before A.M. Best dropped ratings of AIG's property-casualty subsidiaries to “A” from “A-plus.”
Peter Taffae, managing director of Los Angeles-based wholesaler, Executive Perils, crafted a contingency plan that he refers to as a “supercontinuity option” 90 days ago. Initially the plan was put in place for Southwest Airlines, and then for four other buyers of directors and officers liability insurance in a three-month timeframe, he said.
Southwest signed on to the contingency plan in advance of July renewal of its D&O program, on which AIG was the primary carrier, confirmed Christopher Thorn, the airline's risk manager.
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