He added, "Most people, I think, believe that that sets the standard that you should be following."

The controls he referred to were those required under the Sarbanes-Oxley Bill, the Public Company Accounting and Investor Protection Act of 2002.

"I think what Sarbanes-Oxley is doing for non-public companies is it's setting the bar," said Mr. Michels. "Clearly the public and Congress have spoken on public companies; the SEC can control those.''

Mr. Michels also warned the chief executive officers, financial officers and board members who attended the seminar that the trial bar is looking for opportunities to sue.

"Civil litigants basically consider this time period a feeding frenzy," he said. "They see an opportunity. They see corporations and their top managers exposed for any kind of wrongdoing, any kind of second-guessing of business decisions, and to the extent they can glom onto that, they are all over it."

William Cotter, chief underwriting officer of AIG's National Union Fire Insurance, told the meeting the increase in lawsuits, bankruptcies and restatements of earnings that have taken place recently have dramatically impacted the availability and affordability of Directors and Officers, or D&O insurance.

"It's very difficult for us to differentiate in today's marketplace," Mr. Cotter said. "We need to focus, as an industry, upon just the simple premise of insurance, and that's pooling our premiums to make sure you've got enough there to pay for the losses.

"We're nowhere near close enough to getting to that point. And that's why, as an industry, we need to see average rate increases increase by more than 200 percent across the board."

Mr. Cotter said this year has seen increases of 50-to-200 percent for public companies' D&O policies. But he said policies have been underpriced for several years, and the few remaining companies in the D&O business need sharp increases to even begin to reach a break-even point.

Two staff members for the Downers Grove, Ill.-based Alliance, Lenore Marema, vice president of legal and regulatory affairs, and James Olsen, director of financial regulation, said insurance company executives and board members have a tremendous responsibility to educate not only themselves, but also their employees, about corporate governance.

"New standards and expectations are being developed," Ms. Marema said. "Executives and board members can't bury their heads in the sand and plead ignorance when there's wrongdoing anywhere in their organization. That's why we are encouraging our members to examine their practices to ensure corporate governance is practiced as if every employee's job depends on it, because, in reality, it does."

Mr. Olsen said, "Auditing and financial regulation used to put people to sleep. Now, it's keeping a lot of CEOs, CFOs and board members awake at night. The only cure for this ailment is to study the new law and diligently pursue all avenues to ensure full compliance."

The Alliance represents 340 property-casualty insurance companies.