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Policyholder Financial Impairments Raise Directors & Officers Coverage Questions

In the wake of the subprime mortgage crisis and the now unfolding unprecedented global credit crisis, the public has been exposed to severe weaknesses in the global financial system. With the

By Ivan J. Dolowich | Updated on November 02, 2008

In the wake of the subprime mortgage crisis and the now unfolding unprecedented global credit crisis, the public has been exposed to severe weaknesses in the global financial system. With the liquidity crisis of American International Group and high-profile bank failures, the vulnerability of seemingly unsinkable financial institutions has become all too apparent.

Repercussions of heightened regulatory scrutiny and huge market cap losses will include additional shareholder litigation, potentially implicating policies issued to directors and officers of companies directly and indirectly impacted by the crisis. We are already witnessing insolvency-related changes in control that are reminiscent of the savings-and-loan crisis of previous decades.

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