A nationwide law firm is at work creating a coalition of insurer representatives to oppose a new rule by New York making it mandatory for directors and officers liability insurers to manage any legal defense that policyholders may require.
The insurance department's October Office of General Counsel Opinion is contrary to legal precedent, and comes after a number of years in which the agency has permitted policyholders to pick their own lawyers–which are paid for by the insurer under public company D&O policies, according to Carrie E. Cope, an attorney with Tressler Soderstromp, Maloney & Priess in Chicago.
She issued an e-mail bulletin outlining her objections, which she labeled "a call to arms," that warned if the opinion is not modified, it "may well have a chilling effect upon the D&O industry in New York."
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