Separately, Advisen reported that D&O insurance price increases for FI firms averaged 30 percent, while some insureds have seen jumps "much, much higher," according to Mr. Bradford.

Will the lower suit percentages mean that financial firms might see insurance rates change direction soon?

"It's inevitable. The D&O marketplace is really marked by different industries becoming the flavor-of-the-month for securities litigation," Mr. Bradford said. "Obviously, FIs have been pretty much hammered in the past couple of years, but the focus will move away in the not-too-distant future once the heat's off them, and I think they will certainly start to see a little flexibility on the part of underwriters as far as stabilizing, and even bringing down the premiums."

Mr. Bradford also confirmed that some insurers are jumping into the FI market to take advantage of current rate levels. "Because rates are so high, they're much more attractive insureds at this time, but I don't see a lot of rate competition going on to get that business at this point," he said.

Chris DiLullo, a senior vice president in Lockton's Washington, D.C. office, confirmed that hikes for some FI buyers were as high as 50-to-100 percent last year.

"They're not at that magnitude right now," he added. "I think for the most part, those classes have gone through the renewal process already, and the adjustments have been made. There are exceptions to this, but I think the general sentiment is maintaining where they are now, as opposed to whacking them with another 100 percent this year."

Still, there are some FI classes that continue to present placement challenges for brokers, according to Mr. DiLullo, identifying private equity firms, real estate investment trusts and banks as examples.

"The phenomenon of the pay-to-play scandal that's going on with the New York attorney general has really been a fairly wide-reaching concern that has impacted lots of PE firms," he said, referring to a probe by New York Attorney General Andrew Cuomo (and more recently the U.S. Securities and Exchange Commission) into fees paid to politically connected middlemen–known as placement agents–by PEs and other investment firms that sought business from the state pension fund.

"As a result, some of the leading PE [insurers] are looking for additional rates because they're now experiencing some losses through their general partnership liability book," Mr. DiLullo said.

PE firms also are feeling the impact of bankruptcies because of their investments in portfolio companies, he said.

Referring to REITs (real estate investment trusts that invest in and manage properties as their primary business), Mr. DiLullo said placement challenges arise from the fact that they're leveraged, debt-sensitive organizations. "You can have a good result with a REIT, but REITS with significant amounts of debt maturities in the next one-, two- or three years are going to be looked at a little bit more critically," he added.

As for traditional depository institutions in the banking sector, he said underwriters are concerned about the implications of regulatory actions–particularly the Federal Deposit Insurance Corp. "There are a record number of bank takeovers by the FDIC, so underwriters that have written those classes of business for years are selectively looking to get off of risks," he reported.

HOT TOPIC: PE INDEMNIFICATION

Turning to an emerging risk management issue for PEs and venture capital firms, Mr. DiLullo said "there's a big conversation going right now around indemnification," explaining that these firms are trying to better manage the order of indemnification obligations to officers when there are losses at portfolio companies in which they invest.

PE and venture capital firms have their people on the boards of their portfolio companies, he continued. "Those individuals can, and usually are indemnified by the portfolio company, but they also receive indemnification at the general partnership or the fund level," he explained.

"So if a claim occurs, and there's no clarity and specificity about the order of the indemnification–the sequencing of who is indemnifying first and who is indemnifying second–there can and have been some unintended consequences," he said.

In particular, this has led to situations where the general partnership indemnified, and then fully expected the portfolio company would indemnify, "and either they didn't or they couldn't," he added.

Some courts have decided that absent some clarity on the order of priority, "a portfolio company would not necessarily legally have to indemnify," he noted.

There's no standard way to "memorialize where indemnification is going to come from and in what order," Mr. DiLullo confirmed. "I think generally people expect the portfolio company to indemnify, and to the extent they can't because of financial reasons, then it would go up to the general partnership level."

Directors and officers insurance policies reimburse insured companies for fulfilling their indemnification obligations through coverage part B, also known as Side B. Mr. DiLullo noted, however, that "in the catastrophic situation, where the portfolio company may be insolvent and the need for indemnification fairly significant, the general partnership would not only be on the hook for the Side-B deductible, but their limits might not be sufficient."

"So it has the ability [potential] to cause the GP a financial outlay that they didn't expect," he said.

Mr. DiLullo said he has not seen the lack of clarity over indemnification fuel any coverage disputes between a carrier for the general partnership and a carrier for a portfolio company.

"The indemnification issue is emerging. It's early days still, but it's something people are looking into," he said.