Lexicon-laden insurance professionals rejoice: Insurance broker Willis North America has updated its comprehensive dictionary of terms related to D&O Liability.
The free, downloadable glossary now defines more than 100 D&O-specific terms and the context in which they are used, as well as details that will be useful to risk professionals prior to attending meetings, making presentations or undertaking key policy decisions.
The updates were a response to recent changes in the D&O insurance-litigation environment and developments in coverage for executives and their firms, says Willis. For example, taken into account are modifications to the sections of the SEC's 1934 Securities Exchange Act that address trading, registration requirements, and regulation of brokers and dealers making public offerings.
“In discussions regarding D&O insurance, we invariably mingle the language of law, finance and insurance, all otherwise separate and distinct disciplines with their own unique concepts and terms of usage,” Ann Longmore, executive vice president of Willis North America's Financial & Executive Risks Division, says in a statement. “This makes every conversation potentially full of pitfalls for unwary individuals knowledgeable in their own areas of expertise but not so much when addressing insurance matters.”
Among the terms are “bump-up” claims, or claims made by shareholders of a company about to be acquired, alleging that it has been undervalued and seeking to have the purchase price raised; “clawback,” which refers to money or benefits that were distributed and then taken back by a company under circumstances defined by the Sarbanes-Oxley and Dodd-Frank Acts; and the “double-derivative claim,” a lawsuit brought by a shareholder of a parent corporation on behalf of a wholly owned subsidiary for alleged wrongs to a subsidiary. These rare suits generally occur when shareholders have lost the standing to maintain a standard derivative action due to the acquisition of the corporation in a stock-for-stock merger; the shareholder, in his new capacity as a shareholder of the acquirer, then reasserts the claim double derivatively.
“Our goal was not just to describe what something plainly is, such as 'application,'” Longmore added, “but also to provide context as to why the term may be relevant.”
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