Seventeen billion — that's “billion” with a “B” — is a number that's difficult to truly comprehend.
In 2014, that's the amount Bank of America agreed to pay in response to a government investigation into the design of the bank's mortgage-backed securities and its purchases of Merrill Lynch & Co. and Countrywide Financial Corp., making it the largest civil settlement in U.S. history. (The second-largest settlement last year was Citigroup's $7 billion deal that also centered on mortgage-backed securities.)
How much insurance played a part in those settlements is unknown. The exact details of directors and officers (D&O) liability insurance claims are seldom made public. What is known is that the severity of claims has been increasing, with apparently no end in sight. “The statistics are alarming,” says Phil Norton, Ph.D., managing director in Arthur J. Gallagher's management liability practice.
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