BestWeek Reaffirms that Subprime Mess Will Affect D&O Market
As concern over losses in the U.S. subprimarket move from the boardroom to the courtroom, insurers who underwrite the liability of major financial institutions are preparing for a new rash of claims, according to an exclusive story in BestWeek U.S./Canada. This underscores what Marsh had said in a press release on August 20th, which we reported in the Programbusiness Daily Newflash on August 21.
According to BestWeek, at least 10 securities class actions have been filed thus far, and that number is likely to grow, according to Jill Sulkes, a managing director in Marsh Inc.'s Financial Institutions Practice.
In addition to suits targeting the growing number of mortgage originators that recently have filed for bankruptcy, she expects subprime-related claims for directors and officers liability could be made by banks, including investment banks, hedge funds, and real estate investment trusts.
R. Mark Keenan, chairman of the Financial Institutions Group with New York-based policyholder firm Anderson Kill & Olick P.C, expects "a smorgasbord (of claims) that really is only limited to the inventiveness of plaintiffs' counsel."
"Where I see the majority of the claims are investor claims on misrepresentations on your financial statements, or material admissions on failing to get an investor out. That could go into pensions or fiduciary liability," Keenan said.
Source: Source: BestWire Services | Published on August 27, 2007
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