Market Movement
Corporate governance is very much a hot topic of discussion these days in the offshore world, particularly in relation to insurance. Why so? The increase in focus is due to the enhanced scrutiny of onshore regulators and tax authorities following the recent round of accounting debacles and corporate insolvencies. Shareholders are also viewing the issue with increased interest; recent studies reveal that in 2001 there were 327 federal securities class action lawsuits filed in the US which is 60 per cent. more than in 2000.
The increase in potential liability has resulted in corporate risk managers re-examining internal controls and their D&O liability exposure. The extra demand for D&O liability coverage coupled with a reassessment of the underwriting risk by insurers has led to skyrocketing premiums. Many companies are now self-insuring an increasingly large amount of this exposure by taking on higher deductibles and lower coverage levels. In addition,
