Avoiding M&A Insurance Problems

Reprinted with permission from Risk Management, June 2009 issue, page 61. Copyright 2009 Risk and Insurance Management Society, Inc. All Rights Reserved. www.rmmagazine.com

Regardless of the economic cycle, corporate transactions are always taking place, whether through mergers, acquisitions, going private, or, in a recent trend, marriages between financial institutions arranged by the Treasury and the Federal Reserve. These transactions often have at least one common complication: insurance.

For a long time, scant attention was paid to insurance assets in even some of the larger M&A deals. Over the past decade or so that has changed with insurance taking up a more prominent piece of the due diligence checklist. The insurance review, however, usually does little more than scratch the surface. There are a number of reasons for this, including the fact that insurance is typically not a major driving force to consummating a deal and often the attorneys and investment