Perceived risk drives the market for directors and officers liability insurance. Even before the Enron crisis, it was becoming much more difficult for financial institutionss to obtain affordable D&O insurance. Enron not only exacerbated existing trends in the marketplace; it was the impetus for a new wave of change.
The following trends are a result, at least in part, of Enron’s collapse:
- Shifts in the risk assessment model;
- Heightened scrutiny of internal controls;
- An increased focus on independence;
- Active involvement by outside directors and corporate counsel in the insurance process;
- The increased costs of obtaining insurance.
Source: National Union Fire Insurance Company of Pittsburgh
Topics Directors Officers
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