March 7, 2011

New Rules on Payments

“I think the process is working well. I do think I’ve heard enough about lack of transparency and lack of consistency that we have to do something about that.”

—BP Oil Spill Claims Fund Administrator Kenneth Feinberg recently announced new rules on how final payments in the $20 billion fund will be determined, but the central payment formula remained unchanged from an earlier proposal. Feinberg has been criticized about the size and pace of payments. Under the plan, claimants would receive twice their documented 2010 losses. Oyster harvesters would be offered four times their losses. One change is that he’s allowing is for oyster processors to collect the same payment that he’s allowing oyster harvesters to claim.

Higher Exposures, Limits

“Clearly, companies are reacting to the fact that D&O liability exposures facing directors and officers are arguably at an all-time high. Insurance buyers continue to be threatened by an ever-expanding litigation environment and have an increased awareness over regulatory issues they might encounter.”

—Larry Racioppo, with the executive liability group in Towers Watson’s Brokerage unit. A Towers Watson survey shows that companies are increasing their D&O liability limits and a growing number with international operations are also purchasing D&O policies in foreign jurisdictions. According to Towers Watson, 21 percent of respondents increased their D&O limits, versus 12 percent in 2008, the last time the survey was conducted.

Uninsured Drivers Beware

“We currently require drivers to carry liability insurance so they can pay for any damages they cause in an accident, but the law has no teeth. As a result, uninsured drivers get to bypass premiums, avoid liability, and still collect large awards if they are in an accident.”

—Oklahoma State Rep. George Faught, R-Muskogee has introduced House Bill 1045, which would prohibit uninsured drivers from being able to sue for vague “pain and suffering” damages after an accident. Under the bill, the “maximum amount” an uninsured driver could receive through a lawsuit following an automobile accident would be limited to “the amount of medical costs, property damage, and lost income.”

Topics Directors Officers

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Insurance Journal West March 7, 2011
March 7, 2011
Insurance Journal West Magazine

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