Marsh and Allied World Assurance Co. have rolled out a new product to cover the costs associated with Responsible Corporate Officer (RCO) investigations and related enforcement actions.
The product was designed to help life science, pharmaceutical and healthcare companies manage the risk of their corporate officers for violations under the RCO doctrine.
“Not only is responding to such enforcement actions expensive and time consuming, executives who neither participated nor had knowledge of alleged wrongdoing are at increased risk of being criminally prosecuted, losing personal income and facing a potentially career ending event,” said Maureen Gorman, a senior vice president within Marsh’s FINPRO practice. “RCO Corporate Response is designed to protect these executives from the financial impact that can ensue from such enforcement actions.”
Over the last two years, the Food and Drug Administration, Office of Inspector General, Department of Health and Human Services and other regulatory authorities have been pursuing corporate executives for violations of the Food, Drug, and Cosmetic Act using the RCO doctrine.
The doctrine allows criminal liability to be imposed upon individual corporate officers in positions of authority to prevent or correct wrongdoing within a corporation if they fail to do so. Government officials are not required to prove that a corporate officer participated in or was conscious of any wrongdoing.
Penalties for RCO violations can include fines, imprisonment, and debarment/exclusion from working with federal health care programs such as Medicare and Medicaid.
“This product specifically addresses the changing risks and exposures of the health care, medical device and pharmaceutical markets. Working with Marsh, we have created a product uniquely developed to address the ramifications of the increasing scrutiny of corporate officers, said Thomas Kennedy, senior vice president of professional lines at Allied World.
Marsh is a wholly owned subsidiary of the New York-based Marsh & McLennan Companies. Allied World is a global insurer with headquarters in Switzerland.
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