D & O queries common from boards: survey.Liability is a paramount issue Noun 1. paramount issue - an issue whose settlement is more important than anything else; and issue that must be settled before anything else can be settled for directors these days, and for good reason. So, perhaps it's surprising that just half of all public and private companies have received directors and officers (D & O) liability insurance inquiries from their board members, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the D & O Liability 2005 Survey on Claims and Insurance Purchasing Trends conducted by the Tillinghast business of Towers Perrin Towers Perrin is a global professional services firm. It was established 1 March 1934 as Towers, Perrin, Forster & Crosby. The umbrella name of Towers Perrin was adopted in 1987. . In addition, approximately 30 percent of nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive. Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. have also received similar inquiries from their boards. In response, 19 percent of public companies made changes as a result of inquiries--though that percentage drops sharply to just 5 percent of private and 2 percent of nonprofit respondents. Tillinghast's survey, which included 2,694 participants, is its 28th in a series of studies on D & O liability claims and insurance purchasing trends. "The inclusion of directors and officers' personal assets in the Enron and WorldCom settlements accelerated the number of inquiries from boards," said Elissa Sirovatka, principal at Tillinghast. "Board members now recognize their accountability and are questioning their own levels of coverage." The good news for companies is that premiums are dropping: Tillinghast's D & O liability insurance average premium index dropped another 9 percent in 2005 after dropping 10 percent in 2004. The median premium index reached the lowest point since 2001, while the average premium index has fallen 18 from its high in 2003. However, claim susceptibility susceptibility the state of being susceptible. Refers usually to infectious disease but may be to physical factors such as wetting or to psychological factors such as harassment. (the percentage of participants reporting one or more claims), frequency (the average number of claims per participant) and severity continued to rise, much as they did in 2004. According to the survey, capacity leveled off in 2005, while coverage restrictions continued to ease. D & O insurance carriers provided approximately $1.5 billion in full limits capacity during 2005, while 99 percent of U.S. participants reported having D & O insurance. By the end of 2006, however, premium decreases are expected to flatten flatten - To remove structural information, especially to filter something with an implicit tree structure into a simple sequence of leaves; also tends to imply mapping to flat ASCII. "This code flattens an expression with parentheses into an equivalent canonical form." , and the amount of D & O coverage insurers write will start to decline, Sirovatka said. |
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