Expert: D&O market to stay turbulent in 2003. (Property/Casualty: Loss/Risk Management Notes).The number of directors and officers liability claims will continue to increase in 2003, as insurers struggle with the failures of companies such as Enron Enron A U.S. energy-trading and utilities company that housed one of the biggest accounting frauds in history. Enron's executives employed accounting practices that falsely inflated the company's revenues, which, at the height of the scandal, made the firm become the seventh Corp. and Worldcom The former name of MCI. Based in Jackson, MS, WorldCom, Inc. was a major, international telecommunications carrier. It was founded in 1983 by Bernard Ebbers as Long Distance Discount Service (LDDS), a reseller of AT&T WATS lines to small businesses. Inc., said an attorney who specializes in D&O coverage. Matthew Matthew one of the twelve disciples. [N.T.: Matthew] See : Evangelism Schlesinger, an attorney with Washington, D.C., law firm McKenna, Long & Aldridge, said the federal Sarbanes-Oxley Act See SOX. will also encourage more claims and more lawsuits to be filed in the coming year. "There's no end in sight," Schlesinger said at Mealey's "Advanced Insurance Coverage Conference: Top 10 Issues for Practitioners," held in Philadelphia. The Sarbanes-Oxley Act, which makes corporate leaders criminally liable for false certification and tampering tampering The adulteration of a thing. See Drug tampering. with records, could open the door to additional D&O claims, Schlesinger said. The market is still turbulent from 2002, when five of the 10 largest bankruptcies occurred. U.S. companies paid $1 billion to settle securities fraud claims in 2002 alone, Schlesinger said. |
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