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DIRECTORS, OFFICERS FACE LARGER SUITS OVER INSOLVENCY, DISCLOSURE ISSUES

 DIRECTORS, OFFICERS FACE LARGER SUITS OVER INSOLVENCY,
 DISCLOSURE ISSUES
 Some Banks Face Stiff D&O Premium Increases on Renewal,
 Wyatt Study Finds
 CHICAGO, Feb. 24 /PRNewswire/ -- Both the number and size of suits against directors and officers resulting from issues related to financial condition and inadequate or inaccurate corporate disclosure are increasing, according to a survey by The Wyatt Company. The new D&O liability survey shows shareholders were the most likely to sue, accounting for 47 percent of claims.
 About one third of shareholder claims involved mergers, acquisitions, takeovers or divestitures, according to Phil Norton, a Wyatt risk management consultant in Chicago. "Companies involved in such activity during the past five years were more than three times as likely to have a D&O claim filed," he said. "Overall the number of claims has leveled off, but the severity of claims continues to increase significantly."
 Incorporating data from 1,501 companies, the "1991 Wyatt Directors and Officers Liability Survey" reports the sources, frequency and size of D&O claims as well as corporate D&O insurance purchasing practices. Over the 20 years since the first Wyatt D&O Liability Survey, average premiums reported by participants have risen by about 700 percent, although premiums initially fell by 50 percent in the decade leading up to 1984.
 Large Banks Face Most Claims, Biggest Premiums
 "The increasing number and size of shareholder claims, coupled with the substantial level of employee and customer claims historically faced by the banking industry, are affecting D&O coverage and claims for that industry," said Norton. Large banks reported the highest claim frequency of the 12 industry groups analyzed in the survey.
 The large bank industry group also paid the highest premiums with a median total premium of $366,000 in 1991 compared to a median premium of $191,000 for all participants. While large banks have a high frequency of coverage (91 percent), the majority of banks that did not purchase coverage said it was because the cost was too high, according to Norton.
 Survey Information
 Wyatt's 1991 D&O Survey covers 1,501 participants, the majority of which were publicly traded corporations. While the median asset size was approximately $500 million, 569 corporations with over $1 billion in assets participated.
 The "1991 Wyatt Directors and Officers Liability Survey" can be ordered by calling Wyatt at 312-704-2719, or by sending a check for $250 to The Wyatt Company, D&O Services, 303 West Madison St., Suite 2400, Chicago, IL., 60606.
 The Wyatt Company is an international consulting firm, specializing in the areas of human resources, financial management, and systems, with 3,700 employees in 70 cities.
 -0- 2/24/92
 /CONTACT: Michael Bullard, 202-508-4848, or Jennifer Eaton, 202-508-4842, both of The Wyatt Company/ CO: The Wyatt Company ST: IN: SU:


TW-SB -- DC007 -- 1766 02/24/92 09:46 EST
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Publication:PR Newswire
Date:Feb 24, 1992
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