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Article: Class actions spike with subprime squeeze; Only half of large institutions have Side B D&O cover; many lack self-insurance mechanism.(Sector Briefing: Financial Institutions)
- Article from:
- Business Insurance
- Article date:
- June 9, 2008
- Author:
CopyrightCOPYRIGHT 2008 Crain Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: DAVE LENCKUS
Large financial institutions have the wherewithal to absorb any losses they suffer in securities litigation related to the subprime mortgage mess despite a lack of commercial insurance and no formal self-insurance mechanism to respond to the losses, risk management experts say.
But some experts question the wisdom of financial institutions not establishing some kind of formal self-insurance mechanism to help smooth any hits to their balance sheets and income statements.
To that end, some financial institutions are examining options that would soften the financial impact of a catastrophic loss that exceeds the D&O insurance ...