The third panel on day one of the PLUS D&O Symposium addressed developments arising from the financial crisis and the implications of these developments for D&O insurers, and assessed the current and potential future impact on the underwriting of financial institutions.  One panelist believes that the industry has weathered the financial crisis fairly well.  There has been a conservative impact on pricing and underwriting, but not a dramatic spike.  Most of the panel remains cautious, however, and believes that the industry still has not seen the ultimate impact.  This has made financial institution underwriters more focused and interested in managing and understanding each and every risk.  Underwriters have sought and been granted greater access to clients and have asked more detailed questions in order to thoroughly evaluate each risk.

The panel also addressed the FDIC failed bank litigation.  Twenty one actions have been filed by the FDIC to date.  The panel expects to see a significant number of new FDIC lawsuits filed in 2012.  While there has been a decrease in failed banks, underwriters are still wary about such failures which has led them to “drill down” to determine whether they are offering the appropriate coverages and retentions.

The panel also addressed the ongoing Eurozone and European sovereign debt crisis.  The panel believes that the European crisis has the potential to become a significant problem in the U.S., and that it is already impacting financial institutions underwriting here.  The volatility and uncertainty in Europe impacts the U.S. financial markets such that a decrease in a company’s stock price could spawn suits.  This has prompted underwriters to ask more in depth questions about financial institution portfolios and exposure to troubled sovereign nations such as Greece, including the banks within those nations.