Via financialskeptic.blogspot.com/:
AIG (AIG) recently announced that they are changing some of the ways they are offering the critical Director's and Officers (D&O) Liability insurance coverage. The corporate press release claims that they are not changing the policy itself. They are just changing how and where the product is being offered. They claim that the new procedures will help remove confusion from less savvy buyers.
Given the current focus on governance the D&O policy should be receiving a great deal of scrutiny. I find it hard to believe that any corporate board with a pulse does not look at their D&O to see what it really is covering and how. Professional advisers, lawyers, auditors, compliance experts and savvy business people who want their butt covered must be scrutinizing the policy.
So when AIG announces a new way to do business I assume there must be market place pressures that they are attempting to deal with. The risk management types and insurance brokers probably knew where to go to get the policy. This one is here to help AIG more than their customers.
In almost the same time frame it was announced that Hank Greenberg would now be testifying in matters relating to AIG's accounting problems that were uncovered by New York's then Attorney General Eliot Spitzer. AIG paid huge billion dollar fines and Hank Greenberg took the fifth amendment and refused to testify at the time. Many feel that the move is tactical on the part of Hank Greenberg as he attempts to soften the blow of future proceedings.
Hank Greenberg to date has claimed he did not know about the accounting irregularities.
AIG must have the best experience in this type of governance issue. So if they are insuring you, you have to believe that they will be the best at this risk. What does best mean?
$64.44 (09/11/07)
