The recent publicity surrounding extradition of directors from UK companies to the US has created confusion about the scope of D&O cover. Buyers and brokers appear unsure as to whether or not the costs of defending and appealing extradition proceedings are covered. The issue is unlikely to go away as there is a likelihood of further extradition proceedings, for example in relation to price fixing.
Joe Fernandez, D&O Product Manager for ACE, said: "Our D&O policy wording has always catered for the defence and appeal costs associated with extradition proceedings. It's important that the market avoids making the matter more complicated by continually debating whether D&O will provide protection in these circumstances. In our view it does, and directors should not be left feeling confused."
In order to clarify this, and as a response to enquiries from brokers, ACE has issued a policy endorsement which clearly and explicitly states that extradition proceedings are included in order to remove any uncertainty.
Joe Fernandez continued: "The impact of the NatWest three case has caused a lot of concern amongst those involved in the D&O market. The fundamentals of the cover are to provide directors with peace of mind that their liabilities are covered. Our D&O policy offers an extensive range of protection and we believe that the costs relating to defending and appealing extradition proceedings should constitute a valid claim."
Notes to editors:
The ACE European Group comprises the operations of ACE Europe, ACE Global Markets and ACE Tempest Re Group. With an established presence in 16 countries across Europe and Freedom of Services permissions to operate in 27 European countries, ACE Europe provides a range of tailored Property and Casualty, Accident and Health and Personal Lines solutions for a diverse range of clients. ACE Global Markets (AGM) is ACE's specialty international business, underwriting through ACE's Lloyd's Syndicate 2488 and UK registered company ACE European Group Limited. Specialty lines include excess and surplus lines business, Marine, Aviation, Energy and Political Risk as well as Property, Financial Lines and Accident and Health. Additional information on ACE European Group can be found at www.aceeuropeangroup.com.
The ACE Group of Companies is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited (NYSE:ACE), a component of the Standard & Poor's 500 stock index, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries. Additional information can be found at: www.acelimited.com