NACD's D&O Liability Insurance Review Services
Your board's resource for independent analysis of the effectiveness of its D&O liability insurance.
About the Service
NACD has established an independent consulting service through which NACD members can have their corporate Directors & Officers liability insurance coverage professionally reviewed on their behalf.
The goal of this service is simple -- to offer NACD member directors the assurance that their board's D&O insurance is appropriate and relevant to their individual needs. The scope and amount of coverage will be carefully analyzed to make as sure as possible that it provides reasonable and appropriate coverage for the specific liabilities incurred by each board's directors in the performance of their duties.
How it works
- Phone or e-mail inquiry to NACD at the address listed below.
- NACD's D&O professionals will contact you promptly and will let you know exactly what will be needed to perform the study [most likely a completed exposure questionnaire, the current D&O policy and application, form 10-K, and your agreement to make a knowledgeable person available for a telephone interview.]
- A complimentary, no-obligation proposal with firm fee quotations will be e-mailed promptly. It may be accepted online.
- Once engaged, NACD's consultants will write a concise and succinct report that will include an analysis and critique of the board's current coverage with their specific recommendations for those coverage additions or improvements needed to make the coverage as complete and appropriate as possible to the needs and exposures of the corporation and each individual director.
- The consultant will stand ready to answer any questions that you, the board, the auditor or the insurance agent may have.
- This report will be delivered in an online format that a corporate director or board may share with auditors and regulators as confirmation of appropriate D&O liability insurance coverage.
- The report can be easily forwarded to the agent of choice for implementation
- NACD's consultants will not, in order to remain independent and unbiased, ever act as an insurance agent or broker. Their only remuneration will be the agreed upon consulting fee.
Timing and Delivery: Each assignment should be completed in 45 to 60 days but may be expedited upon request.
For more information, please contact cmoody@NACDonline.org or call NACD at 202-775-0509.
Qualifications of NACD's Independent Consultant
Edgar W. Armstrong CPCU, ARM, has been selected by NACD to conduct and manage this service on its behalf. NACD chose Mr. Armstrong only after careful review of his experience and qualifications which include:
A broad background in risk and insurance operations with more than 25 years' experience in:
- Agent and broker operations,
- Corporate risk and insurance management,
- Insurance and actuarial consulting, and
- Captive insurance company creation and management
This has prepared him to offer professional, experienced advice to NACD members for virtually any of their insurance-related needs. He has assisted hundreds of business organizations in a consulting capacity and managed the general insurance and actuarial operations of two of the leading consulting organizations in the world: Watson Wyatt and Aon Risk Management Services. He has a uniquely broad scope of experience with financial institutions where his clients have included the American Bankers Association, the Independent Bankers Association of America, the Mortgage Bankers Association of America, the Federal Deposit Insurance Corporation, the U.S. League of Savings Institutions, the Securities Industry Association and the Investment Company Institute.
- Underwriter for both the Travelers Insurance Company and the Insurance Company of North America,
- Corporate Insurance Manager - Marriott Corporation,
- Director of Insurance and Protection - American Bankers Association,
- Manager, Risk & Insurance Services - Watson Wyatt,
- Chairman, Captive Insurance Council of the District of Columbia,
- Director, DC Chapter of the Society of Chartered Property and Casualty Underwriters,
- Faculty, Graduate School of Banking, Bank Administration Institute.
- Distinguished Contributor, ASAE
- Director and President, Member Services, Inc. (IIAA)
- Chairman, Liability Task Force, American Society of Association Executives (ASAE)
- Faculty Member and Creator ABA Risk and Insurance Management in Banking Seminars
- Director, InsurBanc (IIAA's commercial bank)
- Director, ASAE Insurance Company
- Managing Director - Aon Risk Management Services,
- President, Member Services - Independent Insurance Agents of America, and
- President, Chesapeake Chapter, Risk and Insurance Management Society.
- Chartered Property/Casualty Underwriter (CPCU),
- Associate in Risk Management (ARM), and
- Licensed Property/Casualty and Life/Health agent in all states
- Registered Securities Representative, Principal Financial Group
- How to Make Sure Your Insurance Program Works - ASAE,
- Digest of Bank Insurance - American Bankers Association (ABA),
- Marketing Your Bank's Insurance Program - ABA, and
- The Insurance Guide for Savings Institutions - U.S. League of Savings Institutions
- D&O Insurance: What Every Director Should Know: Bank Director Magazine
- Agency/Bank Joint Ventures (IIAA)
- Director and Officer Liability: Getting the Right Coverage, American Banker, December 2002
- The Association Insurance Program Guide and Survey Report - American Society of Association Executives (ASAE),
- Selling Insurance Through Banks: Agent & Banker Perspectives and Strategies
D&O Insurance Background-Critical Protection for Corporate Boards
Few corporate directors have the time or resources to evaluate the adequacy of their board's Director's and Officers liability policies with regard to their specific needs and liability. Yet to be truly effective, directors must have some reasonable assurance that they are protected from suits filed against them even when they are performing their directorial duties as thoroughly and prudently as possible.
D&O insurance can offer broad and meaningful protection to the director - broader than that provided by even the most carefully drafted corporate indemnification agreements. But D&O policies are non standard - each insurer has its own form, insuring agreements, exclusions and conditions - no two are alike. It is therefore incumbent upon the director to understand those coverage issues which are most critical to his or her personal protection and make sure that they are adequately and appropriately addressed.
It is not always possible to know whether or not the person charged with procuring the corporate D&O policy is competent and without conflicting interests. For example, if the corporate insurance manager is a clerk in the finance department with no insurance background who depends entirely on the broker for coverage design there could be a problem. Even the most competent broker must, in addition to the board's coverage needs, consider his relationship with the insurer and his firm's profit margin. These considerations may at times be conflicting. If the insurance manager doesn't have the necessary expertise, an independent and unbiased insurance expert should be consulted. As a matter of fact, The Model Business Corporation Act allows directors to rely on the opinions of non-conflicted outside experts. It is important to make sure that your insurance consultant's income isn't affected by "how much" insurance you buy and that your auditor is not also the consultant who structures the insurance program upon which his firm must later provide "an opinion." Unfortunately, it is difficult and expensive for the director to obtain an non-conflicted, professional analysis of the insurance provided for him or her from a trusted source.
This consulting service is intended to enable NACD members to better understand and benefit from one important source of protection in an increasingly litigious business environment - their corporation's D&O insurance policy. NACD believes that the better directors understand how this critical coverage works and how to make sure it provides the maximum in protection for them, the more likely they are to be comfortable in their directorial roles and therefore more inclined to continue or begin their board tenures - to the very direct benefit of the American economy.