Transcript Supervisory Board meeting Allianz SE: Report of the Board of

Directors’ & Officers’ Liability Insurance &
Disclosure of Information
Moscow, November 19th, 2010
Karolina Vogelpohl, Regional Manager Financial Lines CEE
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Agenda

Effects of Information Disclosure

What is Directors’ & Officers’ (D&O) Liability Insurance?

Main Aspects of D&O Insurance

Latest Tendencies
 More claims against Directors’ & Officers’ from shareholders
 Proposed legislative changes
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Effects of Information Disclosure
 Disclosure of information – as a source of
potential errors => misrepresentation
 Annual Report = best source of information
disclosure
 increase of risk in misrepresentation to the
stake holders
 immediate impact on the stock dynamics (if
publicly listed company)
 May potentially lead to claims against the
directors (in Russia Chief Accountant &
General Director in particular)
Directors’ & Officers’ Liability Insurance could be viewed as a key risk management tool
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What is Directors’ & Officers’ (D&O)
Liability Insurance?
 Directors’ & Officers’ Liability Insurance
covers claims brought against Directors and
Officers of a company, for wrongful acts
committed in the discharge of their duties as
company managers causing financial loss to
the shareholders.
 Claimants could be:
-shareholders,
-bondholders,
-company itself,
-employees,
-customers,
-suppliers,
-competitors,
-regulatory bodies and others.
Directors’ & Officers’ Liability Insurance = “Sleep well at night” policy
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Main Aspects of D&O Insurance
 Personal liability of company D’s and O’s as individuals (Side A cover),
 Reimbursement of the insured company in case it has paid the claim of a third
party on behalf of its managers in order to protect them (Side B or Company
Reimbursement Cover).
 Listed stock companies can also obtain cover for claims against the company
itself for a wrongful act in connection with the trading of its securities (Side C or
Securities Entity Cover).
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Latest Tendencies
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Latest Tendencies
 More claims against Directors’ & Officers’ from shareholders
Increased claims against Ds & Os  claimants looking for “scapegoats”
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Latest Tendencies
 Proposed legislative changes including:
 changes to Section 71 of the Federal Law on
Joint-Stock Companies № 208-FZ of December
26, 1995 proposing possible indemnification of Ds’
& O’s liability (including defense costs) for
unintentional wrongful acts to be made available
by the company
 legislative recognition of companies’ rights to
purchase D&O Liability Insurance
More & More attention being devoted to D&O Liability including legislators
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Latest Tendencies
 Proposed legislative changes including:
 changes to the Federal Law on the Securities
Market №39-FZ of April 22, 1996 prescribing liability
to the issuer of securities for losses caused to
investors or/and shareholders for wrongful
information reported within the prospectus OR any
other wrongful information disclosure elsewhere
(including annual report)
More & More attention being devoted to D&O Liability including legislators
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Questions or Comments
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Thank you
for your attention!
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