Civil Money Penalty Insurance for Bank Directors is Now Available
AmTrust, an AABD sponsor, is now offering civil money penalty insurance.
AmTrust developed this unique product to address the coverage gap resulting from the FDIC interpretation that coverage could no longer be endorsed to depository institutions’ Directors & Officers (D&O) policy. The CMP Personal Protection Policy is a separate, stand-alone insurance policy that is purchased directly by bank D&Os. The bank does not pay for, nor is it an insured party under the contract.
For purposes of the policy, CMPs are defined as monetary penalties or fines imposed by a regulatory agency against the institution-affiliated party. The term does not include defense expenses (which may be covered by the bank D&O policy), fees, multiplied damage awards, taxes, disgorgement, and matters uninsurable under the law.
For many years, AABD has called for changes in federal banking statutes to limit the scope of the federal banking agencies’ broad authority to impose civil money penalties on bank directors. However, the law remains unchanged. It still allows the agencies to impose substantial CMPs on directors even if they are acting in good faith and consistent with their fiduciary duties.
Click here to learn more about the product.
AABD is delighted that AmTrust is offering this coverage to bank directors and officers.
The contact person at AmTrust is:
Michael R. Whitbeck, Vice President of Underwriting
AmTrust North America
3 Independence Way, Suite 401
Princeton, NJ 08540