Tag Archives: FDIC

The Fed Has a Message for Banks about D&O Insurance          

The Federal Reserve wants bank directors and senior executives  to know that while their D&O insurance policies are “an important risk mitigation tool,” their policies could contain exclusions that could “potentially limit coverage” and leave them without insurance in the event of a claim. In a July 23, 2019 letter (here), the Fed informed banks … Continue Reading

Here’s Some Good News: No Bank Failures

Want some good news? During calendar year 2018, there were exactly zero bank failures in the United States. Zero. Nil. Nada. Zilch. The last time there were no U.S. bank failures was waaaay back in 2006. Needless to say, a lot has happened since then. But the best part of all is that because of … Continue Reading

Prior Acts Exclusion Does Not Preclude Coverage Where Subsequent Claim Independent from Alleged Prior Acts

In a January 23, 2018 unpublished decision (here), the Eleventh Circuit held that a D&O insurance policy’s prior acts exclusion does not preclude coverage where the subsequent claim against insured persons is “independent” from the alleged wrongful acts that occurred prior to the policy period. The appellate court’s opinion, in which it affirmed a district … Continue Reading

Ninth Circuit: Insured vs. Insured Exclusion Unambiguously Excludes FDIC’s Failed Bank Claims

During the bank failure wave that followed the global financial crisis, one of the recurring questions was whether or not the failed banks’ D&O insurance policies’ insured vs. insured exclusion precluded coverage for the FDIC’s liability claims as receiver for the failed bank against the banks’ former directors and officers . As I noted in … Continue Reading

Ninth Circuit Holds Applicability of Insured vs. Insured Exclusion to FDIC-R Claims to be Ambiguous

During the course of the wave of failed bank litigation following in the wake of the global financial crisis has been a raft of related coverage litigation addressing the question of whether coverage for claims by the FDIC as receiver of the failed bank against the bank’s former directors and officers is precluded by the … Continue Reading

Answering Bank Directors’ D&O Insurance Questions

Bank directors often have many questions about their D&O insurance coverage, and rightly so. If significant reversals at the bank result in liability claims against the company’s senior officials, the bank’s D&O insurance could be the directors’ last line of defense. In this post, I address two issues that bank directors often ask about: first, does … Continue Reading

Fourth Circuit Affirms Dismissal of All Claims Against Failed Bank’s Directors, Revives Negligence Claims Against Bank’s Officers

On August 18, 2015, in an interesting opinion that takes a close look at exculpatory bylaw issues and the business judgment rule under North Carolina law, the Fourth Circuit affirmed in part and reversed in part the district court’s dismissal of the failed bank lawsuit the FDIC had filed against former directors and officers of … Continue Reading

Tenth Circuit: D&O Insurance Policy’s Insured vs. Insured Exclusion Unambiguously Precludes Coverage for FDIC’s Failed Bank Claims

In an important decision concerning D&O insurance coverage in connection with failed bank claims, the Tenth Circuit, applying Kansas law, held that a D&O policy’s insured vs. insured exclusion unambiguously precluded coverage for claims brought by the FDIC as receiver of a failed bank against the bank’s former directors and officers. The Tenth Circuit’s decision arguably … Continue Reading

D&O Insurance: Eleventh Circuit Holds Insured v. Insured Exclusion’s Applicability to FDIC Failed Bank Claims Ambiguous

Going all the way back to the S&L crisis, a recurring insurance coverage issue that has arisen in the failed bank context has been the question of whether or not coverage for a claim brought by the FDIC in its capacity as receiver of a failed bank against the failed bank’s former directors and officers … Continue Reading

FDIC: Banks Prosper, Problem Institutions Remain

The banking industry had a “positive quarter” in the third quarter of 2014, according to the FDIC”s latest Quarterly Banking Profile. Banks continue to improve and are performing  better than during the same period a year ago. In the aggregate during the quarter, banks reported income growth based on growing revenue rather than just lower … Continue Reading

D&O Insurance: Insured vs. Insured Exclusion Applicability to FDIC Failed Bank Claim Held Ambiguous

As I have previously noted on this blog, one of the recurring D&O insurance coverage issues arising during the latest bank failure wave has been the question whether the Insured  vs. Insured Exclusion precludes coverage for claims brought by the FDIC in its capacity as receiver for a failed bank against the failed bank’s former … Continue Reading

FDIC: Banks Improve, Problem Institutions Linger

Overall, the banking industry continued to improve in the first quarter of 2014, although banks did see their noninterest income decline due to reduced mortgage activity and a drop in trading revenue, according to the FDIC’s Quarterly Banking Profile for 1Q14. The latest Quarterly Banking Profile can be found here and the FDIC’s May 28, … Continue Reading

D&O Policy Excluding “Receiver” Claims Bars Coverage for FDIC Failed Bank Lawsuit

In an interesting April 7, 2014 opinion (here), Magistrate Judge Stanley A. Boone of the Eastern District of California, applying California law, held that a D&O insurance policy’s insured vs. insured exclusion precludes coverage for claims brought against former officers of the failed County Bank of Merced, California by the FDIC in its capacity as … Continue Reading
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