The endorsement was developed in anticipation of the U.S. Supreme Court’s
AIG, one of the largest D&O carriers in the world, is first to market with this new D&O policy endorsement. The endorsement has no retention requirement. Additional premiums are not required.
In Halliburton, the
In the ruling, the Court declined to reject the fraud on the market theory entirely. It held, however, that defendants were entitled to rebut plaintiff’s presumption of reliance on the theory with evidence that alleged misstatements had no ”price impact” on share value. Presenting this evidence, in the form of event studies prepared by expert economists, may lead to significant costs for plaintiffs and defendants early in the litigation process.
“During the Halliburton oral argument, we noted several Justices mention the event study as a form of expert evidence to assess price impact. We felt if the Court left fraud on the market standing, it would probably permit the parties to produce event studies in defense of the class certification process,” said
AIG’s D&O underwriters and claims professionals will continue to monitor interpretation of the Halliburton decision to determine whether additional policy endorsements or changes are necessary.
AIG offers market-leading primary and excess coverage to directors and officers of domestic and multinational public and private companies, non-profit entities, and financial institutions to protect against board level risks.
Additional information about AIG can be found at www.aig.com |
AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of
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