Since our last update, there have been significant developments in the FI and D&O landscape. November saw the first ever UK deferred prosecution agreement (DPA) announced between the SFO and Standard Bank. The DPA process has been available but unused since 2014 so the judgment and the SFO's comments thereafter provided some much needed guidance on what the process involved. Significantly, weight was placed on Standard Bank's early self-reporting and cooperation. Interestingly, the Sweett Group tried and failed to obtain a DPA, with one of the reasons cited for the failure being their lack of early cooperation, and they found themselves convicted under the Bribery Act and facing a substantial fine. We await with interest whether more companies will try and agree such an agreement with the SFO in the future and the implications this will inevitably have for D&Os and their insurers.
Individual accountability and responsibility of directors and senior managers has come into focus with the introduction of the Senior Managers Regime (in force from 7 March 2016) and the new FCA rules on whistleblowing (coming into force September 2016). Regulators want financial institutions and directors and officers to take responsibility for their actions in order to prevent a reoccurrence of the global financial crisis. The coverage issues that these regimes throw up, in relation to investigation costs and admissions for example, deserve particular scrutiny and insurers may need to consider how these are dealt with in their policies.
Elsewhere in this Review, we provide a roundup of the FI and D&O landscape in the United States, examine the importance of corporate culture from an Australian point of view, look at insolvency issues in Canada and provide an analysis on the key issues in the UK, including the recent string of mis-selling claims handed down and the threat posed by cyber attacks. To finish, we give our usual case summary round up.
FI and D&O International Review - May 2016
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