Partner Thomas Breen was quoted in “High Court’s Regulatory Rulings Unsettle Coverage Risks” in Law360 on July 3, 2024, discussing insurance implications of recent Supreme Court rulings in Jarkesy and Loper Bright, seeking to limit the power of regulators. Tom, “who represents carriers, said D&O policies often exclude securities claims in administrative courts and claims seeking fines from companies, agency actions that seek fines against individual directors and officers may be covered.
He noted that coverage for other charges often brought by the SEC — unjust enrichment, disgorgement — varies more often, and in the competitive D&O marketplace, insurers may contemplate changes to their policies after evaluating how risks have changed because of the courts’ decisions. “The insurance industry is always attempting to accommodate an insured’s best interest as best they can, especially in the underwriting stage,” he told Law360. “It’s certainly possible that the insurance industry will be looking to make some adjustments here and there, in this instance, to protect the insureds in these SEC enforcement actions in federal court.”
Breen said specialty line insurers are familiar with federal courts and their rules of statutory interpretation, which offers some predictability. “Predictability is good in the sense that you’re not stuck with trying to understand why a federal agency came up with a permissible interpretation, as opposed to what is the correct statutory interpretation of a statute,” he said.”
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