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Personal and Professional Protections

Personal and Professional Protections
An important recent change in the way civil money penalty liability insurance is handled by financial institutions involves the holder of the policy. Whereas this protection was once a component of a larger leadership D&O insurance policy, it is now divided off and held by individual officers and directors.

A Shift Towards Individuals

This widespread change is due to many factors, but chief among them is the increased scrutiny of regulatory bodies. This oversight has led to many officers accepting the personal responsibility for risks associated with their own professional ethics. Leadership members now often hold and pay for these policies as individuals.

The Institutional Context

The fact that these civil money penalty liability insurance is most often held by individual members of the financial organization's leadership does not preclude them from being affected by the institution itself. In fact, the opposite is true. Many important policy factors hinge on the institution:
  • Premium amount
  • Policy availability
  • Coverage level
Different institutions might pay more or less for the same amount of coverage. Determining this cost typically requires a close analysis of the structure and history of the company. Additionally, as this type of insurance is often viewed as a preventative or a peace of mind policy, it might be difficult to obtain civil money penalty liability insurance if such penalties have been issued to an institution in the recent past.