| Summary: | 碩士 === 國立政治大學 === 風險管理與保險研究所 === 99 === The financial tsunami had proved that there is no corporation can exist forever and the invisible risk is the most important kind of risk. Until now, they are still occurring.
The first Directors and Officers’ Liability Insurance policy (D&O Insurance) was sold in U.S.A. 1934. In Taiwan, the first D&O Insurance was sold in October 9, 1996. We can find out that D&O Insurance is ignored in Taiwan.
Based on the data of Investor Protection Center in June 2008, the amount of the claims which were aroused by it can reach NT 240 billion. And the number of the investors can reach 64,000 people. Besides, based on the data of Insurance Association, the insurance premium in 2003 reached 249 million, in 2007 reached 623 million. Thus we can find out that D&O Insurance is not popular in Taiwan. But the loss run is getting more and more. For example, in ten policies, there is a one case will make a claim. In other words, the compensation rate can reach 12%.
Since 2001, the Enron case aroused attention of the government, the investment and operators in U.S. Furthermore, the government had promoted related rules to increase the directors’ and officers’ liability. In 2003, I had visited corporations and promoted D&O Insurance. Although the process of briefing and interaction can find out the strong demand of policy, but they had lower will to buy it. It might content several reasons, for examples, clauses are too complex and difficult to understand. Rising claims activity, including lawsuits by investors, tougher policy standards and coverage disputes, is the latest developments in the D&O insurance arena. As a result, some carriers have added limits to policies. The directors and officers bear liability of Securities and Exchange Act, Company Act, Civil Code. When the target company tries to protect the right of management against the hostile takeover action, they sometimes have to take any tactic in private and might also be faced more risk.
Could D&O Insurance distribute the risks which are aroused from the defense in the hostile takeover action? This article will study on the case and try to find the answers. We use the angle of the target company to inspect the function of D&O Insurance and hopefully try to amend it with the suggestion in the context. The function of D&O Insurance could be the key of corporate governance or distribution risks. For example, when the carriers provide the policy, we truly hope they could also provide positive solution to help the target company. Furthermore, the target company could participate in the design of policy.
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