Directors and officers insurers backdating claims face

28-Oct-2017 16:40

The article concludes with as the industry continues to transition to accountable care, risks and exposures will continue to emerge.

The entity coverage available under public company D&O insurance policies generally is limited to securities claims, while private company D&O insurance policies contain no such limitations, meaning that private company D&O insurance policies provide broad balance sheet protection for the insured companies.According to the report, since the 2010 passage of the ACA, health care organizations have been undergoing rapid consolidation, as they seek to form accountable care organizations (ACOs), which are joint ventures or affiliations “aimed at better coordinating services, reducing costs and improving the quality of care.” Because the formation of these ACOs expressly contemplates that the participating organizations will collaborate and share information, “some insurers have expressed concerns about the antitrust issues.” Among the insurers’ concerns is that, while the Federal Trade Commission and the Department of Justice have developed antitrust safe harbors for federally recognized ACOs, the extent of protection available under the safe harbors is “untested,” particularly in connection with private antitrust litigation.As a result of these concerns, D&O insurers have been raising their rates for health care organizations, as well as restricting the coverage available under their policies for antitrust claims.Graphical information in the report shows that for all health care organizations, both primary D&O premiums and overall premiums have been increasing steadily since the fourth quarter of 2011.

Along with these rate increases, some insurers have been restricting the coverage available under their policies for antitrust claims.According to the report, average primary D&O rate for smaller health care organizations (those with assets of 0 million or under and fewer that 1,000 employees) increased by 12.7% in the third quarter of 2013.