The D & O Diary blog, written by Kevin LaCroix, has a post entitled, "Tenth Circuit Takes a Look at D & O Policy Rescission" which covers a Tenth Circuit opinion on "whether misrepresentations in financial statements incorporated by reference in a D & O policy application could serve as a basis for policy rescission under Utah law."
In plain English, it means that your D & O carrier may rescind your policy if your company's financial statements and other items incorporated by reference in your insurance application contain material misstatements.
I suggest that Utah companies read Kevin LaCroix's blog post and the Tenth Circuit Opinion very carefully.
It is time for D & O carriers to be proactive monitors of corporate governance. After all, in many cases insurance carriers foot the bill for corporate malfeasance. Kevin LaCroix covers this issue in a previous blog item entitled, "Why Aren’t D & O Insurers Better Corporate Governance Monitors?"
Written by,
Sam E. Antar (former Crazy Eddie CFO & convicted felon)
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