D&O Seminar - Final Eng & Viet - Marsh

7/28/2019 D&O Seminar - Final Eng & Viet - Marsh

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Directors & Officers Liability Insurance

The information in this document has been compiled not as a comprehensive review but rather as a guidance document only. The admissibility ofany claims revolve around specific circumstances and legal interpretations of the policy at the material time. We are not providing legal advice andMarsh FINPRO ASEAN accepts no liability for any loss or damage arising directly or indirectly out of any error in or omission from this document.

20 July 2007

MARSH VIETNAM LTD.Level 10, #8 Nguyen Hue

HCMC, Vietnam

Tel: 848 822 7456 Fax: 848 822 7343

FINPRO Division:Collin CP Yap - FINPRO Practice Leader

Duong TN Phuong Deputy GD

Hoang M Tuan - Special Practice Leader

Bui H Tri - Client Development Executive


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BO HIM TRACH NHIEMCHO GIAM OC VA NGI IEU HANH

Tai lieu nay c bien soan mang tnh chat tham khao. Viec giai quyet boi thng thiet hai khi co tonthat xay ra da tren thi iem thc te va pham vi bao hiem cua n bao hiem a c cap. Chung toi sekhong cung cap cac t van phap l thong qua tai lieu nay va Marsh cung khong chu trach nhiem cho

nhng ton that hoac thiet hai trc tiep hay gian tiep gay ra bi sai sot cua tai lieu nay.

20 July 2007

MARSH VIETNAM LTD.Level 10, #8 Nguyen Hue

HCMC, Vietnam

Tel: 848 822 7456 Fax: 848 822 7343

FINPRO Division:Collin CP Yap - FINPRO Practice Leader

Duong TN Phuong - Deputy GD

Hoang M Tuan - Special Practice Leader

Bui H Tri - Client Development Executive


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Contents

1- Why is there a need for Directors & Officers Liability

Insurance2- Essence of D&O Liability Insurance Policy

3- Features of D&O Liability Insurance Policy

4- Principal Extensions5- What are the Exclusions under the Policy

6- Notification Provisions

7- Introduction to Marsh


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NOI DUNG

1- V sao can bao hiem trach nhiem cho Giam oc va ngi ieuhanh (D&O)

2- S can thiet cua bao hiem D&O3- iem ac trng trong bao hiem D&O

4- Cac pham vi bao hiem m rong quan trong cua n bao hiem D&O

5- Nhng iem loai tr trong n bao hiem D&O

6- Ngha vu khai bao

7- Gii thieu ve Marsh


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Why is there the need for D&O Liability

Insurance?

Directors and officers could be potentially exposed to allegationsof wrongful acts

The policy protects the directors & officers personal liability

against suits and claims alleging, e.g. breach of duty, breach of

trust etc.

The policy pays for defence cost and judgments awarded against

directors and officers

Article 165(1) of the Enterprise Law 2005 subjects directors and

officers to consequences when the law is breached


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V SAO CAN BAO HIEM D&O?

Giam oc & ngi ieu hanh co the b oi au vi cac li cao buoc vecac hanh vi sai trai cua ho

Hp ong bao hiem dung e bao ve trach nhiem ca nhan cua Giamoc & ngi ieu hanh trc nhng li cao buoc va khieu kienVD:

thieu trach nhiem, thieu tn nhiem/ tin cay

n bao hiem chi tra chi ph bao cha & an ph ma Giam oc & ngiieu hanh phai chu theo phan quyet cua toa

ieu khoan 165(1) Luat Doanh Nghiep nm 2005 quy nh ro trachnhiem cua Giam oc & ngi ieu hanh khi ho vi pham luat


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Why is there a need for D&O Liability Insurance

Article 165(1) (Dealing with violations) of the Enterprise law2005

Depending on the nature and extent of the breach, person

who commits such a breach will be subject to a discipline,administrative punishment or criminal prosecution in

accordance with the laws. The offender will be liable to

indemnifyany damage caused to the enterprise, owner,

members, shareholders, creditors or other persons inaccordance with the laws.


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ieu khoan 165(1) (lien quan en vi pham)

cua Luat Doanh Nghiep nam 2005

Ngi co hanh vi vi pham cac qui nh cua luat nay th tuy theo tnh chat vamc o vi pham ma x l k luat, x phat hanh chnh hoac b truy cu

trach nhiem hnh s theo qui nh cua phap luat; trng hp gay thiet haien li ch cua doanh nghiep, chu s hu, thanh vien, co ong, chu n

cua doanh nghiep hoac ngi khac th phai boi thng theo qui nh cua

phap luat.

V SAO CAN BAO HIEM D&O?


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Essence of the D&O Policy

Structure of a typical D&O cover

Covered securitiesclaim againstcorporate entity

Insured -Corporate entity as a

defendant in securitiesclaims only

Corporate assets

D&O InsuranceInsuring Agreement C:

Corporate entity coveragefor securities claims

Side C

Retention applies

Covered securitiesclaim againstcorporate entity

Insured -Corporate entity as a

defendant in securitiesclaims only

Corporate assets


Corporate entity coveragefor securities claims

Side C

Retention applies

Covered claimagainst Directors &Officers

Insured -Directors & Officers

Insured -Corporate entity to the extent

it has indemnified D&Os

Indemnification?

No Yes

Personal assets

D&O InsuranceInsuring Agreement B:

Corporate Reimbursement

Corporate assets

D&O InsuranceInsuring Agreement A:

Side A Side B

Retention applies

Who?

What?

Where?





Indemnification?

No Yes

Personal assets



Corporate assets


Side A Side B

Retention applies

Who?

What?

Where?





Indemnification?

No Yes

Personal assets



Corporate assets


Side A Side B

Retention applies

Who?

What?

Where?


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AC IEM N D&O

C cau n BH D&O

Covered securitiesclaim against

corporate entity

Insured -

Corporate entity as a

defendant in securities

claims only

Corporate assets


Corporate entity coverage

for securities claims

Side C

Retention applies

Khieu nai lq chng khoanChong laiDoanh nghiep

Insured -

Doanh Nghiepla b n trong khieu nai

Lq chng khoan

Tai san doanh nghiep

BH TN D&OThoa thuan BH C:

Pham vi BH DNCho khieu nai lq chng khoan

Side C

Mc mien thng ap dung

Covered claimagainst Directors &

Officers

Insured -

Directors & Officers

Insured -

Corporate entity to the extent


Indemnification?

No Yes

Personal assets

D&O Insurance

Insuring Agreement B:


Corporate assets

D&O Insurance

Insuring Agreement A:

Side A Side B

Retention applies

Cai g?

Covered claimagainst Directors &

Officers

Insured -

Directors & Officers

Insured -

Corporate entity to the extent


Indemnification?

No Yes

Personal assets

D&O Insurance

Insuring Agreement B:


Corporate assets

D&O Insurance

Insuring Agreement A:

Side A Side B

Retention applies

Khieu nai chong laiD&O

Insured-

G & NH

Insured -

Trach nhiem rang buoc giaDN va G & NH

Boi thng?

No Yes

Tai san ca nhan

BH TN D&OThoa thuan BH B:

DN boi thng trc

Tai san doanh nghiep

BH TN D&O

Thoa thuan BH A:

Side A Side B

Mc mien thng ap dung

Ai?

au?


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Essence of the D&O Policy (contd)

Who is Insured?

(a) all PAST, PRESENT and FUTURE directors and officers of theinsured organisation and its subsidiary companies

(b) nominee directors of the insured organisation on the Board of its

associate companies

(c) heirs, estates, legal representatives and lawful spouse

(d) any natural person who is a trustee of a pension, retirement or

provident benefit fund established for employees benefit

(e)

the policy is NOT intended to cover the own liability of the corporateentity


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AC IEM N BH D&O (tt)

Ai la Ngi c Bao Hiem ?

(a) Tat ca Giam oc & ngi ieu hanh trong QUA KH, HIEN TAI vaTNG LAI va cac cong ty thanh vien cua doanh nghiep c baohiem

(b) Cac Giam oc cua doanh ngiep c bao hiem c bo nhiem vaohoi ong quan tr cua cong ty phu thuoc

(c) Ngi tha ke, tai san tha ke, ai dien hp phap va v/chong hpphap

(d) Nhng ngi tha ke hien nhien c uy thac oi vi CNV chc ve

hu, hu tr hoac cac khoan tiet kiem c(e) n BH nay KHONG c bao hiem cho trach nhiem cua n v

kinh doanh doanh nghiep


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The policy insures against LOSS resulting from CLAIMS against

the directors and officers of the insured organisation alleging a

Wrongful Act committed while acting in their capacity as

directors and officers


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n bao hiem nay bao hiem cho nhng TON THAT phatsinh t vu KHIEU KIEN chong lai Giam oc & ngi ieuhanh cua doanh nghiep c bao hiem vien do Hanh Vi Sai

Trai xay ra trong khi ho thc hien chc nang cua G &NH.

AC IEM N BH D&O (tt)


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Wrongful Act means any actual or alleged breach of duty, breach of

trust, neglect, error, misstatement, misleading statement, omission,

breach of warranty of authority or other act by the directors and

officers in their respective capacities


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Hanh vi sai trai (Wrongful Act) co ngha bat k hanh ong trc tiephay gian tiep nao dan en viec thieu trach nhiem, thieu tn nhiem, l la,sao lang, phat ngon sai, phat ngon dan en hieu nham, vi pham cac camket oi vi chnh quyen hoac cac hanh ong khac cua G & NH trong

kha nang ca nhan cua ho

AC IEM N BH D&O


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What is a covered Loss under the Policy?

- Insured Persons legal liability to pay for damages, settlements

and costs

- Defence Costs which is advanced for covered Claims after the

applicable retention has been satisfied


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Ton that nao c bao hiem di n D&O?

Trach nhiem phap ly cua Ngi c Bao Hiem phai boithng cho nhng thiet hai, khoan thanh toan va cac chi ph

Chi ph bien ho c tam ng trc cho nhng vu kienc bao hiem sau khi khau tr mc mien thng

AC IEM N BH D&O


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Principal Extensions

Subsidiaries

- Coverage applies to companies in which the named Insured owns,

directly or through one or more Subsidiaries, more than 50% of theoutstanding securities

New Subsidiaries

- The policy automatically provides coverage for new subsidiariesprovided that the total asset size of the new subsidiary does notexceed a pre-agreed percentage of the Insured's total asset size

- A 30 to 60 day coverage window is usually available for new

subsidiaries which are larger than this threshold

- The new subsidiary must be noticed to the Insurer during this window,and the Insurer must agree to provide coverage beyond the window


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NHNG IEU KHOAN M RONG CHNH

Cong ty thanh vien:

- Pham vi bao hiem ap dung cho cac cong ty Ma Ngi c bao Hiem s hu trctiep hoac thong qua mot hay nhieu Cong ty thanh vien va chiem hu nhieu hn50% co phan

Cong ty thanh vien mi thanh lap

- n bao hiem t ong bao hiem oi vi cac cong ty thanh vien mi c thanh lapvi ieu kien tong gia tr tai san cua cong ty thanh vien mi thanh lap khong vtqua t le a c thoa thuan tren tong tai san cua doanh nghiep c bao hiem

- Mot thi han 30 hoac 60 ngay co the c chap nhan cho cac cong ty thanh vienmi thanh lap, neu cac cong ty nay co t le vt qua mc thoa thuan neu tren

- Cong ty mi thanh lap phai thong bao cho Cong ty bao hiem trong khoan thi hanneu tren (30-60 ngay) va Cong ty bao hiem phai ong y bao hiem cho khoan thigian vt qua


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Principal Extensions

Outside Directorships

- Provides coverage for claims brought against the Insured's directors

and officers while serving as a director or officer of an outside entity

(any non-profit organization or scheduled for-profit organization) when

the Insured has requested that they serve in such capacity. The

coverage applies on either a triple or double excess basis. Triple

excess means that the Insurer's policy applies excess of the outside

entity's indemnification provisions, the outside entity's applicable

insurance, and the Insured's indemnification provisions. Double

excess means that the Insurer's policy applies excess of anyapplicable insurance or indemnification available to the director or

officer from the outside entity.


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Kiem nhiem chc vu tai doanh nghiep khac:

Cung cap pham vi bao hiem oi vi cac khieu kien chong lai G &NH c bao hiem khi ho thc hien vai tro cua G & NH cua motcong ty ben ngoai (cho du o la to chc li nhuan hay phi li nhuan)trong trung hp ngi c bao hiem a yeu cau rang ho thc hienngha vu trong kha nang cua mnh. Pham vi m rong nay se ap dungtheo nguyen tac vt qua (cap hai hoac cap ba). Trach nhiem vtqua cap ba co ngha rang n bao hiem nay se boi thng phantrach nhiem vt qua quy d phong boi thng, hp ong bao hiem(neu co) va quy d phong boi thng cua Ngi c Bao Hiem.Trach nhiem vt qua cap hai co ngha rang n bao hiem nay seboi thng phan trach nhiem vt troi cua n bao hiem (neu co)hoac quy boi thng san co oi vi G & NH t doanh nghiep cbao hiem bo sung.



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Principal Extensions (contd)

Employment Practices Liability

- Extends coverage to directors and officers for claims alleging

employment discrimination, sexual harassment, wrongful termination

and other related employment torts


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Trach nhiem lien quan en ngi lao ong:

- n bao hiem nay m rong bao hiem G & NH cho nhng caobuoc ve phan biet oi x trong cong viec, quay roi tnh duc, ket thuchp ong khong ung qui nh va sai pham khac lien quan en ngilao ong



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Principal Extensions Applicable to theCorporate Entity

Entity Coverage for Employment Practices Liability

- Extends coverage to the corporate entity for

claims alleging employment discrimination,

sexual harassment, wrongful termination and

other related employment torts

Entity Coverage for Securities Claims

- Extends coverage to the corporate entity for

claims alleging violations of the securities laws


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Trach nhiem cua doanh nghiep lien quan en ngi lao ong:

n bao hiem nay m rong bao hiem G & NH cho nhng caobuoc ve phan biet oi x trong cong viec, quay roi tnh duc, ketthuc hp ong khong ung qui nh va sai pham khac lien quan enngi lao ong

Trach nhiem cua doanh nghiep lien quan en phat hanh chng khoan M rong bao hiem cho doanh nghiep cho nhng khieu kien cao

buoc vi pham luat chng khoan

IEU KHOAN M RONG AP DUNG CHO DOANHNGHIEP


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What are the Exclusions Under the Policy?

4 categories:

1) Personal Conduct Exclusions:

- personal profit, advantage insider

trading

- dishonest or fraudulent act / willful

breach

final adjudication

2) Known Claims & Circumstances

Exclusion or Prior & Pending

Litigation


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NHNG IEM LOAI TR TRONG N D&O

4 loai ien hnh:

1) Loai tr cac hanh ong mang tnh canhan:- Truc li ca nhan, li dung thong tinkinh doanh noi bo e truc li

- Nhng hanh ong khong trung thchoac la ao / hanh vi chu y vi pham da vao phan quyet cuoi cung

2) Loai tr nhng s co va vu khieu naia phat sinh hoac vu kien tung a xayra hoac ang dien tien


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What are the Exclusions Under the Policy?(contd)

3) Other more specific policies available:

e.g. Bodily Injury / Property Damage / Pollution / Professional

Indemnity

4) Insured vs Insured Exclusion

Excludes coverage for claims brought against the directors and

officers by or on behalf of other directors and officers. However, you

have carve backs from this exclusion for Derivative Suits,

Employment Practices Claims and Defence Costs.


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NHNG IEM LOAI TR TRONG N D&O

3) Loai tr nhng ton that hoac thiet hai a c bao hiem bi mot n baohiem khac:

- Thng tat than the / Ton that tai san / O nhiem / Trach nhiem nghenghiep

4) Loai tr khieu kien cua Ngi c bao hiem kien ngi c bao hiem

- Loai tr cac vu kien oi vi Giam oc va ngi ieu hanh thc hien bihoac ngi ai dien cua G & NH khac. Tuy nhien, ban co the yeu caumua lai cac ieu khoan loai tr nay cho vu kien, khieu nai trach nhiemca nhan oi vi ngi lao ong va ph bien ho.


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Notification Provisions

ANY CHANGES / UPDATES / OCCURANCE IN THE FOLLOWING

AREAS WOULD REQUIRE IMMEDIATE NOTIFICATION TO YOUR

RISK MANAGER AND LEGAL DEPARTMENT

Claims & Circumstances

IMPORTANT: The D&O policy is a claims made & notified policy

Written notice must be given AS SOON AS PRACTICABLE of any:

A. CLAIM

B. CIRCUMSTANCES


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NGHA VU KHAI BAO

NGI C BAO HIEM PHAI LAP TC THONG BAO VI BOPHAN QUAN LY RUI RO VA PHAP LY VE BAT KY S THAY OI /OI MI / S CO XAY RA TRONG CAC TRNG HP SAU:

S co phat sinh hoac khieu kien:

QUAN TRONG: n D&O la hp ong thong bao s coThong bao bang van ban phai c thong bao ngay lap tc neu co thetrong trng hp phat sinh:

A. KHIEU KIEN

B. S CO PHAT SINH


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Other Notification Provisions

What is required:

- Description of the claim / circumstance

- Nature of the alleged Wrongful Act / potential damages / potential

claimants

- How did you first become aware of the claim or circumstance


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Thong tin can thiet:

Mo ta s co

ac iem cua Hanh vi sai trai b cao buoc/ton that tiem nang/ nguyenn tiem nang

Ngi c bao hiem sm nhan biet ve s va khieu nai nh the nao

NGHA VU KHAI BAO


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Marshs FINPRO Practice

Marshs FINPRO Practice is dedicated to financial and

professional liability insurance coverages. We have more than

700 colleagues in our practice globally, and FINPRO isrepresented in virtually every major Marsh office globally.


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BO PHAN FINPRO CUA MARSH

Marsh FINPRO la dch vu chuyen sau tap trung ve bao hiem taichnh va trach nhiem nghe nghiep, chung toi co hn 700 chuyengia hoat ong khap toan cau va FINPRO la mot bo phan chnh

trong hau het cac van phong cua Marsh khap the gii.


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Bangkok

Beijing

Mumbai

Hong Kong

Jakarta

Kuala Lumpur

Manila

Melbourne

Osaka

Seoul

Shanghai

Singapore

Sydney

Taipei

Tokyo

Ho Chi Minh City

Our GeographyOur GeographyOur GeographyOur Geography

Updated June 2007

Guam

Karachi New Delhi

Macau

Guangzhou

Chennai

FINPRO ASEAN

SubsidiaryAffiliate

Correspondent


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Our Organisation Chart

CEO, Marsh ASEANAlan Cheah

FINPRO ASEANCollin Yap

FINPRO Asia PacificRay Armstrong

FINPRO SingaporeCollin Yap

FINPRO MalaysiaDevakumaran Painisamy

FINPRO ThailandTheeraya Phongpool

FINPRO IndonesiaDino Ary

FINPRO VietnamGary Leong

Andrew G Paul

Kelly Wong

Felix Liu

Salamah Subri

Michelle Chung

Weslin Wee

Ikhmal Hadi Ibrahim

Lee Mei Li

Meena Thanarattanavichai

FINPRO PhilippinesLarie Concepcin

Mary Ann Geronimo

Suteera Ua-Amporn

Yin Peng Foo

(Regional Placement)

Gunenthiran GunaratnamDuong TN Phuong

Hoang M TuanBui H Tri


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Marsh & McLennan Companies Structure

Marsh Mercer

MMC

Kroll

Revenues exceeding US$11.7Billion

Approximately 62,500 employeesworldwide

400 offices; 100 countries

Risk and Insurance Services HR Consulting Due Diligent


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Worlds 10 Largest Insurance Brokers 2006(ranked by brokerage revenues)

Rank Company Brokerage Revenue2006 (US$)

1 Marsh & McLennan Companies, Inc. 10,474,000,000

2 Aon Corporation 6,709,000,000

3 Willis Group Holdings Ltd. 2,341,000,0004 Arthur J Gallagher & Co. 1,437,800,000

5 Wells Fargo Insurance Services Inc. 1,008,737,000

6 Brown & Brown Inc. 864,662,662

7 Jardine Lloyd Thompson Group P.L.C. 847,042,300

8 BB&T Insurance Services Inc. 842,295,600

9 Hilb Rogal & Hobbs Co. 696,041,000

10 Lockton Cos. L.L.C. 657,161,000

*Complied by Business Insurance magazine Jul, 2007

Marsh & McLennan Companies (MMC) has been ranked as the world's largest insurance

broker for the 36th consecutive year byBusiness Insurance on publication of its annual 2007brokerage report.


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Marsh Vietnam

MARSH VIETNAM LTD

Presented in Vietnam since 1994

30 experienced specialists in two offices:

- Head Office:

Level 10, #8 Nguyen Hue, District 1

HCMC, VietnamTel: 848 822 7456 Fax 848 822 7343

- Hanoi Office:

Unit 301 - NorthStar Building, #4 Da Tuong, Hoan Kiem District

Hanoi, Vietnam

Tel: 844 942 9646 Fax 844 942 9573


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Our Contacts

- Collin CP Yap - FINPRO Practice Learder

[email protected]

- Gary CH Leong - General Director/CEO

[email protected]

- Duong TN Phuong - Deputy General Director [email protected]

- Hoang M Tuan - Specialty Practice Leader

[email protected]

- Bui H Tri - Client Development Executive

[email protected]


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QUESTION & ANSWER

D&O Seminar - Final Eng & Viet - Marsh

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