2
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4
Financial Institutions in Focus
http://corner.advisen.com
• White Paper: Community Bank Lending: Practice and Failures, and the Role of Directors and Officers (D&O) Liability Insurance (coming soon)
• Copy of these slides
• Recording of today’s webinar
6
Today’s Panelists
Theresa Gooley, Assistant Vice President,
Financial Services Claims Manager,
OneBeacon Professional Insurance
Deb Forsaith, President, Insurance Strategies
Craig Collins – President, OBPI Financial
Services
7
Today’s Panelists
Craig Collins – President, OBPI Financial Services
Craig Collins has more than 20 years of experience in the
financial institution industry and is responsible for all
financial services underwriting operations at OneBeacon
Professional Insurance. Coming to OBPI from St. Paul
Companies, he spent time in London where he oversaw
the international banking insurance operations in 13
countries.
8
Today’s Panelists
Theresa Gooley, Assistant Vice President, Financial Services
Claims Manager, OneBeacon Professional Insurance
Theresa Gooley brings a diverse background of insurance and
legal expertise to the OBPI Financial Services team. As a former
managing director at Travelers, Theresa oversaw claims and claim
attorneys who dealt with community banks and large financial
institutions. She has managed coverage litigation and settlement
negotiations, including supervising litigation against insureds
under various professional liability policies. Prior to joining the
insurance field, Theresa worked as an attorney for a law firm in
Minneapolis.
9
Today’s Panelists
Deb Forsaith, President, Insurance Strategies
Deb Forsaith is President of Insurance Strategies, Inc., an
independent insurance agency specializing in insuring community
banks in the upper Midwest, and has worked with community
banks for over 25 years. Prior to co-founding Insurance Strategies
in 2001, Deb headed up the Financial Institution Division of Firstar
Insurance Services, a subsidiary of the former Firstar Corporation.
She has a B.A. from Monmouth College, a J.D. from Marquette
University, and holds CPCU and ARM designations.
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Bank Failures
0
20
40
60
80
100
120
140
160
180
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: FDIC
• Between January 1, 2007 and May 15, 2012, the FDIC
authorized suits against 549 individuals representing 63
failed institutions, many of which are community banks.
• 239 thus far have been named as defendants in 29
lawsuits
• Two suits were dismissed after settlement with the
named directors and officers
• The pace of filings is accelerating
• 11 of the 29 suits were filed in the first five months of
2012
11
FDIC Actions
As we saw, bank failures skyrocketed during the past several years.
What happened? Why did community banks change their lending
practices?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
The present round of failures of community banks is
sometimes compared to the savings & loan and agriculture
crises of the late 1980s and early 1990s. How are the events
similar and, perhaps more significantly, how do they differ?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
What does it mean to a director or officer when they receive
a demand letter, and how are they responding?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
The number of new suits filed against community bank
directors and officers by the FDIC has surged in 2012.
What did it take a couple of years for the FDIC to begin to
take action?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
Do you think the pace will continue to increase?
For how long?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
What are some of the common allegations the FDIC is
lodging against community bank directors and officers?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
Some commentators have suggested the FDIC now is
applying a much lower standard of accountability in the suits
now being filed. What was the standard applied in the past,
and how has it changed?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
Aren’t these lower standard allegations overridden by the
business judgment rule?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
Are directors and officers of failed banks subject only to FDIC
actions, or are their other potential sources of liability they
should be concerned about?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
The JOBS Act, recently signed into law, raises the threshold for
public banks to be subject to SEC reporting requirements. Are
community banks taking advantage of this new standard to
remove them from SEC scrutiny?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
The recession was declared over in 2009. Are community
banks still at risk of failure from construction and real estate
loans?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
How have community banks changed their lending practices?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
Should banks consider Side A-only coverage in addition to, or
in place of, traditional A,B,C coverage?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
What are the lessons learned from this event? What advice can you
offer community bank directors and officers to assure there is not a
repeat of this debacle?
Craig Collins –
President, OBPI
Financial Services
Theresa Gooley, Assistant
Vice President, Financial
Services Claims Manager,
OneBeacon Professional
Insurance
Deb Forsaith,
President,
Insurance
Strategies
Dave Bradford- Advisen Ltd.
29
Today’s Panelists
Theresa Gooley, Assistant Vice President,
Financial Services Claims Manager,
OneBeacon Professional Insurance
Deb Forsaith, President, Insurance Strategies
Craig Collins – President, OBPI Financial
Services
30
Upcoming Advisen Webinars:
Real Estate Equals Real Challenges
Date: Thursday, July 12, 2012 at 11:00AM EDT
Securities Litigation Quarter 2 Date: Thursday, July19, 2012 at 11:00AM EDT
Upcoming Webinars:
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To register: https://advisen.omnovia.com/register/47081336590422
Cyber Liability Insights Conference
Wednesday, October 24, 2012* 8AM EDT
To register: http://events.SignUp4.com/Advisen_CyberLiabilityInsights
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