Among the facts risk managers with multinational operationsshould know when dealing with global D&O exposures, accordingto Willis:

o In common-law countries, nonadmitted policies are generallyallowed. It doesn't matter where the policy is issued.

o In civil-law countries, nonadmitted coverage is generallyprohibited. It may also be prohibited for a carrier to pay a claimlocally.

How do you tell the difference?

Willis' Ann Longmore gives the following rule of thumb: If theBritish flag flew overhead at some point in the country's history,it's most likely a common-law country, while countries that were“conquered by Napoleon or settled by people conquered by Napoleonare more likely to be civil-law countries.”

o Common-law countries include the United Kingdom, the UnitedStates, Australia, Hong Kong and Canada.

o Civil-law countries include France, a lot of Europe, and muchof Africa and Asia.

o In China, there is a strong policy prohibiting nonadmittedcoverage.

o In France, nonadmitted coverage is prohibited except if acorporation with operations throughout Europe has a “Euro-policy”issued in the United Kingdom or the Netherlands, for example.

o In Canada, nonadmitted is allowed, but taxes have to paid toCanadian tax authorities based on insurance allocation toCanada.