Directors and officers insurance claims experts–who should be resting comfortably on news of plummeting securities class actions–are instead feeling increased pressure, squeezed by a dizzying array of potentially negative legal trends challenging the future of their business. “There is a total state of confusion,” said Michael Mitrovic, vice president of claims for American International Group and president of AIG Worldwide Financial Services in New York.
Mr. Mitrovic was referring to what he views as some of the negative impacts of the Sarbanes-Oxley Act–the 2002 law that set rules of corporate governance and public company financial disclosure–as well as penalties for executives involved in corporate fraud.
“I have never seen in the history of doing this business so much animosity between the boards and managements. And part of it is occasioned by provisions in Sarbanes-Oxley” requiring insiders and outsiders to report perceived wrongdoing, he noted.
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