If Merrill Lynch didn't know the value of the assets on their books and had to take an $8 billion-plus write-down for subprime mortgage-related securities, how can directors and officers insurance underwriters possibly know if financial disclosures are appropriate?
Jack Zwingli, chief executive officer of Los Angeles-based Audit Integrity, a forensic accounting firm, asked the question during the Professional Liability Underwriting Society International conference last month, noting that issues facing D&O insurers thanks to the subprime mortgage crisis are just a small part of a larger challenge–the need to get their arms around the degree of transparency and the quality of disclosure at financial institutions.
"Subprime is the topic du jour and will last a long time in terms of lawsuits and continuing impact. But from a disclosure standpoint, this is really an issue of fair-value accounting," Mr. Zwingli said, referring to accounting rule changes related to the valuation of assets that went into effect on Nov. 15.
Recommended For You
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.