Actuarial Outpost
Go Back   Actuarial Outpost > Actuarial Discussion Forum > Property - Casualty / General Insurance
FlashChat Actuarial Discussion Preliminary Exams CAS/SOA Exams Cyberchat Around the World Suggestions

DW Simpson Global Actuarial & Analytics Recruitment
Download our 2017 Actuarial Salary Survey
now with state-by-state salary information!

Thread Tools Search this Thread Display Modes
Old 07-09-2018, 03:57 PM
TDH TDH is offline
CAS Non-Actuary
Join Date: Dec 2016
Posts: 48
Default Financial Institution - Fidelity insurance

Does anyone have any experience with the following line of business?

My company are planning to start writing it, and I'd like to do some reading on how it's priced, and key factors to lookout for. As this is specialist insurance, does anyone have any reading?
Reply With Quote
Old 07-10-2018, 07:43 AM
pragmatist pragmatist is offline
CAS Non-Actuary
Join Date: Jan 2014
Posts: 173

One key factor to consider is the difficulty to recover --in court proceedings-- from the dishonest/fraudulent entity, be it through subrogation (thus, to the detriment of the insurer) or where the claim is denied coverage (to the detriment of the insured).

Based on the link you shared, I gather that your target market encompasses one or more jurisdictions in the U.S. At the outset, I should point out that many courts in the U.S. are incredibly corrupt. From personal experience I can attest that several judges distort the evidence and suppress the law so as to force an aberrant outcome.

Moreover, there is a multitude of procedural impediments to obtain an award (judgment) of recovery against the dishonest defendant. After all, a dishonest defendant will do everything possible to impede discovery because the evidence obtained in civil court might end up being used against him in criminal court as well. In particular, dishonesty is a state of mind that the culprit defendant will hardly ever admit, whence the plaintiff (be it the insured or the insurer) has a heavy burden of proof.

You might want to read some cases to see how courts decide or "review" cases related to financial institution bond. I've only read Renasant Bank v. St. Paul Mercury Ins. Co, 882 F.3d 203 (2018). The 2nd-to-last paragraph reads: "The Employee denied [fraudulent] intent". Although in this matter the employee might certainly be innocent, it illustrates what I mentioned in my previous paragraph: a defendant (whether or not he is in the wrong) will deny wrongful intent. When I sued my former employer, he at all times denied his unlawful state of mind even though he has incurred several important contradictions.

That 2nd-to-last paragraph also reads "Renasant Bank also acknowledged that, despite issuing a number of third-party subpoenas, it had no documents showing that the Employee had the requisite intent.". The appellate court did not elaborate on its inconclusive remark, but it would be important to know: (1) Were any of the subpoenas quashed? and (2) did the trial court side with the non-parties in the motion(s) to show cause? In real life, a complicit non-party has a strong incentive to conceal important records because their disclosure might land that accomplice in civil and/or criminal court. I've been having that problem with the subpoenas I issued to the University of Michigan in the two lawsuits I filed in 2015.

For these reasons, as a financial institution I would purchase the only the statutory minimum of this type of insurance (lest I end up battling the insurer on top of the culprit, the court, AND my incompetent attorney), and as an insurer I would rather avoid that line of business due to the hardship of proving a defendant's state of mind.

Last edited by pragmatist; 07-10-2018 at 09:04 AM..
Reply With Quote

Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

All times are GMT -4. The time now is 08:26 PM.

Powered by vBulletin®
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
*PLEASE NOTE: Posts are not checked for accuracy, and do not
represent the views of the Actuarial Outpost or its sponsors.
Page generated in 0.27184 seconds with 11 queries