financial institutions in focus - advisenwhat happened? why did community banks change their lending...

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Financial Institutions in Focus

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About Advisen:

Advisen generates, integrates, analyzes and communicates unbiased,

real-time insights for the global community of commercial insurance

professionals. As a single source solution, Advisen helps the

industry to more productively drive mission-critical decisions about

pricing, loss experience, underwriting, marketing, transacting or

purchasing commercial insurance.

Please locate us on: www.advisen.com

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Many Thanks to our Sponsor!

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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

Today’s Moderator

Dave Bradford- President, Research &

Editorial Group, Advisen Ltd.

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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

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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.

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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.

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Today’s Panelists


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

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60

80

100

120

140

160

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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

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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





Insurance

Deb Forsaith,

President,

Insurance

Strategies


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





Insurance

Deb Forsaith,

President,

Insurance

Strategies


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





Insurance

Deb Forsaith,

President,

Insurance

Strategies


Do you think the pace will continue to increase?

For how long?

Craig Collins –

President, OBPI

Financial Services





Insurance

Deb Forsaith,

President,

Insurance

Strategies


What are some of the common allegations the FDIC is

lodging against community bank directors and officers?

Craig Collins –

President, OBPI

Financial Services





Insurance

Deb Forsaith,

President,

Insurance

Strategies


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





Insurance

Deb Forsaith,

President,

Insurance

Strategies


Aren’t these lower standard allegations overridden by the

business judgment rule?

Craig Collins –

President, OBPI

Financial Services





Insurance

Deb Forsaith,

President,

Insurance

Strategies


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





Insurance

Deb Forsaith,

President,

Insurance

Strategies


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





Insurance

Deb Forsaith,

President,

Insurance

Strategies


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





Insurance

Deb Forsaith,

President,

Insurance

Strategies


How have community banks changed their lending practices?

Craig Collins –

President, OBPI

Financial Services





Insurance

Deb Forsaith,

President,

Insurance

Strategies


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





Insurance

Deb Forsaith,

President,

Insurance

Strategies


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





Insurance

Deb Forsaith,

President,

Insurance

Strategies


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White Paper: Available on Advisen’s Corner Store

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Many Thanks to our Sponsor!

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Today’s Panelists

Theresa Gooley, Assistant Vice President,

Financial Services Claims Manager,

OneBeacon Professional Insurance


Craig Collins – President, OBPI Financial

Services

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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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Upcoming Advisen Conferences: RIMS Benchmark Book… “The Live Event” Thursday, July 26, 2012* 10AM EDT

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

http://events.signup4.com/Advisen_CyberLiabilityInsights

http://events.signup4.com/Advisen_CyberLiabilityInsights

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