Compliance environment spurs new insurance product specifically for Chief Compliance Officers
In a vivid sign of the times for Chief Compliance Officers, an insurance broker recently announced it has created an insurance product especially for CCOs.
The Wall Street Journal reported this week that Marsh has created “CCO Preferred,” a product designed for “covering the costs of chief compliance officers who come under investigation by regulators.” The coverage is designed for non-intentional conduct specifically and not designed to protect or cover “intentionally criminal behavior.”
According to the Marsh website, “Chief compliance officers (CCOs) increasingly face personal liability for corporate wrongdoing and regulatory violations as a change of guidelines and a string of federal enforcement actions have transformed the environment in which CCOs operate. Now, regulators are pursuing cases of negligence where the CCO was neither involved in nor aware of the wrongdoing. CCOs are concerned that their personal assets may be at risk if regulators pursue them for unintentional wrongful conduct.”
AML Partners CEO Frank Cummings has worked closely with various CCOs over the last decade, and he said he is not surprised that there is a market for this type of insurance product given the current environment. He noted, too, an additional benefit regarding CCOs taking on Compliance leadership at financial institutions new to them.
“CCOs can experience a lot of stress when taking on a position at a new institution,” Cummings said. “A chief compliance officer starting at a new institution faces the challenge of learning a new place, new people, the current situation, and so on. And they also know that there will be an examination within 12 months. Anything that helps lessen the stress and let a CCO focus in on their primary responsibilities can be a good thing.”
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