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  • Writer's pictureKirk Hartley

Germany Tries to Change D + O Behavior With Limits on D + O Insurance

The D + O Diary, a blog on D + O liability, includes this post about a new German law that seeks to change behavior of corporate officers and directors by imposing 10% of a loss on the individual officers subject to an annual cap. Here’s the gist of the law as described by the post:

“Among other things, this new Act will impose a new requirement that German Stock Corporations (Aktiengesetz) purchasing D + O insurance for their executives must impose a personal deductible to be borne by the directors in an amount equivalent to at least 10% of the relevant loss, up to an annual cap. Comments accompanying the Act specify that the annual cap must be set at not less than one and one half the annual fixed remuneration of the director.”

The post goes on to cover issues/methods that may come into play if Ds and Os and their companies seek to skirt the new law. In short, an interesting article about an interesting new law, but perhaps the ultimate point is that the article proves that most any government has a heck of a time actually regulating business because lawyers and business persons often can find or create a way to skirt many laws, for better or for worse.

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