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For the First Time in Sri Lanka a Directors and Officers Liability Insurance cover was offered Free of Charge by Hayleys AIG……..
Hayleys AIG Insurance Co. Ltd., Offered a Director’s and Officers Liability Insurance cover for one month free of charge. This special offer was given to all the participated companies at a special Symposium on “ Solutions to overcome the Challenges imposed on the Directors under the New Companies Act”
The Enactment of the New Companies Act in Sri Lanka has brought in mixed reaction among the business community. Especially the introduction of the charter on Directors duties has created lot of uncertainty among the Directors and high-ranking officers. The Symposium organized by Hayleys AIG Insurance Co. Ltd., emphasized on the protection available for Directors in facing these uncertainties. Even though lots of Seminars have been held on the New Companies Act, this Seminar was the First to talk about the solution to the challenges.
Dr. Harsha Cabraal Addressing a packed audience at the Waters Edge on Last Wednesday (30th May) explained the importance of enacting a New Companies Act in Sri Lanka and the importance of having Directors Duties set out in the Act. He set out instances in Sri Lanka and other countries where directors failed to perform their duties effectively and showed the repercussion of those activities to the economy and the interested parties. According to him Directors should be aware of these duties imposed, defenses and indemnity available under the New Companies Act and the importance of keeping an open eye in making decisions. Dr. Cabraal further stated that Directors personal assets and properties could be at danger if they are made liable for violation of certain duties. Also he pointed out the parties, which can bring an action against directors like the company, minority and majority shareholders, creditors, regulators and etc.
Ms. Ayomi Aluwihare-Gunawardane Partner at FJ & G de Saram set out in detail the Sections applicable for Directors under the New Companies Act and the civil and penal liability imposed on Directors under the New Act. Also explained about the Section 218 of the New Companies Act that is on Indemnity and Insurance, and the certain requirements that has to be followed by the companies in obtaining Insurance for Director’s and Officers.
Ms. Uttara Vaid representing American International Group (AIG) explained about the importance of Corporate Governance and emphasized more on the protection available to the Directors in meeting the challenges imposed by the New Companies Act. She also emphasized on the importance of having an index on laws and regulations that imposes liability on Directors. According to Uttara D&O Insurance offers protection against the costs of settling claims for actual or alleged wrongful acts. It provides cover for the Directors and Officers and reimburses the company where it provides indemnity for those directors and officers. While setting out examples from India and rest of the world Uttara explained how Sri Lankan Companies could be affected by jurisdictional laws when they have operations domiciled in other jurisdictions. Also, she talked about the new avenues in which the liabilities could be imposed on directors like web advertising. Also she stress on the point of having proper insurance arrangements in an insurance policy.
The Chief Guest Dr. H .N. Thenuwara, the assistant Governor of Central Bank of Sri Lanka addressing the gathering explained the intention behind bringing the New Act and economic benefits it thrives to achieve.
Mr. Jean-Pierre Assaf the Managing Director of Hayleys AIG making the introductory note said that Hayleys AIG is one of the first Insurance Companies in Sri Lanka to proactively address the Concerns of Directors Liabilities under the New Companies Act. He also talked about the Hayleys AIG’s ability to bring the experiences and financial strength of the AIG group of companies to the Sri Lankan market.
Mr. David Wood the panelist on the seminar said that AIG is one of the World’s biggest International Insurances and Financial services group with a presence in over 130 countries and jurisdictions has been in the Sri Lankan market for over 7 years with the partnership of Hayleys Ltd. Having pioneered in Directors and Officers Liability Insurance in the USA and Europe, AIG is today the preferred underwriter of D&O Insurance among Fortune 500 companies. According to him AIG has handled many claims on D&O he set out some claims examples from similar backgrounds like Sri Lanka and other litigious jurisdictions. Since Sri Lanka has very limited experiences with regard to D&O claims David explained about the instances that may give rise to possible claims under the New Companies Act. According to him AIG’s presence in Sri Lanka offers the Sri Lankan market strong financial strength, a policy that is wider in coverage so that the customers do not have to depend on reinsurance facilities available from an alien jurisdiction.
The Symposium was attended by Company Directors, CEOs, Senior officers, legal officers, and professionals.
Work Environment Day – June 5, 2007 (Greece) – “Energy Efficiency @ Home” – Article in Greek
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Issue 9 | June 2007 