[MUNICH, Germany]—Directors and officers at Siemens A.G. are exposed to more personal liability since insurance changes were made, as the company investigated suspicions of corruption by employees at the engineering group.

Siemens and public prosecutors have been investigating, since at least late 2004, suspected corruption by employees at the company that may stretch back to 2002 and could include bribery, the creation of slush funds and other illegal acts.

Munich-based Siemens said it has identified around €420 million in suspicious payments, which may not be related to legitimate business arrangements.

Siemens pointed out in its most recent annual report that as far back as late 2004, bank accounts in Liechtenstein were seized as part of the investigation and an unidentified amount of funds transferred to Siemens after they were released by government authorities. Last November, Anton Winkler, Munich's public prosecutor, launched an investigation into the alleged corruption by raiding Siemens' offices and the homes of some of its employees.

Siemens would not provide details of its insurance coverage that might respond to potential claims arising from the scandal, but its financial records show that changes were made to its directors and officers liability insurance after the problems came to light.

A Dec. 7, 2005 report by Heinrich Pierer, chairman of Siemens' supervisory board, indicated that in October of that year, the company instituted a deductible in its D&O coverage that increased liability for named insureds.

The coverage, which protects "board and committee members and employees of the Siemens organization" for personal liability "in the case of a financial loss associated with employment functions," according to Siemens' annual report, was amended to allow the company to hold members of the managing board liable for losses up to 20% of their fixed salary and members of the supervisory board liable up to the same percentage of the fixed compensation component of their pay.

The change brought Siemens into full compliance with the German Corporate Governance Code, Mr. Pierer pointed out in his report. The code is a voluntary set of compliance recommendations and does not carry the force of law.

A Siemens spokesman would not comment on matters related to the company's coverage.