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Chartis launches entity cover for SEC investigations


NEW YORK—Chartis Inc. has introduced a directors and officers liability policy that offers coverage to companies for expenses related to investigations by enforcement authorities, such as the U.S. Securities and Exchange Commission.

The policy, called Investigation Edge, complements the AIG unit's coverage for executives under investigation, which was launched last year.

The entity coverage, launched Wednesday, provides coverage, including the cost of internal investigations, to companies rather than their executives.

“This is about filling a hole in the industry,” said Robert Yellen, chief underwriting officer in executive liability at Chartis in New York.

It remains unclear to what extent standard D&O insurance covers SEC investigations.

Mr. Yellen declined comment on how Chartis plans to price the new coverage but said it would use proprietary models built from publicly available information and experience.

Limits of up to $25 million are available, a Chartis spokeswoman said.

“Our brokers and insureds have asked for an insurance solution to address the growing concerns about the cost of SEC and related investigations,” said Michael Smith, president of executive liability, in a statement.

“Regardless of the effort to avoid wrongdoing, when issues arise, the costs from the ensuing government investigation can be staggering, irrespective of the outcome. We designed Investigation Edge to specifically address this growing exposure,” Mr. Smith said.

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